The Times:
In tough economic times, franchises are a relatively safe way of doing business.
This is evident in the 2008 Standard Bank Franchise Factor survey, which showed that only about 3 percent of franchises fail, whereas the percentage of failed start-up businesses is much higher.
The survey showed that, between 2006 and 2008, the contribution to GDP by the franchise sector rose to 12.57 percent from 12 percent and the sector created 3600 new businesses.
The sector that has the most franchised businesses is retailing, followed by restaurants, building, office and home services, fast food, and automotive.
Bendeta Gordon, director of Franchize Directions, which conducted the research, said franchising is “a sustainable mechanismâ€.
Franchising created 70000 new jobs between 2006 and 2008.
The research also showed that turnover in the sector increased 37 percent over the two years to R188.2- billion.
Closures in the franchise system were relatively few compared to the number of liquidations of companies.
The sector receives little support from the government but it does receive support from banks, which consider it less risky than other forms of enterprise.
Photo: Sydney Seshibedi.