One of South Africa’s greatest challenges is job creation, but starting your own business is capital intensive and risky and while investing in a franchise is less risky, it’s capital intensive. To help combat unemployment, Taste Holdings, in collaboration with Nedbank and Brimstone Investment Corporate, have formed a tripartite aimed at opening up franchise opportunities for individuals previously unable to break into the industry.
Opening doors for better futures
For many would-be franchisees, barriers to franchising remain high: They may have impaired credit records that prevent them from receiving the finance they need to buy a franchise; They may be young and therefore lack the security of unencumbered assets; They may not have amassed the required 50% cash contribution required to own a franchise; Or they simply don’t have the necessary skills and business knowledge required to run a business.
The solution to this problem is a new initiative by Taste Holdings, Nedbank and Brimstone called “Sisonke,” meaning ‘we are together’ in Zulu. The three companies have agreed to collectively provide competitive funding for 50 new The Fish & Chip Co franchisees who would ordinarily not qualify for a franchise because of the criteria listed above.
Making it work, together
Sisonke works by distributing the risk of funding between the three companies, lowers prospective franchisees’ owner-contribution to be 20% as opposed to 50% or more, offers a five year repayment period at prevailing prime interest rates, offering a dedicated franchise business manager to assist the new franchisee, and offering a free two-day accredited financial management course.
This platform opens up franchising opportunities to a much broader pool of individuals, but existing selection criteria such as personal attributes and values aligning with the brand will remain intact.
Why The Fish & Chip Co?
Carlo Gonzaga, CEO of Taste Holdings, explains the reasons for engaging Brimstone and Nedbank in forming this initiative: “We believe that franchising is CSI in action. Franchising allows for the transfer of skills, it creates sustainable jobs, and it enables entrepreneurs.
We chose The Fish & Chip Co because it’s a very successful concept that is easy to operate. There are currently over 300 outlets nationwide (and we’re still developing in KZN and the Western Cape), there’s still plenty of room for growth, and in 2012 alone the brand created 1000 new jobs. If we include beneficiaries of this kind of growth, the brand has had a positive impact on 10 000 dependents. We need this kind of impact in South Africa,” he explains.
“The Fish & Chip Co has one of the lowest setup costs around, costingR453 000 excluding Vat and working capital, it has some of the quickest return on investment at around 24 months, the simplicity of the operations, menu, and staff requirements make it a good starting point for inexperienced franchisees, it offers unbelievable value for money to consumers – which is proven through franchise growth – it’s a market leader in its segment, and it’s part of a larger holding company that can offer franchisees a lot of support and resources.”
The programme is set to roll out over the next six to twelve months, with R30 million being made available for between 50 and 100 Fish & Chip Co franchises.