Franchising is more than just acquiring a contract, opening the doors and ‘Bob’s your uncle’ – you are now rich and successful. 

It is important to fully understand what it is, its implications and how to make a success of this arm of business whose failure rate is only 10% compared to independent businesses that have a failure rate of over 90%.

Following are 5 tips from Tony da Fonseca the chairman of the Franchise Association of South Africa (FASA);

Understand the concept of franchising

You must fully understand what the implications are of signing a franchise contract that contractually locks you in for a fixed period of time (anywhere from 3 to 10 years) or why you have to pay an upfront fee or ongoing management service fees. If you have any doubts on any of these issues, you need to go back to square one and really understand the concept of franchising.

Choose a franchise business that you’ll enjoy


Don’t let the idea of being your own boss cloud your judgement or be swept away by the allure of a well-known brand. 

Choose a franchise concept that you understand, are familiar with or even have some expertise in.  

Do your homework and choose well

Check the sustainability of the financial model – those with innovative products and services, protected technology and new growing markets make ideal businesses. Look at the competition as well as most new and successful concepts will soon have copy-cat businesses which can dilute profitability.

Find the right ethical fit

A franchise relationship between franchisor and franchisee is much like a marriage – you are stuck with each other for the duration of the agreement and it is in both your interests that there is trust and transparency and a genuine compatibility.


Franchising still the best investment option

Despite the on-going recession that is impacting heavily on small businesses, the franchise sector continues to be resilient and franchising globally has fared far better than independently owned businesses – largely due to the strong business format and support system inherent in franchising.