Franchising And The Great Resignation

An unprecedented wave of mass resignations saw more than 47 million North Americans walk off their jobs in 2021, according to the US Bureau of Labor Statistics. The trend isn’t gaining quite the same momentum in South Africa – which is no surprise, given our 35 per cent unemployment rate, and with 65 per cent of youth out of work.

Nevertheless, in 2020, local staff turnover rose to 18 per cent from an average of 10 per cent – though this was due more to retrenchments and job losses than resignations. It stabilised to 10 per cent again in 2021 – but nearly 40 per cent of those were due to resignations, marking a turn in the tide.

That said, those resignations are largely in highly skilled or specialised positions, with the average South African unable to simply walk away from a job in a market with limited opportunities. Many who have left their corporate jobs to “go it alone” have turned to franchising as an option – entrepreneurship with a kind of safety net – and this is good news for the economy, as they will create employment opportunities.

Fostering entrepreneurs

Franchising development consultant Eric Parker says a major problem in the local labour market is that there are too many job seekers and not enough job creators. “We don’t encourage or support entrepreneurship enough,” he ventures, adding: “Entrepreneurs also aren’t taught; they’re born.”

Hans van Loggerenberg, franchisee at Cash Converters Woodmead, bought into the concept after exiting the corporate world. “Pre-Covid, and then, through the course of the pandemic, the economic climate was shifting significantly,” he recalls. “After reviewing all my options – including staying in the corporate world, starting my own business, or buying into the safety net of a franchise ‘recipe’ – I concluded that the systems, support and structure offered by franchising made it a no-brainer investment.”

Cash Converters group marketing manager Nicole Thomson says many new additions to the brand’s network in the last 18 months are mid- or senior-career professionals. “They’ve looked at the landscape and decided they cannot afford or don’t want to retire at 65 – and that they want a business their children can walk into.”

Do your homework

Parker says that his consultancy, Franchise Plus, has seen an increase in enquiries from “more qualified” people since COVID-19 struck. This indicates that mature professionals or those with years of practical business and corporate experience are turning their attention to franchising as an alternative revenue stream.

He advises anyone exploring this option to do their homework. “There are plenty of franchise opportunities out there, but not all of them are worth your investment. Pick a brand that’s up and coming and has all their ducks in a row, so you can get in on the ground floor, have your pick of locations and get a good start. Since you’re likely putting your life savings at risk, get disclosure documents, visit other franchises and talk to franchisees about their experience – and take your time before committing.”

Thomson adds: “We are starting to see things calming down in our network. There has definitely been uneasiness with the broader economy; load shedding has not helped confidence in the country, and there was a huge amount of talk about emigrating. In the last two or three months, though, our trade has picked up and overall figures are up 30–40 per cent year-on-year, so there is a compelling reason to buy into Cash Converters.”