3 franchising trends to watch in 2019

30 January 2019 | Web Article Number: ME201913359

Food & Beverage
ICT In Industry
SMME Development & Support
3 franchising trends to watch in 2019
Morne Cronje, Head of Franchising, FNB Business

A recent survey conducted by the Franchise Association of South Africa (FASA) revealed that the franchising industry has grown from contributing 13,3% to the South African Gross Domestic Product (GDP) in 2017 to its current figure of 15,7% despite the tough economic climate and its impact on franchises.

Morne Cronje, Head of Franchising at FNB Business, said franchising is a tested business model that should be considered as a treasure trove in creating jobs and social impact for people in South Africa, amongst other things.

The recent FNB Franchise Leadership Summit unpacked key trends to look out for in 2019:

  • Convergence of offline and online businesses

Online businesses are moving into the offline market while offline businesses into the online world.

Speaking at the summit, Andy Higgins, founder of bidorbuy.co.za said it is not about online or offline, but a blurring of the lines. Three typical scenarios are: consumers go into a store to get advice and feel the product and make an online order; or they do research online and make the purchase in store; or a consumer does online research, orders it online and then makes an arrangement to pick it up in person.

Simply put, franchise owners need to incorporate all these channels to reach their customers.

  • More franchises using social media

Cronje said it is no longer a question of whether a business should be on social media or not, it is now more about going where your customers are and meeting their needs and expectations. Social media is a good marketing tool for story-telling and building the persona of the business in an age of technology, thereby promoting the human interaction element.

He gave the example, RocoMamas which he said had grown their brand using social media.

  • Social franchising

More businesses are now focusing on their social impact and for some it is their reason for existence.

Cronje said that for these businesses, social franchising offers a mechanism to deliver impact at scale within a framework of operational standards prescribed by a social franchise business model.

“Social franchising is much needed in South Africa and it can promote the delivery of impactful services from education to healthcare, amongst other sectors,” he said.

“South Africa is going through a tough economic period and consumers are feeling the pinch, thus cutting back on spending. However, franchising continues to show growth in this testing environment and we expect it to grow on the same trajectory in 2019 and beyond.”

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