Estimates by the International Finance Corporation (IFC) indicate that small and medium enterprises (SMEs) in South Africa contribute just over a third of the nation’s gross domestic product (GDP) and provide employment for 50–60 per cent of all workers. Considering our country’s nigh-on stagnant economic growth and burgeoning unemployment problem, these figures are clear indicators of the essential role of SMEs in sustaining and improving the lives of millions. Despite this, the IFC reports that, in light of the number of SMEs and the GDP per capita, the country’s early-stage entrepreneurship rate is a third of what it should be. To put it simply: South Africa needs more entrepreneurs and small business owners. And these entrepreneurs need support.

The franchising model serves two key purposes: providing a means for franchisors to expand their business empires and a structured operating environment and recognisable brand within which franchisees can ideally thrive. It’s a model that has thrived in South Africa, employing almost half a million people and contributing 15 per cent of GDP, according to the Franchising Association of South Africa (FASA). FASA kicks off this issue of Franchising, digging a little further into that economic contribution, exploring how new franchise concepts are introduced to market and looking at how franchisors see the future.

We also look at the sector’s crucial employment contribution, where SMEs fit into a broader snapshot of the economy, dispute resolution in franchising, successful liquor franchises and courier services filling the void left by the South African Post Office’s decline. We hope this magazine contributes in some way towards the growth of South Africa’s crucial SME sector.

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Project Manager
Gavin Payne
Cell: +27 740 319 774
E-mail: gavinp@picasso.co.za