Franchising might be a solution for your business (Part 1)

__A powerful model to consider.

There’s a very popular television show for entrepreneurs in the US called “The Profit” in which a billionaire entrepreneur called Mark Lemonis goes around the country investing in struggling small businesses, usually with a great product, but who don’t yet have the processes (or capital) needed to be successful.

It’s one of many such shows that will be aired on Kwesé TV, as we hold the exclusive rights to broadcast this show in Africa. Kwesé TV will have a 24-hour channel dedicated to entrepreneurs called Kwesé Inc.

Mark Lemonis argues that three things are necessary for a business to be successful: People, Process and Product. I agree with him completely, and have written here recently about my experiences with some of these issues.

This brings me to what I want to talk about in this short series:

THE FRANCHISE BUSINESS MODEL

__This is one of the most powerful business models ever devised and it creates literally millions of jobs around the world.

# Franchising significantly reduces the risks associated with starting and running a business successfully.

# As a “franchisee” you don’t have to spend time trying to develop a product or service yourself, but you take a proven product or service which people already want.

# A good franchise normally comes with well-established processes, and training and support done by highly-skilled professionals. This helps take out the risk associated with creating and managing your own processes.

Having passion and being prepared to work is simply not enough, you have to know what you’re doing. A franchise helps you learn at the feet of experienced entrepreneurs who have done it before.

I’ve experienced both sides of franchising:

# Franchisee: This is when you operate a business as a franchise from someone else. For instance, I’ve operated a Coca-Cola franchise for many years. It’s a beautiful business: I don’t have to think about the product or do research into what customers want. Coca-Cola takes care of everything! All I have to do is manage my people and the cash register!

# Franchisor: I’ve learnt more than a thing or two from the masters like Coke and McDonalds, and I’ve also used the Franchise Model to expand my own businesses:

When we set up Mascom Wireless in Botswana, I wanted to get shops up and running quickly. I wanted them in the cities’ best locations, so I went round the cities and literally chose the sites myself. These were usually occupied by businesses doing different things. I would approach the current owners and tell them they could make more money in a new industry called mobile phones… This was Franchising!

We would then strip out their stores and re-brand them. Their people were trained by us and wore the same uniforms as our own staff.

This meant I didn’t need the headache of operating so many stores, and I shared the entrepreneurial burden with others.

I’ve used this model time and time again to scale quickly, reduce capital requirements, and also to use the entrepreneurial zeal that staff sometimes cannot provide.

Growing your business by franchising is also a way of reducing the capital required to scale your business. In fact, if you really understand franchising you will realize it’s another way to raise capital to expand your business.

Ray Kroc who grew McDonald’s into the most successful franchise in the world, said something interesting: “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it…”

Do you think he’s right? What are some other requirements we’ve discussed?

To be continued. . .

 

33 thoughts on “Franchising might be a solution for your business (Part 1)

  1. Strive Masiyiwa Post author

    Afterthought 1. During the Global Business Leadership Summit at the Vatican last year, I urged some of the largest companies in the world to help spur greater entrepreneurship in the countries where they operate, so as to help create jobs. One of the ideas I had was franchising.

    Reply
    • Bongani

      Thank you for these messages you have posted. I wish I could deeply express how a I know that franchising is a God given concept to help reduce unemployment and increase or spurn the rate at which entrepreneurship is created in our communities.

      One day it came to me that another way to reduce the number of unemployed people was to incorporate this type of concept in order to empower people to curb poverty as it is one of the most strategic and proven concepts alive.

      Hopefully, I will get to do this myself and help other people using this model to create employment.

      Regards,
      Bongani ( South Africa)

      Reply
  2. Strive Masiyiwa Post author

    Afterthought 2. Here’s a new phrase from me: “Knowledge-up” on the subject of franchising. Go on Google and Wikipedia. Find some books, magazines and articles. Look up associations and trade bodies on franchising, particularly in places like South Africa and the US.

    Reply
  3. Strive Masiyiwa Post author

    Afterthought 3. Can you name some franchise businesses that currently operate in your town or big cities? Go on; surprise me! No wild guesses. Do some research. And I won’t give prizes, because your research is a greater prize for you!

    Reply
  4. Strive Masiyiwa Post author

    Afterthought,
    If you are working in the “African Diaspora” in places like the US, EU, and even the Middle East, and you have been thinking about starting a business back home, a franchise might be a solution for you. SA also has a good franchise industry.
    It is however important to do proper research and Due Diligence because there are some crooks in this business (like a lot of other things on this earth); so be careful.

    Reply
  5. Strive Masiyiwa Post author

    Afterthought:
    Whilst retail industry like fast food is the most popular for franchise, the truth is you can get a franchise for virtually anything. In choosing a franchise start with what you are skilled at, and then look for a franchise in that industry.
    Did you know that the Econet Green Kiosk is a form of franchise? Many shops that sell cell phone products are actually franchises even though they carry the brand of the Mobile company.

    Reply
  6. Strive Masiyiwa Post author

    Whenever someone says to me, “I would like to start a business but I don’t know, what I should do?”
    My answer is simple, “you are a perfect person for a franchise. Investigate a franchise option.”

    Reply
  7. Strive Masiyiwa Post author

    Another thing:
    As you approach a potential franchisor to sell or consider you for a franchise, chances are you are going to be turned down. And if you are really an entrepreneur, you will keep trying, and trying, and trying–just don’t give up!

    Reply
  8. Strive Masiyiwa Post author

    In answer to this particular question; let me suggest that even if you have some ready answers like KFC, and McDonalds, do not give me these answers. The question requires you to do some research, because only then will the answer benefit you!
    Who knows in the research you might even find a niche for yourself, and start an exciting business.

    Reply
  9. Strive Masiyiwa Post author

    Allied Mapfumo, writes:

    Sir can you also talk about the risks involved in franchising that is both sides because many people think there is no risk especially if you a franchisee…..

    My reply,
    You are right that there are many risks associated with franchises…but tell me a business that has no risks?

    Reply
  10. Strive Masiyiwa Post author

    Yakz, writes:

    Sir, we are indeed proud of you and your vast intellectual business knowledge but nevertheless what you trying to sell in this part of the world especially in Nigeria, it will be to expensive for the ordinary man because of cost of internet service to stream live events. However, you can make it affordable by collaborate with some of the network providers to give incentive or rather subsidized your service in their networks apart from that alot can’t afford it…..
    Thank you Sir!

    My reply,
    Kwese Tv, will be available in Nigeria through the App, and also on Satellite Dish, in a few weeks.
    If you want to watch programming like Kwese Inc on your mobile phone, and data is too expensive try using a Wi-Fi hotspot.
    Kwese Free Sports Channel is free, and you can watch live English Premier League games for free, even there in Nigeria. Tomorrow is Arsenal vs Swansea!

    Reply
  11. Strive Masiyiwa Post author

    Ishuma, writes:

    Dr Masiyiwa thank you 1’s again for your profound wisdom and insight on business, what you do here helps feed thousands of houses daily. I have a question thou, I have never heard of any of your companies in Namibia, not even one, I’ve also realised that very few popular big busineses come to Namibia apart from those dealing in Mining, fishing, Restaurants and real estate, why is this the reason? Why have you gone to every other country bordering Namibia, except Namibia. Thank you sir.

    My reply,
    My brother I’m totally chastised by your comment. You are right!
    When Namibia became independent, I travelled there with a desire to start a business. I was so excited, and wanted so much to be part of the country’s future. I just did not have the skills to make it happen, and I went home rather dis-spirited!
    I never came back for business, even though I have followed developments there, and have been on many other occasions, including an unforgettable dinner with then President Nujoma and Ambassador Andrew Young.

    Reply
  12. Strive Masiyiwa Post author

    Joseph, writes:

    Thnk u sir.I have always believed in franchises BT I thought u have to pay for the right to use bizness name et al.
    Your last question is not clear;do mean to say what are some other requirements we have not discussed?

    My reply,
    Unfortunately this is what many people think. There is more to franchising than having the right to use a name of a big company.
    I cannot on this platform teach you everything you need to know about how to get a proper franchise, but let me assure you that if you take the time to now research about franchises for the next few months, this could be the breakthrough you and many others have been waiting for.

    Reply
  13. Strive Masiyiwa Post author

    Kotey, writes:

    Sir, your piece just gave me an idea. There have been talks about transforming the informal sector into the formal sector and I’ve been asking myself how the Private Sector which are not in the informal sector can participate. If these organisations can give opportunity to the informal sector enterprises to become franchisee too their business it could reduce the 86% labour rate in the informal sector into formal sector. Thanks so much Sir. Please don’t stop. This has been on my mind for long. God bless you

    My reply,
    This is in part what I tried to say at the Vatican Summit at which big businesses met to discuss how they can help create more employment.
    To give you an example, I instructed our Mobile company to help women entrepreneurs in the informal sector by giving them specially designed kiosks from which they could sell our products. Their income went up dramatically and we created lots of jobs.
    This is a form of “micro-franchise” which helps impart business skills from large businesses.

    Reply
  14. Strive Masiyiwa Post author

    AK, writes:

    SUPERCUTS in the US is a barbershop and saloon with over 2000 franchise stores. Its a great great model of replication and expansion! Regis Corporation, the world’s largest operator of hair salons and parent company of SUPERCUTS INC runs 12,700 salons globally. Supercuts was founded in the 1970s and performs more than 100,000 haircuts (for an average price of $17) and 1,200 hair colors daily.

    My reply,
    The best haircut I ever had was at a franchise Barbershop in DC. It was totally amazing to see these highly trained young people cut hair like an art form!
    If you understand the processes involved in creating a Franchise Business Model, you can turn a very mundane business into a national, and Pan African business generating millions in revenue, just like these guys at Supercuts.
    I want to challenge you to think about how you can either get a franchise like this, and expand it across Africa, or how you can use a franchise model to expand any time of business.
    Come on guys; what are you waiting for!

    Reply
  15. Strive Masiyiwa Post author

    “Mr Masiyiwa, I want to own a big business”, the woman cried out.
    “Do you have a business now?”
    “I have a beauty salon, but I want to do something like mining.”
    “If you understand the Franchise Model, you can turn your beauty salon into a franchise which will operate in every town and city on this continent, and become bigger than most people who go into mining.”
    One of these days, her eyes will open, and she will see she has everything!

    Reply
  16. Richard Mubiru

    Strive, you are right. Franchising is a platform for nurturing entrepreneurship, an investment opportunity for investors as well as an expansion strategy for the franchisor.

    We are promoting franchising in Uganda and it will be an honor if we hosted you to share such business insights in Uganda. This quarter (March 2017) we are organizing a national competitiveness forum where you would have a platform to engage with the local business and investment community. Please let me know if you can be available for this opportunity in Uganda and i will follow up from there.

    Reply
  17. Eku McGred

    Prof Strive from my research i have found out that Kwese sport is not yet available in Sierra Leone, our young people cant wait to have access to such an excellent platform. Would love to be part of the team that makes this happen #SierraLeone

    Reply
  18. Strive Masiyiwa Post author

    Sheltone Vengesa, writes:

    There are numerous examples. Spur steak ranches, pannarotis pizza, mug and bean, ocean basket. There is a big advantage in running a franchise. The cost is the major set back. I visited ocean basket website for their requirements. The costs run into millions of rands. When you are starting up a store where do you get that kind of money.

    My reply,
    There are franchises out there which require only a few hundred dollars to get started.
    Not all franchises are to do with fast food restaurants.
    My job is to point you in the right direction.

    The person who is going to take this idea forward and turn it into something, is the one who will take months of research, reading and making notes from websites. Asking questions, and doing further searches for information.
    This is a huge global industry.

    Reply
  19. Strive Masiyiwa Post author

    Sodiq writes,

    Dr Strive, I am placing my comment here because it fits in to what’s happening to me right now. I am a laundry and drycleaning start up owner in Nigeria & I want to build it to become Nigeria’s largest one-stop laundry & drycleaning outfit. I have planned the online & offline requirements and processes and I don’t need all the money in the world to achieve this… but the sad thing is am not getting any support and its been really hard. Nigeria is a tough place to run a business right now. My inability to expand is costing me money, time & opportunities. But I am passionate about this dream & I will soldier on! Thank you for the inspiration. A little support is all I need and I will build it—Nigeria’s Largest drycleaning outfit. My name is Sodiq Abdulrahman, from Nigeria.

    My reply,
    Investigate franchising in this industry. Come back to me again in a few months. Very few people know that this is one of the most franchised industries.

    As for things being tough in Nigeria; it is currently very tough in most of Africa’s 54 x countries. Forecasts are that it will get even tougher this year right across Africa.
    Don’t despair.

    Reply
  20. Strive Masiyiwa Post author

    Tinashe Chimuriwo writes:

    I agree with you Sir Strive Masiyiwa. I am one person interested in this saloon and hair care business. I got the PICTURE from one of your posts about your barber man and I researched into the area. I found out that it’s a big industry though complex so I’m still working on discovering how to venture and play big. I have seen there are big big players like Regis Corporation with branches in so many countries and employing thousands of people. I love it.

    My Reply:

    Tinashe Chimuriwo,

    I love your attitude. This will take you far.
    Africa has the potential right now to absorb tens of thousands of franchises in different industries.
    Most people think they know what is a franchise until they really sit down to investigate properly.

    Reply
  21. Strive Masiyiwa Post author

    Mohamed Osman, writes:

    Franchise is one of the best options for those who want to reduce the start-up risks. Also, its one of the options a business can obtain its systems-management, accounting, HR or marketting. It may also be the business entrance gate for those who want to be future enterprenours.

    My reply,
    MOHAMED IF I HAD BEEN GIVING PRIZES THIS WEEK FOR THE BEST RESPONSE TO MY POST, I WOULD HAVE GIVEN IT TO YOU!!!

    Your comment is exactly why I have introduced this subject of franchising.

    THIS YEAR IM PARTICULARLY KEEN TO GET ENTREPRENEURS TO UNDERSTAND THE IMPORTANCE OF HAVING THE RIGHT PROCESSES.

    Reply
  22. Strive Masiyiwa Post author

    SHARON IS ON HER WAY TO BEING A BILLIONAIRE!
    (Follow her story).

    Thank you so much for your knowledge sir! I became an entrepreneur at 21 years when I was in University , I started with just 5$ in clothing business that expanded so well to start purchasing cloths of close to 1000$ , thanks to your articles!
    Is it possible to franchise clothing industries ? So much taxes and time is wasted in importing good clothes yet it is a business that can never fail if done well
    Thank you!

    My reply,
    This one is one of my future billionaires—so glad to make your acquaintance!
    Sharon, I would like you to read the book about Sam Walton, the founder of Wal Mart. He started exactly as you started.
    Stay focused (don’t be distracted into other areas); learn your trade carefully, and smartly. Study modern processes involved in running a business effectively including things like inventory management and merchandizing techniques. Work with numbers, understanding your sales, and margins properly. Keep good accounts. Pay your taxes.
    If you can get a franchise from a reputable international player in this industry, go for it. Tell them I recommended you!

    You will be just fine.

    Reply
  23. Strive Masiyiwa Post author

    Henrietta, asks:

    Sir, is it possible to turn a poultry business into a franchise? Like the woman cried out, i’d like to have a very large business that will stand the test of time. Sir, if possible kindly tell me how to go about it.

    My reply,
    I’m sure the poultry industry has many franchising opportunities. The mission to research is with you, and I would be keen to see where it leads you.

    Reply
  24. Strive Masiyiwa Post author

    Mabel, writes:

    From my research of 100s of businesses, i found these interesting 10

    1.Papa John’s – min £100,000
    2.Subway min £101,500
    3.Pitman Training – £××,×××
    4.Photography for little people £××,×××
    5.Riverford Organic £××,×××
    6.Tasty Tubs £×,×××
    7.Jasper’s catering £××,×××
    8.Tax Assist Accountants £ *
    9.Premier sports £*
    10.Avanti Tax accountants £*

    I found some of the required minimum investment are only 4 figure digits!
    Certain ideas are only a click away if_ you’re connected to the right page like Dr Masiyiwa.

    My reply,
    Great start Mabel. Actually if I was giving prizes today, you would have got it!
    Fortunately no prize is big enough compared to where this is leading you.
    You have just scratched the surface, and in six months come back to me, if you have persisted in this line of research.

    Reply
  25. Strive Masiyiwa Post author

    Afterthought:
    Sometimes a business looks like it is using a franchise model, when it is not. Only proper research rather than casual observation will show you which is which.
    If you think a business is using a franchise model, go online and check, or even send them an email. It is the only way.
    An even better way is to Google search, and enquire from Franchise Associations.

    Reply
  26. Strive Masiyiwa Post author

    Joseph, writes:

    Proud to own some these Ecocash Green Kiosks, thanks for Empowering us Dr Strive Masiyiwa and we are also Empowering many Zimbabweans in the process through Employment and bringing technology and financial services to many Rural Communities we operate in. So proud and Inspired by your Vision Dr Strive Masiyiwa, you have created many opportunities for a lot of people in Africa than you can ever imagine. God Bless you.

    My reply,
    I really appreciate your comments.
    Thank you and God bless.

    Reply
  27. Paul Gomba

    Good evening Dr Strive Masiyiwa, its an honour sir to comment on this platform, of one of our own successful business guru. Mine is a question, when is Kwese tv going to be in Zimbabwe.

    Reply

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