Is franchising really worth the investment?

We’ve all encountered franchising, even if we haven’t realised it. Today, the major focus for nearly all businesses is its identity online and how it exists in the digital sphere.

To be able to assess franchising, however, especially in terms of the digital age, we should know what it is. notes:

“Franchising is a network of interdependent business relationships that allows a number of people to share:

  • A brand identification

  • A successful method of doing business

  • A proven marketing and distribution system”

Obvious examples of this are usually places like fast food outlets. The actual description is that it is an arrangement, says the Business Dictionary:

“… where one party (the franchiser) grants another party (the franchisee) the right to use its trademark or trade-name as well as certain business systems and processes, to produce and market a good or service according to certain specifications.”

In the case of food outlets, it would be the logo, name, brand, etc., of, say, KFC or Chesanyama.

“The franchisee usually pays a one-time franchise fee plus a percentage of sales revenue as royalty, and gains (1) immediate name recognition, (2) tried and tested products, (3) standard building design and décor, (4) detailed techniques in running and promoting the business, (5) training of employees, and (6) ongoing help in promoting and upgrading of the products.”

This means deals are made between the franchise’s senior people, such as Praxia Nathanael, and the person wanting to use the various techniques, resources, etc. of the business. As a franchisee you benefit by being linked to an established brand, with access to its resources; as the franchise itself you get more visibility, more customers, more sales.

But franchises need not only be, say, another shop or outlet. They can also be digital spaces. For example, if you’re a franchise, how do you manage your digital presence – your, say, website – if you have franchisees.

As MSA Worldwide notes, in an article about the internet and franchising:

“There are … a host of issues that must be addressed, including whether a franchisor’s existing agreements with its franchisees allow them to enter into e-commerce and, once established, how the website will benefit not only the franchisor but its franchisees.”

The internet has been a great equaliser in terms of businesses, and this is perhaps its most important quality. Franchises must keep this in mind when managing their digital presence, before even considering the various policies in regard to what franchisees can and should do with regard to an online presence.

The Entrepreneur’s Mark Siebert writes:

“Two decades ago, if you wanted to compete with “the big boys,” you would need to advertise to get franchise sales leads… That kind of… commitment was simply not economically feasible for most startup franchisors.

Today, while the new franchisor has the same operational and legal costs to get into the marketplace, a college kid with a lemonade stand and a credit card can create a first-rate franchise website over a weekend, run pay-per-click ads on the front page of Google and be talking to prospects by Monday.”

The Internet is one new, major aspect to how businesses should consider themselves – and this will then carry over into their considerations for franchising. Some have made the argument that with the Internet, it’s probably better to consider partnership as opposed to franchising.

“There will be more networking on the Web instead of franchising,  [Vincent Thompson, principal at Middleshift] predicted. ‘In earlier years, Internet franchising may have made more sense, but no longer. The Internet has changed drastically since then. Business[es] online need much more than [what] is available through a franchise,’ he added.”

There is therefore plenty to consider when it comes to franchising, because there is a lot to consider with regard to business and its presence itself.

(Image credit: Wikipedia)

Finding the perfect location for your start-up

When you start a business, don’t underestimate the importance of finding the right place to launch it from. From your expenses to your image, the location of your business is important. Especially when just starting out.

Do you even need an office?

The very first question you need to ask yourself is whether you even need an office. Can you not get away with working from home? If you don’t have many employees and don’t expect customers constantly dropping by, you might not even have to worry about zoning laws. If you were already looking for houses for sale in Centurion, for instance, then maybe you’re better off making that your place of work as well.

Virtual offices

Related to the home office, is the virtual office. If there is more than one of you, you don’t necessarily all have to work out of one home. You can each perform your role and stay in contact through video conferencing. Virtual offices are gaining popularity among businesses that want to work from home, but also want to keep a ‘virtual address’ for representation and for marketing purposes.

Something to keep in mind though: If you want to foster teamwork and the exchange of ideas among employees, then having everyone working in the same space is always best. This is why big companies like Yahoo are getting their employees to return to the office.

Proximity to funding

If you need funding from venture capitalists, you’re better off staying near to where they are likely to be. This is because if they’re putting a lot of money into a start-up, they’ll generally want to remain involved with the project, which is easier to do if you’re in the same city. So you might want to move to Johannesburg or another city that has the cash flow to make your dreams come true. At least until your start-up is a bit more of a grown up.

The bottom line

Ultimately, the best place to launch your start-up from is a location that makes sense for your particular business. Take into account your industry, audience, budget, and market. For instance, you might need to be in the same area as your target market. And will you need to rely on foot traffic? Perhaps no one will care whether you work out of a broken-down warehouse, but perhaps you are concerned about the image you give your associates and clients.

Whether you’re a start-up or a seasoned company, finding the perfect location means looking at your unique needs.








Have you tried mirror trading?

Like many things in life, some people get investing right, while others don’t – no matter how hard they try. They might have a win now and again, but mostly they exit too early or don’t pull the plug on losers in time. Nerves and fear get in the way very quickly where money is involved!

Should you find yourself in the latter group, and you’re fed up with trying to make the right call at the right time, Forex trading might be the right strategy for you. Haven’t tried it yet? Here’s why thousands of other investors have and swear by it:

  • You can focus on picking from a few currency combinations rather than thousands of stock options.
  • You don’t need a massive capital investment to get started.
  • Forex trades 24 hours a day, making it easy for anyone anywhere in the world to trade any time of the day.

The downside to Forex trading is that it can be very risky, as currencies tend to be volatile. They do, after all, react to any number of changes, from political situations to basic supply-demand economics. It’s important to still trade with caution and to have a plan in place.

Your strategy

Here is where Forex trading gets even simpler and less anxiety-inducing than other investment methods. Mirror trading is a Forex trading strategy that has become very popular since the early 2000s. It’s when smaller investors, like yourself, mirror the investing habits of leaders in the market, i.e. successful investors.

Mirror trading platforms or companies hold records of the trading behaviour of leaders, allowing other investors the opportunity to analyse their habits and follow the leaders with similar investment goals as themselves.

Mirror trading does not absolve you from any responsibility however. Before you start investing your hard-earned cash, heed the following advice:

Become familiar with forex trading. Understand what it is, familiarise yourself with the jargon, and learn how to analyses market trends and results derived from investment strategies.

Practice patience. Don’t jump into mirror trading. Take your time getting to know the big market players and follow with care.

Choose a reputable mirror trading company. Again, conduct thorough research – look into their past results; both successes and failures. Also check that the company is accredited and not just a front for some elaborate money scam.

Mirror trading is not set-and-forget, so it’s vital to continuously keep an eye on your investment. When the leader you’re following starts to invest in a way that does not correlate with your needs, start looking around for an alternative. It’s your money, so look after it.

Can processes save your business?

A lack of structure in your business can be its downfall. Without the correct systems and processes in place, your projects can fall flat, valuable resources are wasted, and efficiency is compromised.

There are various structures that your operations depend on. Some are important, like production or defining who does what and when. Some don’t seem as big an issue, like lunch schedules. But it’s a valuable principle to have everything working as effectively as possible.

What are some ways you can improve the processes in your business?

Get a cost-time budget – A good place to start is doing a basic excel spreadsheet to compare the cost of time to budget. You’ll be able to see where you are making your mistakes and where there is room for improvement. In other words, you’ll get a clear of idea of where you’ll start saving time and money.

Project management skills – One of the biggest and most important changes to make is improving project management skills. Even if you don’t think you need a full-time project manager on board, by equipping your employees with the ability to practice effective project management, you will see scope creep reduced, deadlines adhered to, and projects kept on track, every step of the way.

HR – Even if your business isn’t big enough to warrant an HR department, you will still benefit from bringing in an HR consultant from time to time. It’s important that everyone’s roles and responsibilities are clearly defined, as well as the chains of command. Often you will find that in a smaller businesses, with only a few employees, everyone will do a bit of everything. This works less and less as your business grows. When people aren’t clear on who does what and when, things will begin to fall through the cracks.

Implement and regulate processes – Once you have the correct processes in place, make sure they are consistently adhered to. It doesn’t help if correct processes are developed, but no one gives it much thought beyond the initial phase. It may take some time for your employees to get used to processes, especially if there wasn’t much structure before that. To counter this, make sure everyone understands why the processes are in place, and if necessary, assign someone to make sure that they are being implemented.

By setting out the correct processes, making sure everyone knows what’s expected of them, and ensuring consistent compliance, your business should run just a bit more smoothly. One last word of advice, however, is that as important as it is to have systems in place, don’t go to the extreme of stifling your employees in too much red-tape. It’s about finding that right balance in the system between stability and freedom, order and flexibility.

Dealing with strikes at your business

No one in South Africa is insensitive to the matter of striking. While it is a hotly contested issue, one thing remains clear. As a business, if you’re facing the possibility of a strike, there is a right way and a wrong way to go about it.

Protected vs unprotected strikes

There is a tendency to refer to legal and illegal strikes in South Africa. However, this isn’t technically correct. While a strike can be unlawful, it does not constitute criminal activity. The terminology to use is protected and unprotected striking.

Protected strikes happen when employees follow procedures laid out in the Labour Relations Act. Employees taking part in protected strikes can’t be dismissed or sued, and are not considered to be in breach of their employee contracts.

Unprotected strikes, on the other hand, are situations where employees have not followed the procedures of the Labour Relations Act. They are therefore not protected from dismissal. Further, a court can grant an interdict against an unprotected strike, and order the payment of compensation for any loss caused by the strike.

However, fairness and reason needs to prevail, so be sure to take the circumstances into account before you do anything drastic.

When is a strike protected?

The Labour Relations Act regulates strike action Section 67 describes a “protected strike” as a strike that complies with the following provisions:

  • The dispute has been referred to a council or the Commission for Conciliation, Mediation and Arbitration;
  • a certificate that a dispute remains unresolved must have been issued;
  • 30 days must have elapsed since the referral;
  • and a written notice of a strike must have been given to the employer 48 hours prior to it taking place.

Employees’ responsibilities in a protected strike

As said, during a protected strike employees cannot be dismissed nor have civil legal proceedings brought against them. However, you can fairly dismiss a worker for misconduct or for operational needs. Further, as an employer you do not have to pay strikers, unless they ask that payment in kind (such as for accommodation, food, basic amenities) be continued. Once a strike has ended, you can recover the monetary value of payment in kind through civil proceedings in the Labour Court.

Ensuring a peaceful strike

A strike doesn’t have to be a disaster. One of the most important things in handling a strike is ensuring that it remains peaceful. There are a few acceptable practices to achieve this end:

  • When it becomes clear that there’s going to a strike, inform the local police about the situation.
  • If the strike action is minor, there probably won’t be permanent police supervision. However, your security personnel should still monitor the demonstration closely and request police assistance if necessary.
  • Corporate management or security personnel can videotape striking action for the purpose of identifying any violent or unlawful act by individuals or groups.
  • Advise employees not involved in the strike to avoid openly commiserating, interfering, agitating, or in any way becoming involved.
  • Those in security jobs must be made aware of the actions they must avoid. As well as advised on how they can react to certain circumstances, within the law and the parameters your business authorises.

You can’t control how a strike is going to go. But you can take steps to keep the peace, remain on the side of the law, and minimise the total damage. Doing this, you’ll hopefully be able to see a strike as an instance of constructive conflict, whereby your business as a whole comes out the other side stronger and more united than ever.