Econet Franchise Model Investigation

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An investigation into the effectiveness of the Econet Franchise model in the Harare
area – to identify if there are any opportunities to improve efficiency and reduce costs.
Team
Name Student Number Telephone
Msengezi. M. 19746423 0772222763
Biza. I. 19746474 0772222308
Manatsa. M. 19747179 0772222589
Myers. S. 19748914 0774222364
Matthews. T. 19746539 0774222371
PROGRAMME NAME: ECONET WIRELESS MDP 2015
MODULE: BUSINESS DRIVEN ACTION LEARNING (BDAL)
FACILITATOR: LYNNE BEZUIDENHOUT
DUE DATE: 24 JULY 2015
NUMBER OF PAGES: 110
CERTIFICATION
We certify the content of the assignment to be my own and original work and that all sources
have been accurately reported and acknowledged, and that this document has not previously
been submitted in its entirety or in part at any educational establishment.
FOR OFFICE USE
DATE RECEIVED:

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Contents
Executive Summary..........................................................................................................5
1. Introduction.......................................................................................................................... 7
1.1 Introduction to the company: Econet Wireless Zimbabwe. .................................................... 7
1.2 Introduction to Commercial Division..................................................................................... 8
1.3 Introduction to effectiveness of the Econet Franchise model............................................... 10
1.4 Introduction to the Project................................................................................................. 10
2. The identified business need................................................................................................ 11
3. Impact analysis.................................................................................................................... 13
3.1 Individual Impact............................................................................................................... 14
3.2 Team Impact..................................................................................................................... 14
3.3 Business Impact ................................................................................................................ 14
3.4 The external environmental Impact.................................................................................... 14
4. Stakeholder Engagement and Management.......................................................................... 15
4.1 Introduction...................................................................................................................... 15
4.2 Stakeholders Identified & Prioritised for the project............................................................ 15
4.3 Stakeholder Engagement Strategy...................................................................................... 17
5. The Desired State................................................................................................................ 18
5.1 Literature Review.............................................................................................................. 18
5.1.1 Introductioninto Franchising....................................................................................... 18
5.1.2 Benefits of Franchising ................................................................................................ 20
5.1.3 Disadvantages of Franchising....................................................................................... 26
5.1.4 Franchise Benchmarking.............................................................................................. 27
5.2 Franchise Benchmarking against Econet Franchise Shops..................................................... 28
5.3 Franchising in African Telecommunications Companies ....................................................... 33
5.4 McKinsey 7S Model and application to Franchising.............................................................. 35
6. The Current State................................................................................................................ 38
6.1 Introduction................................................................................................................ 38
6.1.1 Research scope and methodology................................................................................ 38
6.1.2 The target stakeholders............................................................................................... 39
6.1.3 Questionnaires ........................................................................................................... 40
6.2 The Current Econet Franchise Model.................................................................................. 41
6.3 Financial Analysis of Econet and Franchise Shops- Desk research ......................................... 42
6.3.1 Cost to Econet for operating through franchise shops ................................................... 44

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6.4 Feedbackfrom questionnaires........................................................................................... 45
6.4.1 Internal managementfeedback on areas of Econet Support.......................................... 45
6.4.2 Franchise shops feedback on areas of Econet Support................................................... 48
6.4.3 Analysis of KeyPainPoints for Franchises..................................................................... 50
6.4.4 Customer Feedback..................................................................................................... 54
6.5 Gap Analysis...................................................................................................................... 60
6.6 The Econet PESTEL ............................................................................................................ 62
6.7 McKinsey 7S Model Misalignment...................................................................................... 63
6.8 The SWOT Analysis- Econet Shops...................................................................................... 65
6.9 The Econet SWOT Analysis Franchise shops........................................................................ 66
7. Key Issues........................................................................................................................... 68
7.1 Costs ................................................................................................................................ 68
7.2 Efficiency.......................................................................................................................... 68
7.3 Quality of service............................................................................................................... 68
8. Possible Solutions................................................................................................................ 69
9. Business Constraints............................................................................................................ 69
9.1 Selection of Solutions - Decision Matrix.............................................................................. 70
10. Recommendations........................................................................................................... 71
10.1 Franchise Strategy........................................................................................................... 72
10.2 Review the franchise reward model.................................................................................. 74
10.2.1 Cost benefit analysis-Reward Model........................................................................... 75
10.3 Automated In-store customer care................................................................................... 76
10.3.1 Cost benefit analysis - Automated In-store customer care ........................................... 76
10.4 Optimize Shop Footprint.................................................................................................. 78
10.4.1 Cost Benefit Analysis for territory mapping:................................................................ 78
10.4.2 Cost benefit analysis Econet Owning the Lease ........................................................... 78
11. Change Management Process .......................................................................................... 80
12. Implementation Plan ....................................................................................................... 82
12.1 Implementation planfor the Quick Wins........................................................................... 82
12.2 Implementation planfor the Reward Model revision......................................................... 83
12.3 Implementation planfor the Automation and Standardisation of IT Systems ...................... 83
12.4 Implementation planfor the Optimisation of the Shop Footprint ....................................... 84
13. Conclusion ...................................................................................................................... 85
14. Personal Learnings........................................................................................................... 87
i. Personal Learnings – Mellany Msengezi............................................................................ 87
ii. Personal Learnings - Itayi Biza........................................................................................... 88

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iii. Personal Learnings - Sophia Myers.................................................................................... 89
iv. Lessons from the Project – Martin Manatsa ...................................................................... 91
v. Personal Learnings - Andrew Tigere Matthews.................................................................. 92
15. References...................................................................................................................... 94
16. Appendices ..................................................................................................................... 96

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Executive Summary
This report offers an insight into the potential cost savings and business efficiency
improvements to the existing franchise model for Econet Wireless Zimbabwe (EWZ).
EWZ is Zimbabwe's largest provider of telecommunications services, with a diversified
portfolio of start-up business across multiple industry sectors.
Due to the deflationary economic conditions in Zimbabwe, and the current cost
structures within the organisation, there is significant pressure for prudent cost
management within Econet.
The report focuses on a holistic investigation of Econet’s franchise models. It begins
by investigating the optimal approach to franchising in the telecoms industry, as well
as benchmarking against other successful franchise models employed in the
Zimbabwean market to determine the ideal desired state. It then goes on to analyse
the detail of Econet’s franchise implementation, to determine the current state and
identify the existing gaps in said implementation.
From this detailed analysis it was clear that the cost of running an Econet franchise
shop, is much lower than that of an Econet owned shop. Additionally, the quality of
service experienced in Econet owned shops exceeds that found in an Econet franchise
shop. Furthermore, the rewards offered to franchises are not deemed to be sufficient
to tie them in to focusing strictly on Econet business, and this adversely affects their
quality of service.
Another issue discovered is related to the distribution of Econet shops. These are not
optimally situated, with high density areas not well catered for and other shops being
in close proximity to each other, increasing cannibalisation of sales. To improve the
profitability and sustainability of Econet shops, a territory model could be implemented
to address the shop distribution inefficiencies. Finally, there are multiple opportunities
for automation and optimisation in the systems used in both franchises and Econet
shops.

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In conclusion, the franchise model clearly has benefits and provides an opportunity for
maximising revenue and reducing costs, if implemented correctly. In addition, the
fragmented nature of the current franchise implementation reduces the benefits
Econet currently receives from this channel. The adoption of a unified Franchise
Strategy will help to galvanise and focus attention on the leveraging the substantial
potential benefits available to Econet.

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1. Introduction
1.1 Introduction to the company: Econet Wireless Zimbabwe.
Econet Wireless Zimbabwe (EWZ), referred to as Econet hereafter, is a mobile
communication services company founded by Dr. Strive Masiyiwa in 1996. Operations
commenced on the 10th of July 1998 after a four year legal battle with the Zimbabwe
Government denying it an operating license. The company is listed on the Zimbabwe
Stock Exchange (ZSE) and has a market capitalization of $495 million- the second
highest to companies listed on the (ZSE). (Herald 2015). Despite market share decline
from 70% in 2011 to 58% in 2014, against Telecel 19% and Netone 24% (POTRAZ
Q4 Report), Econet remains the market leader.
Econet Market and Value Share vs Competition.
Econet Wireless still commands leadership in most other areas such as market value,
Products and Services bouquet, innovation and brand presence.
Econet’s vision is to provide telecommunication services to all people of Zimbabwe.
Below is the mission and values.
Mission:
To serve Zimbabwe by pioneering, developing and sustaining, reliable, efficient and high-
quality telecommunications of uncompromising world-class standards and ethics.
Values are:
Pioneering
Professionalism
Personal
58%
19%
24%
Market Share(Active 3 Subscribers)
Econet Telecel NetOne
67%
22%
11%
Value Share (USD)
Econet Telecel NetOne

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The above mission therefore drives and directs Econet to continue growing and
expanding so as to achieve its vision. The company is also socially responsible and
contributes more than 2% of its annual revenue to Higherlife Foundation which runs
four key Trusts, namely; Capernaum Trust (supporting orphans), Joshua Nkomo Trust
(supporting education of high performers), Christian Community Partnership Trust
(supporting ministers of the Gospel) and National Health Care Trust (supporting health
issues nationwide).
1.2 Introduction to Commercial Division
Franchising is part of commercials’ strategy to achieve market presence and ensure
product and service availability. The commercial division in Econet Wireless is
responsible for generating revenue through products and services offered. The
division manages and is responsible for new product development, sales, distribution,
marketing and all customer services functions. The commercial vision that supports
the business vision is, ‘To be a sales, service and marketing driven business with the
primary focus of end-to-end client service delivery. Business action plans by “all” must
support the goal of client centricity.’
Corporate Objectives supported by Commercial division
1) Maximise shareholder value.
2) Continuously increase efficiency of fixed assets utilization
3) Entrench & defend Econet brand leadership position in the market.
4) Focus on quality of service for the benefit of our customers
5) Reinforce Econet’s image as a committed corporate citizen of the country.
6) Maintain position as a preferred employer.
The commercial structure, refer to appendix 1, is headed by a Chief Commercial and
Customer Services Officer and has General Managers responsible for each
specialised function. In total, the division has 600 employees against a total of
Econet’s workforce of 1,200 employees. Whilst the division is responsible for
generating revenue, it is also mandated to do so in an effective and efficient manner
by managing all related cost of sales.

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Main Products and services offered are prepaid voice, broadband, Value Added
Services and devices. Refer to table below for description of each product.
Econet Products & Services
Service Description
Voice Services:
Prepaid brand - Buddie
Post-paid brand - Premium
A mobile voice calling service that is either prepaid or post-paid.
Broadband/
Data Services
A mobile service that enables one to connect to the internet
wherever they are, anytime of the day and is pay as you go or
post-paid.
VAS (Value Added Services) Non-core services beyond standard SMS (Short Message
Service), IVR (Interactive Voice Response) and 3G (3rd
Generation) or Data. Can be entertainment services, Gaming,
etc.
Devices Mobile handsets, Laptops, Accessories, tablets
To ensure ubiquitous availability of all products and services, the Commercial division
has the widest retail chain presence in the market as shown below. This supports its
market share of 58% and assists in achieving business revenue targets.
Retail Distribution
Channel Type Econet Net One Telecel TelOne
Econet Own Shops (shop) 28 12 21 23
Mini Shops (containers) 42 - - -
Franchise (standard shops) 37 - 2 -
Franchised Mini Shops (containers) 20 - - -
Store In Store 60 1 - -
Retailers 4 4 4 -
Distributors 674 50 70 -
Green Kiosk 1,127 250 100 -
Econet owns 43% of standard shops to 57% franchised shops nationwide, which led
to the research into the effectiveness of the Franchise Model.

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1.3 Introduction to effectiveness of the Econet Franchise model
The topic in study is ‘An investigation into the effectiveness of the Econet Franchise
model in the Harare area and identify if there are any opportunities to improve
efficiency and reduce costs. This study aims to contribute to Econet how best it can
gain efficiencies from its Franchise distribution strategy. It will review the various
economic, financial and non-financial and also benchmark advantages and
disadvantages of the current franchise model against its own shops and consider what
would be the most optimal option in the current environment.
Econet uses different models to distribute products to the market. These include
Econet`s own standard shops, mini shops, dealership and the franchise model. There
are different costs, benefits and returns associated with each distribution model.
However, the scope of this study will focus on the franchise shops in the capital city,
Harare, versus the standard own shops. This is due to time, financial and human
resources limitations involved if the study was to be nationwide. The franchise model
has been in use since 1998 and the franchises and own shops practices do not differ
markedly between cities or towns. We believe that the limited study will therefore still
prove relevant to the rest of the franchise shops countrywide.
1.4 Introduction to the Project
Franchising is a contractual relationship between a licensor (franchisor) and a licensee
(franchisee) that allows the business owner to use the licensor’s brand and method of
doing business to distribute products or services to consumers. While every franchise
is a license, not every license is a franchise under the law. Franchising is simply a
method for expanding a business and distributing goods and services through a
licensing relationship. Put another way, in a franchise a business (the franchisor)
licenses its trade name (the brand, such as Econet Shop and its operating methods
(its system of doing business) to a person or group operating within a specific territory
or location (the franchisee), which agrees to operate its business according to the
terms of a contract (the franchising agreement). The franchisor (Econet Wireless)
provides the franchisee with franchising leadership and support, and exercises some
controls to ensure the franchisee’s adherence to brand guidelines.

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The project examines the effectiveness of the Econet Franchise model in the Harare
area by reviewing various key performance areas using interviews. The hypothesis
will propose whether the franchise model favours business profitability or rather
increases the cost structure. The research shall take cognisance of the available
literature on the franchise model including proven business models and how the
business can benchmark for proper implementation of the franchise model. The
available literature shall be compared with primary research for a sound comparative
analysis to be made. The primary research shall be confined to the Econet Shops and
Franchises in Harare area so as to manage resources. Findings shall be presented
and analysed culminating into the recommendations for the business. Data collection
methods to be used include questionnaires administered to internal and external
stakeholders.
The rational of the project is that Econet is looking for serious cost management
methods to reduce costs and yet remain present in the market so as to achieve its
financial targets and remain customer centric.
2. The identified business need
Economic conditions in Zimbabwe are considerably constrained and with deflation at
-3%. This means there is very little cash circulating. Added to this, there is decline in
voice revenues facing telecommunications companies globally, Econet finds itself in a
similar position. Year on year, Econet voice revenues declined by $10m a month.
Econet must focus on reducing overheads, as well as finding ways to increase revenue
so as to improve the bottom line. However, it is necessary to understand these
business needs in the context of franchise shops versus Econet owned shops to
determine any opportunities to contribute towards achieving the desired efficiencies.
There is a clear business need identified around cost of Econet’s footprint of customer
service and sales centres throughout the country drives up the costs of sales.
Franchising is critical to Econet`s business as a way of reaching out to its customers
base which is scattered throughout the country. This underpins Econet’s strategic
push to defend market leadership, as Econet currently has the largest market share
of product and service offerings for any Telecommunications company in Zimbabwe.

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The advantages of the Franchise model are clearly and well documented, and the best
example of these can be found in successful Franchise implementations, such as
those employed by McDonalds and Nando’s. The clear strength is in the regional and
national market penetration possible through franchising, and the contribution this
makes to the establishment of dominant market share. McDonalds has been
particularly successful on this front:
“There are now more than 30,000 McDonald’s restaurants in over 11 countries and
territories, serving nearly 50 million people each day. In 2006, McDonald’s global sales
were over $57 billion, making it by far the largest food service company in the world.
In 1955, Ray Kroc realised that the key to success was rapid expansion. The best way
to achieve this was through offering franchises. Today, over 70% of McDonald’s
restaurants are run on this basis.” (McDonalds Corporation, 2008).
Nando’s, is a more regional example of a successful company that has built its rapid
growth on franchising in a similar manner: “Nando’s African initiative began with an
outlet in Swaziland in 1991. Later, outlets were opened in Namibia, Zimbabwe,
Botswana and Mauritius. Further international expansion followed in response to
requests from new operators. By early 1997, 46 Nando’s operations had been
established in eight countries outside the South African monetary union, including
Australia, the United Kingdom, Canada, Israel and Portugal”.
A further advantage of this growth in reach is that it creates an increased barrier to
entry for competitors, and if done successfully, can be a significant source of
competitive advantage.
Another advantage that a franchise model provides to the franchisor, is that it provides
the potential for easier access to desirable locations and due to the franchisee not
sharing the same recognisable company name as the franchisor, they are more likely
to have access to more favourable lease terms.
This highlights a clear need to review on the existing set up of Econet owned shops
versus franchise shops to determine whether there are any opportunities to reduce
costs to Econet, while still maintaining or even increasing the reach and commitment
to service the customer base effectively.

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Some key factors to consider in this regard are maintaining a standardised level of
services for customer, maintaining a consistent look and feel, and providing access to
the same sales lines in all stores. Furthermore, in order to streamline costs the
business is keen to understand what the impact of reducing the current commissions
offered to franchisees, and or reducing their margins.
Some of the key factors affecting sales revenues in stores that must be explored
further are the number of sales driven by Econet stores versus Franchise stores,
product support provided to customers on the full range of Econet product offerings,
reach in the market and access to customers Econet may not be able to cater for.
3. Impact analysis
Carrying out this project will have positive impact on various stakeholders, internally
and externally. It’s a project that will yield both short term and long term benefits for
the business as summarised in the table below and explained in paragraphs to follow.
Impact Analysis
Individual Team Business Environment
 Distribution
planning
simplified
 Monitoring of
outlets more
closely.
 Salessupport
given to
franchisees
and own
shops
 Branding
costs
 Relationship
building and
management
with the
franchisee
 Finance
 Warehousing
(Logistics)/
Procurement
 IT/ IS
 Risks
(Stock/systems
access)
 Customer Services
 Revenue
assurance
 Warehousing and
logistics
 Sales staff who
supervise
franchisees
 Risk and
compliance staff
 IT support staff
 Marketing
 Improve cost of
sales
 Gross Margin
 Sales increase
 EBIDTA
improvement
 Increased
efficiency
 Sales efficiency vs
service issues
questioned.
 Headcount and
Staff costs.
 Office rentals
 Risk management
and insurance
costs
 Service fees
 Customers
 Industry – more
employment/less
 Franchisees
operations and
processes
 Competition
 Pension contributions
 Government taxes

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 Business analysts
3.1 Individual Impact
At individual level, this project is going to assist in franchise planning and increasing
performance. I will assist in identifying areas to monitor the franchise shops from an
operational point of view and inculcate a closer personal relationship.
3.2 Team Impact
By investing in this project, various internal divisions will also be impacted. Among
others are finance, procurement and logistics, customer services and marketing. They
may be need to review process from the various divisions who all feed into the
franchisees and this will produce long term benefits as process improvement will likely
result in efficiencies and cost savings
3.3 Business Impact
The business impact is one of the most important reasons the team is embarking on
this project. Its` well reviewed and most recommendations should lead to the
improvement of cost of sales and this will filter down to the bottom line. A successful
and efficient franchise model has proven processes and procedures that allows
achievement of the financial goals of the franchisor and franchisee.
3.4 The external environmental Impact
The greatest impact of this project in the external environment will be our customers.
Customers seek value for money, effective and efficient service. Improved Franchising
may cause competitors to feel threatened and may respond by trying to copy the same
model or finding other ways to reach the market better.

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4. Stakeholder Engagement and Management
4.1 Introduction
Stakeholder engagement and management has been identified as a key way to get a
fuller understanding of the internal and external attitude to Econet’s franchise model.
A stakeholder can be defined as “any individual or group who has a vested interest in
the outcome of a body of work. Key Stakeholder is any stakeholder with significant
influence on or significantly impacted by the work and where these interests and
influence must be”. (Australian Government Department of Immigration and
Citizenship, 2008)
Stakeholder management involves the identification, prioritisation, engagement and
evaluation of stakeholders, as displayed in the below diagram.
4.2 Stakeholders Identified & Prioritised for the project
For this project, stakeholder management was identified as a method to determine
suitable stakeholders within and outside of the organisation to ensure we have a richer
understanding of the issues relating to the Econet Franchise model, its impact on
others, and to identify potential improvements. The purpose is to involve, as much as
Identify
•Identify stakeholder groups
•List relevant group members
Prioritize
•Analyze level of Interest /
Power over the business
•Evaluate engagement priority
based on assessed rank
Engage
•Determine engagement
strategy per stakeholder
•Plan and execute engagement
interventions, frequencies and
responsibilities
Evaluate
•Monitor / Inform reactions,
responses or effects of
interventions
•Plan and execute mitigating
interventions

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possible, those parties who will be affected by the decisions/solutions we propose,
and to also get buy in into the project
The tables below details our stakeholder analysis for both Internal Stakeholders and
External Stakeholders. In these we have ranked the stakeholders by their level of
influence and interest, on a scale of 1 to 5, with 1 being low and 5 being high.
Stakeholder Analysis-Internal
Internal Stakeholders 1 to 5 Scale 1 to 5 Scale Total
Influence Interest Score
Commercial Director 5 5 25
Sales and Distribution GM 4 5 20
HOD - Indirect Channels 5 5 25
HOD - Direct Channels 5 5 25
Marketing GM 4 4 16
Regional Sales Manager 3 5 15
Finance Director/CFO 5 5 25
Commercial Business Analyst 3 5 15
Chief Risk Officer 4 4 16
Chief Information Officer 4 4 16
Shop Branch Manager 3 5 15
Customer Services 3 5 15
IS Networking Manager 3 5 15
Warehouse 3 4 12
HR Talent 3 4 12
Supply Chain 3 3 9
Legal 4 3 12

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Stakeholder Analysis-External
External stakeholders 1 to 5 Scale 1 to 5 Scale Total
Influence Interest Score
FRANCHISEE OWNER 4 5 20
FRANCISE MANAGER 2 5 10
Customers 4 3 12
Agents 2 4 8
Dealers 4 4 16
Suppliers 1 1 1
Street Vendors 3 4 12
Branch Manager/Supervisor 2 5 10
Customer Consultant 2 5 10
Landlords 4 3 12
Consumer Council of Zimbabwe 3 5 15
ZIMRA 4 5 20
POTRAZ 5 5 25
Government 5 4 20
4.3 Stakeholder Engagement Strategy
From the above analysis we have selected the highest scoring stakeholders and
defined the following engagement strategy for them:
Stakeholders Why is it important to talk to
them
What do we
need to ask
them
How will we
get the info
Internal
Managers
They have key knowledge of
existing practices
Internal
management
questionnaire *
Interview
Shop
Supervisors
The have day to day
experience of shops
Econet shop
Questionnaire *
Interview

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Franchise
owners
They understand the view from
outside Econet
Franchise shop
Questionnaire *
Interview
Executive
Committee
Their buy-in and acceptance to
the project is critical for
success
Internal
management
questionnaire *
Inform
Store
workers
They understand what’s
happening on the ground, and
are instrumental in project
success
Econet shop
Questionnaire *
Interview
and inform
Customers They are the key end users,
Understanding their needs is
crucial to ensure any
implementation is successful
Customer
Questionnaire
Telephone
Interviews
* See Appendix 3 for sample questionnaires
5. The Desired State
The desired state that is proposed for the Econet franchise model has been built
upon the following:
 Literature Review
 Interviews conducted with the various stakeholders
 The benchmarking process conducted by the team with other successful
franchises in the Zimbabwe market.
 Use of the McKinsey‘s 7 S model. The questions that were used for each of
the states in the 7 S model are attached in the appendix.
5.1 Literature Review
5.1.1 Introduction into Franchising
Franchising is when the owner of a business (the franchisor) grants a licence to
another person or business (the franchisee) to use its business idea, often in a specific
geographical area (Seid and Thomas 2006). The franchisee sells the franchisor's
product or services, trades under the franchisor's trade mark or trade name and

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benefits from the franchisor's help and support. In return, the franchisee usually pays
an initial fee to the franchisor and then a percentage royalty on sales, although some
franchising arrangements do not include a royalty payment. Libava (2011) also defines
franchising as a method for expanding a business and distributing goods and services
through a licensing relationship. The franchisee owns the outlet it operates and the
franchisor keeps control over how products are marketed, sold and how their business
idea is used. While these franchisees own their establishments, terms of franchising
agreements typically require them to share operational responsibilities with the
franchisor.
To date franchising has grown to be a global distribution strategy. According to Kidwell
et al (2007), research that has been conducted have focused on issues of control and
power particularly in international franchising companies. Franchising has become a
part of everyday life for most consumers the world over. Numerous firms in a variety
of industries have adopted franchising as a method of doing business. As a result,
consumers now often purchase meals and hotel services along with car repairs,
clothing, specialty foods, and many other types of goods and services through
franchised companies.
According to Montagu (2002) a combination of factors makes franchising desirable.
On the one hand, the increased reliance of consumers on brand names, due in part to
increased consumer mobility and greater time constraints, has played an important
role in the development of retail and other chains.
Blair and Lafontaine (2005) argues franchisers and franchisees have a joint goal of
overall business development, as each other’s development or deterioration affects
the other. They both require a working relationship which can be achieved through
frequent information and knowledge exchange on systems, procedures and
behaviours drawn from the franchisor corporate strategy.
Ball (2006) argues that the franchise business model is well suited to retailing and
service businesses as firms in these sectors need to establish a large number of
geographically dispersed outlets to reach customers. Both suppliers of franchises,
namely the firms who organize themselves as franchised chains, and the demanders
of franchises, that is those individuals eager to develop a small local business, benefit

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from the interconnection that franchising affords them. Franchisors and their
franchisees thus cooperate with one another in a kind of partnership. In many regards,
the interests of the franchisor and its franchisees are mutually compatible. Their
cooperation increases value for both parties: both earn more profit than they would
absent this cooperation.
5.1.2 Benefits of Franchising
Bradach (1998) argues that franchising has proven to be one of the most important
methods of doing business in today’s world, especially for small and medium size
enterprises such as Agency “the right to sell a product” Distribution “ the right to
distribute a product” and Licensing” the right to use a brand.” The question of “why
franchising in particular” may rise but the answer may be summarised by highlighting
the various strategic, financial and operational benefits for the franchisor and
franchisee as below:
i. Cost-effective growth
Quinn (1999) identifies cost-effective growth as one of the benefits of franchising. To
the franchisor, franchising means the spreading of risks by multiplying the number of
locations through other people’s investment. That means faster network expansion
and a better opportunity to focus on changing market needs, which in its turn means
reduced effect from competitors. The risks associated with business expansion are
therefore reduced. The franchisor is able to exploit the market more effectively through
increase in customer touch points than otherwise could be the case. The franchisee
contributes the greater part of the initial capital in the form of start-up costs, payment
of the initial and ongoing franchise fees as well as working capital. They also carry
other expenses like staff salaries.
ii. Commitment of franchisee to operate the business
The franchisee is the owner and manager of the business which brings a personal
commitment and motivation to the job. As the owner of the business the franchisee is
eager to see the business succeed, thus ensures maximum customer retention and
maximise profits (Quinn 1999 and Hing 1995). The franchisee is usually self-motivated
since he has invested much time and money in the business, which means working
hard to bring in better organizational and monetary results. This also reflects on more

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satisfied customers and improved sales effectiveness. Since there is a direct
relationship between the franchisor and the franchisee, the increase in business to the
franchisee also benefits the franchisor.
iii. Business efficiencies
Rahatullah and Raeside (2008) argue that while increasing profits is a key goal of most
businesses, it is achievable when the franchisor maintains costs to a minimum while
maximizing efficiency in all areas of the business. From the perspective of the
franchising is shared motivation for success of both franchisor and the franchisee.
Franchisees have invested in a business and therefore more likely maximise revenues
through (administrative) efficiency and protection of the franchise brand. At the same
time both parties are motivated to maximise operational costs (Dianne et al 2006).
Both the franchisor and the franchisee strive for efficiency and profit. They both gain
from the reputation and strong brand name.
iv. Financial benefits
Franchisees make an initial payment in return for becoming a part of your business
and then they continue to pay the franchisor a percentage of their revenue, throughout
the duration of their franchise agreement (Hing 1995). Once the business is up and
running, it is the franchisee who will be paying the franchisor a monthly income. The
franchise system can provide a very cost-effective route for business development and
reduced operating costs which can then be spread for other initiatives like research
and development.
v. Distribution strategy
By using the franchisees' capital, the franchisor is able to establish a large number of
outlets in a short period of time. Rapid expansion can be achieved without incurring
the overheads and costs associated with opening company-owned outlets. (Libava
2011, Ball 2006 and Blair and Lafontaine 2005). This brings benefit to both the
franchisor and the franchise as it helps build consumer recognition quickly and
establish the franchisor.

22
Ducket (2008) indicates that franchising is a strategy for entering into international
markets. The success rate of franchised business in comparison to standalone
business is often mentioned when praising the concept. After seven (7) years, 91% of
franchised businesses are still in operation, in comparison to 20% of individual new
start-ups in the United States and this goes to show the advantage of franchised
businesses compared to individual start-ups Franchise USA (2008). Investment in a
franchise lasts longer than in individual businesses. An increase in the number of
franchise concepts stimulates the Small and Medium sized Enterprise (SME) sector.
A good reason for national policy makers to stimulate the development and roll-out of
franchises concepts Franchise USA (2008).
In planning sales and distribution, it is important to ensure effective territory planning
so as to maximise profitability.
a) Franchise Territory planning in Sales & Distribution
Elgin (2011) highlights that many, but not all franchises grant an “exclusive territory”
to their franchisees as part of the rights given under the franchise agreement. Elgin
explains that this means the franchiser believes that the area is large enough and has
sufficient number of potential customers to enable you to build a successful business.
He argues that a territory should be “Fair and reasonable” to avoid cannibalization of
sales. The Franchise builders (Online) argue that poor territory planning always equal
poor profits. They state that franchise territories must be “just right” to avoid losses.
Below are the three scenarios they argue.
Franchise Territory
Plan
Result
Territories too
large
Extending defect nationwide means a franchisor
designates a fraction of the territories that should have
been made available [leading to lost opportunities]
Territories too small Franchisees struggle to reach profitability, due to failure to
meet sales targets. They may feel that the model is
maculate yet it is poor territory planning.

23
Territories are not
designed at all
Leads to inconsistent territory sizing, franchise disputes
and possible business “losses” for both franchisee and
franchisor.
The Franchise builders argue that franchise territory planning is often neglected largely
due to the cost of the expert resources needed to perform the task. However the
benefits outweigh the costs in the long run. Below are the benefits:
1) Enables Franchisors to create ideally sized and equitable territories.
2) Provide both the franchisor and franchisee with greater success results and
profits.
3) Legal consistency across the franchise system.
Wilson (2012) highlights an explanation by franchise attorney, Harold Kestenbaum
that, “A protected territory provides a franchise with some protection against the
franchisor putting another franchised or company owned unit on the next block or very
close by.
Below are advantages and disadvantages of franchisees operating in an unprotected
territory, Wilson (2012).
Advantages of operating in an unprotected
territory
Disadvantages of operating in an
unprotected territory
Competition may be healthier than artificial
impositions by franchisor.
Leads to intra-brand competition and
inhibits franchisee co-operation and
collaboration for the good of the
brand.
The system has room for flexibility to react and
respond to market changes
Marketing efforts can be weakened
due to poor focussing.
For service businessesin which sales or service
are important, this can be great benefit to a go-
getter who is entrepreneurial and creative.
Franchisees may continually feel
threatened by franchisor marketing
decisions.
Franchise focuses on building core business
values rather than relying on a protected
territory as an inherent value of the business.
Franchisor may have own territory
policies that they effect “randomly”
affecting franchisee profitability.
Allows for more modern marketing strategy
(social media and networks) rather than

24
marketing within a compartmentalised and
stunted artificial territories
b) How to mark territories
Adapted from Buxton Franchise Consultants.
The above process demonstrates how a Franchisor can mark territories for its
Franchisees so that they enjoy the benefits outlined in the section above. Ultimately,
profitability coming from focussed sales and quality customer service is what is desired
from territory demarcations.
vi. Advertising and Promotion
Franchisees benefit from any national advertising campaigns launched by the
corporation with which they have gone into business. In addition, many franchisors
provide their franchisees with a wide range of point-of-sale advertising materials,
ranging from posters to mobiles to brochures. Since such materials are often
expensive to produce, they would otherwise be beyond the reach of some individual
franchisees.
vii. Operations
Franchisors provide franchisees with a wide range of help in the areas of
administration and general operations. The entrepreneur who becomes a franchise
owner is instantly armed with proven products and production systems; inventory
systems; financial and accounting systems; and human resources guidelines. Many

25
franchisors also provide management training to new franchisees, and ongoing
seminar workshops for established owners.
viii. Buying Power
Franchisees are often able to fill inventory needs at discount prices because of their
alliance with the franchisor, which typically has made arrangements to buy supplies at
large-volume prices. This is an increasingly great advantage because today one has
to compete with national chains, conglomerates, buying consortiums, and other large
franchises. The small-business person who purchases in small quantities cannot
easily compete in terms of buying power. By becoming a franchisee, a business has
the collective buying power of the entire franchise system.
ix. Research and Development
Most small business owners are able to devote little time or money to research and
development efforts. Franchising, then, can provide a huge lift in this regard, for many
franchisors maintain ongoing research and development systems to develop new
products and forecast market trends.
x. Consulting Services
It is in the franchisor's best interests to do all it can to ensure the success of all of its
franchisees. As a result, the entrepreneur who decides to become a franchisee can
generally count on a wide range of training and consulting services from the larger
company. Such services can be particularly helpful during the start-up phase of
operations.
xi. Risk sharing
Keizer (2008) argues that the franchisee and franchisor share the risks of an
expanding business. For the franchisor it means that it can overcome the sometimes
problematic acquisition of scarce capital. Without this capital some businesses would
not be able to grow as fast as they do with franchising. For the franchisee, buying into
an established franchise system with a proven track record results in less risk
compared to starting a business from scratch. The investment costs for the first
franchise are relatively high, and are made by the franchisor. All the following
franchises require smaller investments than the first franchise, making it interesting for

26
potential franchisees. The cost of expansion is usually limited to the cost of franchise
recruitment, training and assistance prior to opening. Franchises invest their own
equity and borrowed funds in premises, equipment, fixtures, furnishings, inventory and
the working capital necessary to establish a franchise unit. The only cost to the
franchisor is that of the overheads not met by the franchisee’s initial franchise fee.
5.1.3 Disadvantages of Franchising
As with any investment there is always a certain amount of risk associated with starting
a business. There are of course pitfalls associated with franchising and for a
comprehensive analysis they should be mentioned (Bradach 1998).
i. Less control over franchisee staff
The franchisor cannot superimpose the franchisee management styles as franchisees
are independent businesses. Moreover, they have different goals from the franchisor
which can easily conflict and even lead to legal trouble (Kidwell et al 2007).
Franchisors for example make money by collecting a percentage of sales as a royalty
for letting the franchisee use their brand name and operating system. Franchisees
make money from the outlet's profits. Anything that boosts sales, but not profits will
create conflict between the franchisor and the franchisee.
ii. A weaker core community
It's more difficult to get franchisees as opposed to hired store managers to work
together. Franchisees have an incentive to profit from each other's efforts to generate
business. Franchisees might try to get out of paying for the advertising needed to
attract customers, figuring they will get the customers anyway if other franchisees buy
the advertising.
iii. Legal Regulation
Franchising is a regulated activity and requires compliance with federal and state
franchise laws (Rahatullah and Raeside 2008). To successfully establish a franchise‚
franchisors are required to work with an experienced franchise lawyer to establish a
solid blueprint for franchising. Although franchising serves as a source for the
capitalized expansion of the business, the establishment of a franchise system

27
requires the investment of capital to cover legal fees and the cost of establishing a
franchising infrastructure.
5.1.4 Franchise Benchmarking
i. What is benchmarking?
In franchises, benchmarking usually refers the process and outcome of collecting
sales and expense results of individual businesses, compiling averages and ranking
results. It’s a good way to get a picture of how a network and individual franchisees
are performing. Significant benefit can be obtained when this information leads to
understanding the different processes and practices of top performers and
establishing ways to share these insights and support continued performance
improvement, Kate (2011)
According to Kate, there are three basic types of benchmarking: performance, process
and strategic. Performance benchmarking deals with comparing one company’s
results to that of another, and determining how each company achieves these
results. Strategic benchmarking deals with executive-level, long-term results, while
process benchmarking deals with analysis and comparison of daily operational
practices, Franchising World, (2006). All of these types can be extremely effective
when used properly; however, this article will focus primarily on process
benchmarking, as it is the easiest to apply to franchising and can result in concept-
wide benefits quickly.
No matter if a franchise system is in the food industry, retail or business services, no
concept is outside the benefits of a focused benchmarking effort. In order to keep
pace with competitors in your marketplace, streamlining common tasks and reducing
costs are a continuing effort. Benchmarking is important to the profitability of your
concept as well as your franchisees individual profitability, Franchising World (2006).
Kate, (2011) argues that while many in franchising business agree to the notion that
benchmarking is a good idea, not every franchise system does it. Even in those which
do, some franchisees don’t participate or make the most of the information that is
presented. A thoughtfully constructed and well executed benchmark process helps
sustain strong performance for franchisees and franchisor and is one of the most
powerful ways to support franchisees.

28
ii. Problems that benchmarking solves
Without adequate attention to broad business metrics, and a program to address
performance, franchises can face serious adverse consequences that will threaten
their survival, and the wealth of franchisees and franchisor. Over time, even the best
performing businesses slip from their peak performance, threatening survival and the
wealth of owners. For example, upward pressure on cost of goods sold and labour
costs will erode profits unless noticed and addressed through business improvements.
Without a mechanism to look at broad financial and non-financial measures, sales can
become the primary measure of success and focus of attention. Sales results are
important but sales alone are no guarantee of profit and cash flow. Gaps between
expectation and performance can lead to disputes. These are costly for both
franchisee and franchisor. Because franchising amplifies the effect of poor
performance. It makes good sense to keep an eye on the overall financial performance
and have a means to address deficiencies.
Inadequate franchisee profit can restrict access to funding, hamper ability to reinvest,
and compromise customer service through operational cut backs. Financial stress can
also reduce franchisee satisfaction and advocacy. This can diminish the brand and
make it harder to attract franchisees. It can also result in poor cash flow for the
franchisor and stress for owners and staff.
5.2 Franchise Benchmarking against Econet Franchise Shops
For this project Franchise benchmarking was performed by investigating and
interviewing similar models in the local market. These included interviews with Seeff,
Toyota, and O’Hagans.
Seeff is a real estate company. Its parent company is in South Africa. We selected to
review this organisation because it is in the service industry and we also had an
internal contact to help with getting an interview at the right level.

29
Toyota is in the automotive industry and main focus is car sales and parts. The parent
company is in Japan. We chose to benchmark with Toyota as it is sales driven in
nature and believe this would add value to Econet`s current needs.
O’Hagan’s is a restaurant and pub which focuses on food and beverages. It is also
popular for event catering. Its parent company is in South Africa. We selected to bench
mark with O’Hagan’s it is both a sales and service focused franchise which is similar
to the desired ideal Econet Franchise model.
From the interviews we were able to determine the following comparisons, strengths
and weaknesses of each franchise model.
Econet Toyota Seeff O’ Hagans
Model type Franchise Dealer License Franchise
Initial outlay    
Recurring fees    
Commission    
Comprehensive training provided    
Training paid by Franchisee    
Credit lines provided    
Design of Store    
Site location assistance    
Recommended suppliers   N/A 
Site standards audits    
Advertising assistance    
Recurring advertising fee    
Stocks @ wholesale price   N/A 
Retail price set ?   
Stock audits   N/A 
Restrictions on stocks in store    
Unexpected costs    
Revenues as expected    
Adequate escalation channels    
Effective support systems    

30
i. Toyota model feedback
Toyota provides design assistance and standards for its show rooms and workshops
(look and feel, furniture, and layout). The company performs regular audits of shops
to ensure adherence to its price guidelines, and prevention of selling “Grey” stock.
Vehicle sales to the dealers and compared against dealer sales figures reported and
regular (weekly/fortnightly) site inspections are done to prevent sales of unauthorised
stock. A recommended stocking model for dealers has been provided but there has
been a low adoption of the model.
Toyota holds monthly meetings with dealer principles and Toyota GM’s to keep
channels open and speed up issue resolution. It also operates an open door policy for
dealer principles to make appointments with the MD or respective departments, such
as the National Parts Manager and National Sales Manager. Toyota acknowledges
that the market in Zimbabwe is tough, and vehicle sales dropped by a third for all
dealers after the increased duties levied on new car sales in Nov 2014 was
implemented.
a. Strengths of Toyota Dealer model
Training is provided completely by Toyota, except for materials which are charged for.
The dealers can leverage on Toyota’s global brand, with the dealer only responsible
for their own local marketing.
Toyota sell stock at wholesale prices and provide price guidelines to be used for the
retail selling price by the dealer. The dealer also benefits from Toyota’s bulk
purchasing power.
All shipping and logistics is done by Toyota, giving their dealers an advantage that
their main focus can remain on growing sales and customer service.
Toyota applies restrictions on site locations, to ensure there is no competing between
existing and new dealers.
Finally, Toyota offers case-by-case credit accounts to allow dealers to buy stock,
however, this is only for parts and not for vehicles to mitigate against loan risks.

31
b. Weaknesses of Toyota Dealer model
Toyota has a recommended list of suppliers for the design and set up of sites,
however, this is costly, and is seen as a hidden cost by dealers.
While Toyota offers support and escalation channels to its dealers, there is a long
turnaround time on requests as local management need to liaise with Japan for any
final decisions.
Toyota covers all logistics for dealers, however lead times are usually lengthy and
hence often face difficulties in meeting orders on time. This is as a result of the
Zimbabwe market being less of a priority to Toyota International, due to the relatively
small number of annual new car sales.
The discounts offered by Toyota on stock are based on bulk purchases, and due to
the size of the Zimbabwean and Southern African market, the size of the discounts is
very minimal in comparison to other countries and regions.
ii. Seeff model feedback
Training is provided with the bulk of materials being provided free of charge. There is
an annual conference and a Seeff Training Academy. Any face-to-face training comes
at a cost for the licensee.
The License fee is calculated on the commissions achieved over the prior calendar
year. This essentially means that the better the Licensee does in a year, the higher
their commission charges are the following year. However, the licensee does not have
to pay commissions on individual sales to the Licensor. They have a system which
requires you to enter every listing and every sale you get. The system is open to abuse,
so it is based on trust. However, any violations found result in termination of licenses.
The Licensee’s focus is mostly on Quality and Customer Service.
a. Strengths of Seeff License model
The training provided is extensive, and it uses leverages on low cost technologies
such as online content and Skype seminars.

32
Licensor is very strict on compliance, and if any deviations are noted the license is
cancelled. This works well, as it is a very lucrative sector. Support is given to ensure
brand conformance, in the form of templates for signs and accessories (pens, pads,
calendars, etc.). Seeff maintain brand standards through yearly office awards, where
each site has to submit site photos. They also perform occasional office checks.
Their Information Technology systems give them a cutting edge against other Real
Estate companies in Zimbabwe.
They leverage on their international contacts, giving them a much larger database of
people who want to buy properties. Licensees’ sales efforts are also supported through
a referral system between licensees.
There is a quick turnaround time provided on any requests for support from the
Licensor, with options and recommendations provided within a week.
b. Weaknesses of Seeff License model
The licensor offers no assistance with site location or design. They also offer no
financial assistance. The Licensee is required to pay a marketing levy of $400 per
month in addition to the license, even though there is no Seeff Marketing in Zimbabwe
by the Licensor. The licensee then has to do their own local marketing with no
assistance.
The License fee calculation can be prohibitive, if there is a crash in the market following
a good year. This is because the annual license fee is based on the previous good
year. The listing system is also open to abuse, and requires honesty of the licensee
and constant audit of overheads.
iii. O’Hagan’s model feedback
O’Hagan’s provides design assistance and standards for the look and feel of the
restaurant/Pub. The franchisee is required to pay an annual franchise licence
They perform regular audits of the pub to ensure that they maintain the image of the
brand in terms of the menu offering, quality of the food and the pub. The menu that is

33
provided is standard across the franchises although they allow some slight variations
for local cuisine.
Currently, the local O`Hagans does not enjoy bulk purchase discount from the
O’Hagan’s franchise in general, as there is only one outlet in Zimbabwe.
The tough economic conditions in the Zimbabwe has seen their sales declining as
people do not have as much disposable income as they used to have.
a. Strengths of O’Hagan’s model
Training is provided to the management team and regular workshops are held for the
owners and the general managers. Workshops are usually held in South Africa.
The brand is well known amongst the local clientele that they seek to serve, as most
of them have been educated at South African universities. They have a well-
established business model that is successful towards its target market.
b. Weaknesses of O’Hagan’s model
There is only one franchise shop so they cannot leverage on the bulk purchases other
entities outside Zimbabwe have as they are the only outlet in Zimbabwe
The model depends mainly on brand recognition and word of mouth for its advertising
in Zimbabwe, this means that, they do not enjoy fully the benefits of being part of a
franchise as would be the case if the Franchisor was based in Zimbabwe.
The franchisee is responsible for making the business work in Zimbabwe and due to
the difference in the market environments between Zimbabwe and SA they have no
real support to help them when they have challenges. They are also not offered any
credit facilities so the franchisee has to ensure that they have all the necessary capital
to start and run the business.
5.3 Franchising in African Telecommunications Companies
It was also important to review Franchising in Southern Africa where Econet operates
in to glean insights from bigger telecommunication companies in the area of

34
Franchising. Telecommunication operators in Africa such as MTN, Vodacom and
Safaricom just to mention a few use Franchisees to increase distribution and customer
services reach. Former sales manager for MTN, Cohen (1999) stated that franchising
is the way to expand the growth of the South African Cellular business. He went on to
re-iterate that, the Key is in providing people with the means to empower themselves
whilst servicing communities throughout urban and rural South Africa.
According to the Cell C website, the company has over 150 franchise stores in South
Africa and has a clear, ideal profile of a franchise owner outlined. Fin24.com reported
that Hanley, who handles franchise activities for Vodacom have 179 shops in South
Africa, with 30% (51) run by franchisees.
The main reasons why Telecommunication companies expand using Franchises are:
1. Speed to market faster using franchisees
2. Simpler business financing due to established network, secure brand and
effective structure.
3. Established business and so all operating techniques are already tried and
tested.
4. Readily available support and security from franchisor such as training
schemes, support with sales, advertising and accounts management.
The graph below shows the ratio of Franchise shops versus company owned by
operator in Africa.

35
5.4 McKinsey 7S Model and application to Franchising.
Any franchise model should be a desirable asset within the market that should be
considered as obviously attractive to potential franchisees. This will be essential to
drive growth of the channel, and must be used to create lock-on of the franchisees.
There is need therefore to plan for competitive advantage using the McKinsey Seven
S Model. Refer to appendix for model and questions used to formulate ideal constructs
of the competitive aspects for any Franchise model, in this case, will apply it to Econet
Wireless franchises.
i. Strategy
The Econet shop strategy should increase its customer touch-points by leveraging on
the franchise model; whose cost model is much lower than that of the Econet owned
shops. The strategy should focus on the following areas for it to be successful:
a. Territories
Each franchise should have a well-defined area in which they operate to ensure that
there is maximum benefit derived by the franchise in that particular territory. This will

36
ensure that the franchise is more invested in making that territory profitable and in the
partnership.
b. Lease Ownership
It is ideal for Econet to own the leases of the shops so that it has control of the prime
locations and to safeguard any investments made in the shop build and promotion of
the various locations. This will also make it difficult for new or existing competitors to
take these prime locations.
c. Financing
Providing the franchisee with financing will allow franchises to stock Econet handsets
and devices. This will ensure that all the shops are providing similar products and
services at all locations. This will allow for standardisation of customers experience
and access to products when they enter any Econet shops.
d. Reward Model
Commissions should be in line with the sales and quality of service offered by a
franchise to our customers. Incentives should be provided to the franchises to drive
better service quality to Econet customers.
ii. Structure
The franchise model structure should be such that it creates territories that allow the
franchisee to derive maximum benefit from the franchise. This will also ensure that it
is possible to measure performance of the franchise in each area. There should also
be regular structured communication channels between Econet and the Franchisee to
ensure that there is alignment on strategy and the franchisee is kept well informed on
the new products and services that Econet will be launching.
iii. Shared Values

37
There is need for regular workshops, trainings and conferences between the
franchisees and Econet to ensure that the values that are important to Econet are
adopted by the franchisees. These conferences and workshops will ensure that values
are properly communicated and the franchisee’s participation will ensure that they feel
that they are part of the process of coming up with these values and they had a hand
in their formulation.
To support both improved sales and better stock management, there should be an
integrated approach to Supply Chain Management (SCM) and logistics for both Econet
owned shops and franchises, so that stock discount levels can be improved. This
integration will lead to the following the system construct of franchises that underpins
successful franchise implementations. It will also ensure Econet maintains power and
control and takes advantage of one of the key benefits of franchises, which is Buying
Power.
iv. Systems
The systems that are implemented should allow the franchisees to offer all the services
that are available in Econet Own Shops. Automation of these systems will help to
ensure that the service level is consistent and reduce the headcount and costs to both
Econet and the franchisee. The systems should also allow the shops to be
interconnected so that there is a sharing of information between shops; this will assist
in situations such as directing customers to shops that have products that they might
be looking for.
Additionally, Econet franchise model should include best practice internal controls,
audits and risk management, to ensure quality of service, stock management, and
sales are done as per Econet expectation. This is in-line with the store operations
component of the central theoretical construct of franchises and a key benefit for
operations for both sides.

38
v. Staff, Skills and Style
Training provided should ensure that the staff in franchise stores are equipped with
the right skills and knowledge to serve the customer. There should also be attachment
or exchange programs provided for both Econet and franchise staff to ensure that
there is team building and understanding of the unique challenges faced by each. This
exchange will also ensure that the service provided in Econet owned shops and
franchisees is of a similar standard.
6. The Current State
6.1 Introduction
6.1.1 Research scope and methodology
The purpose of this study is to investigate into the effectiveness of the Econet
Franchise model in the Harare area – to identify if there are any opportunities to
improve efficiency and reduce costs.
Limiting to the Harare area and Econet standard shops to Standard Franchise shops
is due to resource constraints in terms of time and human resources to hold a fully-
fledged assessment. However this limitation will not jeopardize the objectives and
results of the research results.
The research methodology that was used for internal stakeholders and all shops was
mainly descriptive in nature. The data that was collected was through open ended
questions in the form of face to face questionnaires and interviews. The study was
restricted to Harare only so that the project would be manageable and not become too
unwieldy.
In this section we explain four main things:
i. The methodology that was used in this project
ii. How the sample of individuals and organisations interviewed were chosen for
the study.

39
iii. The procedure that the team used to design the 4 questionnaires used and
how data was collected from other sources.
iv. How this data was analysed.
6.1.2 The target stakeholders
The target stakeholders to be interviewed where classified as follows
i. Econet Franchisees
ii. Econet Own Shops
iii. Econet customers served in shops (franchise and own shops)
iv. External franchise companies that would be used for benchmarking.
The interviewees in each of the shop target groups were the management and shop
supervisors where possible, to get a view of the issues involved from 2 different points.
The customers however were randomly selected from the shop database of those who
received service of any nature in the past two months.
The table below shows the shop interviews were held.
Econet Franchises Econet Own Shops External
Franchises
Batlet - Borrowdale Avondale Toyota
Cell Services - Plaza Livingstone Seeff
Weph - Chiedza House Herbert Chitepo O’Hagans
Angels - Westgate Econet House
Batlet - Long Chen Chisipite
The sampling for shops was not random but based getting similar size shops of Econet
Own Shops and Econet Franchisee shops for the comparison to be more comparable.
The Benchmark franchisees were selected on the basis that they were service
focused, sales oriented and that at least we had people we knew in the franchise who
could provide information necessary for us to benchmark.

40
6.1.3 Questionnaires
6.1.3.1 The questionnaires that were used in the interviews were 4:
i. one questionnaire that was relevant from the Econet Franchisee and Econet
Own Shops as these were to be compared,
ii. another for the External Franchisees to get an understanding of how that
particular franchise model works when compared to the Econet one and
iii. One for the Internal Management to get their opinion of the current model and
what they think we can do to improve it.
iv. One for Econet customers who visited our shops (Franchised and direct
standard shops). Limited the shops to the same ones we investigated.
6.1.3.2 Management Interviews
Interviews were conducted with the management team in Econet across the different
divisions who interact with franchises on a regular basis. The following stakeholders
were selected:
 Commercial – to have the commercial perspective on franchises, own shops
and what their expectations and challenges are.
 Risk – to look at how franchises might affect the Econet brand and any other
issues that pertain to the level exposure that Econet has with franchises and
how these are mitigated.
 IS – To get an understanding of the systems side of franchises and how they
connect to the Econet systems and what challenges if there are any.
 Finance – to get an understanding of the costs that are involved and the
revenues that are generated via franchises as compared to our own shops
 HR – to gain an insight into the training that is provided to franchisees and own
shops staff.
6.1.3.3 Customer Interviewing Approach
 Random numbers were selected from the Econet Own shops and Franchise
shops of customers who received any type of service such as replacing SIM
card, purchasing a device among other services.

41
 The customer numbers where randomly extracted from the shops we
interviewed, (refer to table above).
 The interviews were administered via telephone as we had customer numbers.
Refer to appendix 3 for sample questionnaires for each target group.
6.1.3.4 Desk Research
Desk research was used to obtain franchise shops financials and the standard contract
and model to assist in the analysis. The financials obtained included Econet own
shops too, covering operating expenses, shop revenues and the set-up expenses.
Tools such as PESTEL, McKinsey 7s (Refer to appendix 2), SWOT and cost benefit
analysis as well as gap and situational analysis were used to analyse the data and
come up with recommendations
6.2 The Current Econet Franchise Model
The Franchise model for Econet is such that Econet sets up a shop at a location it
deems appropriate. The main selection drivers being for servicing customers in the
area. Econet then identifies a business owner to operate the shop as a franchise owner
if they commit to paying 50% of set up costs incurred by Econet and also operating
model. The set up cost to Franchisee is interest free spread over 3 years. The
Franchisee is however required to provide a bank guarantee for them to access credit
from EWZ for products and services for resale. There is also a one-size-fits-all model
in granting credit to the franchisees.
The main services the franchisee offers are similar to Econet owned shops which
include selling airtime, connecting new subscribers, collecting bill payments for post-
paid customers, selling devices and other general service enquiries about Econet
products and services. Of strategic importance to Econet is also ‘group’ businesses
products and services such that the Franchisee has also been mandated to offer the
services in their shops. These are services such as EcoCash, a mobile money transfer
service and ConnectedCar, a vehicle tracking solution and Solar products such as
lanterns and candles. The additional services are more avenues for earning more
revenue to the Franchise operator. For this study, we limit it to the mobile operator

42
products and services. Econet advertises all its products and service for both
Franchises and own shops as the branding is the same.
Due to difficulties in accounting or even monitoring customers who come in for general
enquiries, Econet pays the Franchise what is called service fee. For standard shops it
is $3000. However it ranges by shop size from $560 to $3000. This fee cushions the
franchisee from operating expenses such as administration, rentals, salaries, security
costs, insurance and power. In addition, the franchisee receives commission for
various business activities as per table below:
Item Discount/Commission
Receipting customer bills/ purchases 5% commission
Sim Replacement 10% commission
Usage Commission on Post-paid lines 7.5% commission
Airtime Sales 9.5% discount
Bounty on new contract line connection $20 once off per line
Buddie SIM pack sales 25% discount
Notes:
*Discount on handsets is based on handset model ( Range +/- $2)
*Devices, mainly handsets are given on account where the mark-up is $1/$2 per cell phone.
6.3 Financial Analysis of Econet and Franchise Shops- Desk research
Econet shops and Franchise shops both have similar expenditure line items month on
month which enable their operations to run smoothly. These include among others;
Salaries, security, transport and logistics, shop leases and maintenance charges.

43
Below is a table showing operational expenditures for six months for both Franchise
Shops and Econet shops.
Franchise Shops 6
Months Analysis Sept-
February 2015
Batlet
Borrowdale
Cell Services Weph
Chiedza
Hse
Angels Batlet-Long
Chen
Operating Expenditure
(USD) 55,873 181,820 14,802 21,428 23,469
Econet Standard Shops
Sept - Feb '15 Analysis
Avondale
Shop
Livingstone
Shop
Hebert
Chitepo
Shop
Econet House
Shop
Chisipite
Shop
Operating Expenditure
(USD) 724,643 582,910 718,741 1,824,144 363,824
6.6.1 Reasons for vast variations in expenditures
From the questionnaire responses, internal management highlighted that it was more
costly for Econet to operate own shops to franchise shops. The costs are mainly driven
by staff costs and professional services. In Econet, the reasons for huge expenses in
these line items where highlighted as below:
i. Staff costs
Econet pays more per consultant than Franchise shops. This is reason for very low or
non-existent staff turnover in their shops to Franchise shops. Each consultant also
accrues leave days, overtime and any other related costs per employee given by
Econet. Most consultants’ educational level is a first degree.
On the other hand, Franchisees recruit lower qualified consultants, pay them the
minimum wage and overtime rates.
ii. Professional services
Econet hires professional services which include security and training. For example,
Econet has cash in transit services every day who collect cash at the end of the day
for them and bank it. They also hire security guards from a company, and per shop
can have at least one or two guards. Franchisees however carry out their own banking
by keeping cash in the safe overnight and banking it in the morning using own staff
member. Instead of hiring security guards, they also have a permanent staff member
hired as a security guard earning a salary. Another cost that Econet incurs is that of

44
training services. To continuously keep service standards excellent, training is done
very consistently unlike in Franchise shops who actually rely on in store training by
going into Econet shops. At times Franchise shop owners do not send consultants for
professional service training as they are required to pay for the service.
Other costs such as connectivity and fixed administration costs to Econet are not
included in the above expenditures. This is because they are not apportioned to each
shop by head office.
6.3.1 Cost to Econet for operating through franchise shops
Each month, there are financial costs that Econet incurs for operating through a
Franchise shop. The main lines are commission of airtime sales and service fees.
The table below shows the 6 months costs for one of the Franchise shops reviewed.
Econet only pays out a service fees which is standard at $3,000. Some smaller
franchise shops it is $1,500. Depending on volumes sold, the airtime commission
varies per shop. Comparing these costs, to a similar Econet shop costs shows that
Econet is better off Franchising out more - (Econet incurs $478K it pays to Franchise
vs $748K when it operates its own shop).
The Franchise model is such that Econet incurs all set up costs for shop build, in this
case $118,0000 and the Franchise owner pays back 50% back over a period of time,
(normally 3 years), interest free. To date Angels has paid $60,000. If Econet would
have borrowed the money, Econet is paying interest for the Franchise shop and not
passing it on to the Franchise shop.
Month September '14 October '14 November '14 December '14 January '15 February '15 Total
Franchise Shop (Angels) Servicefees 3,000$ 3,000$ 3,000$ 3,000$ 3,000$ 3,000$ 18,000$
AirtimeCommission 98,958$ 95,608$ 78,849$ 70,811$ 65,358$ 50,744$ 460,329$
Total Cost to Econet 101,958$ 98,608$ 81,849$ 73,811$ 68,358$ 53,744$ 478,329$
Econet Owned Shop
(Hebert Chitepo) Expenditure 84,282$ 131,058$ 194,389$ 97,000$ 76,195$ 135,816$ 718,741$
Variance (17,675)$ 32,450$ 112,539$ 23,189$ 7,837$ 82,072$ 240,412$

45
6.4 Feedback from questionnaires
In order to get insights on the comparisons between franchise stores and Econet
owned shops, management interviews were conducted with managers from various
divisions across the company such as commercial, procurement, risk, Information
Systems, finance, shop supervisors and shop managers. The management and staff
of franchises were also interviewed. All of the findings from these interviews are
summarised in the sections below.
6.4.1 Internal management feedback on areas of Econet Support
i. Quality of Customer Service and Staff expertise
The general consensus across the managers interviewed was that that the quality of
service and customer experience in Econet franchise shops is poorer than in Econet
owned shops. This is mainly due to the fact that the systems available for franchises
to serve customers are restricted in franchises and do not offer the full customer
support options. The inadequate system access rights mean that the franchise
customer care consultants cannot assist customers timeously, and often have to refer
customers to Econet shops (which are often congested) or the call centre to have their
issues resolved.
Additionally, the level of staff competence is an area of concern. Franchises take on
staff they can afford, whom often don’t fit the same profile as Econet staff. This requires
significant investment by Econet in Training, and this investment often does not bear
fruit, as once the staff are trained and upskilled they move on to better opportunities.
The high staff turnover in franchises also indicates a weakness in the reward
management and this is also evident in the low levels of engagement in franchises.
This all results in differentiated quality of service in the different types of stores.
ii. Handsets and other service support
Franchises offer limited product and services to customers, for example on handsets
they do not offer the full product range and they usually offer their own which may
sometimes be low-end-products. Franchises do not offer the contract package due

46
to stock availability and credit control restrictions and refer customers to Econet
Owned Shops for such requests, resulting in poorer support services for customers.
Additionally, mobile phones are provided on account with a significantly smaller
margin compared to non Econet sourced handset. Currently, Econet provides credit
facilities as opposed to consignment stock, which can be abused. This is due to the
fact that currently, overdue debtors (90 day debtors) are increasing every month and
dealers have defaulted on amounts of up to $10m in the past. Added to this, the lack
of controls and processes leads to increased risk
With regards to the EcoCash mobile money service, franchises do carry suitable float
like the super-agents in an Econet owned shops, therefore they have to look for float
from other operators. This causes challenges from EcoCash agents expect this
service from any Econet Shop.
These issues highlight the challenges that franchise shops have to keep up with the
purchasing power and resources at Econet’s disposal, and provides an opportunity
for Econet to partner with these franchises to improve performance.
iii. Training
The training provided is perceived as adequate and franchises are equipped to run
shops as per approved processes and procedures. The training costs are absorbed
by Econet. The shop consultants also get on-the-job training from Econet owned
shops.
iv. Systems Availability
The systems used in all stores are paid for and supported by Econet. While these
systems do experience downtimes, these challenges are experienced in all shops,
thereby not differentiating the service levels.

47
However, the poor investment in back-up power sources by franchise shops (due to
capital constraints) worsens the downtimes they experience, due to the intermittent
power supply nationally.
v. Inventory System
There is no inventory support system hence both franchises and Econet owned
shops have to call other shops to find out where a particular product is available,
resulting in increased customer waiting times.
vi. Network
With current cost management practices in the organisation, the high OPEX costs for
Econet owned and Franchise shops is difficult to maintain. This high OPEX also
contributes to the cost of sales, however, is not fully visible to the business.
Additionally, Franchise owners get provided with network equipment by Econet,
however, they do not maintain the equipment, and Econet are required to replace the
faulty/damaged equipment. For example, power issues at franchise sites blowing IS
equipment.
There exists an opportunity highlight these costs to franchises, so they have a more
holistic understanding of Econet’s operating context, and can buy into the shared
values of the organisation
vii. Processes for replenishing stock
Airtime and products stock movement is inefficient, with franchises having to visit
Econet dispatch premises to stock these items. Decentralisation of stock dispatching
by allowing franchises to purchase from all Econet owned stores would reduce time
wasted on logistics.
Furthermore, the Econet image is negatively affected when we build demand, without
an adequate supply for example with handsets that we advertise to be in promotion
only for customers not to find them in stock.

48
viii. Communication
There are several recorded incidents of Econet taking a product to market without the
service centres being fully informed and equipped to support these. This has an
additional impact on the staff moral within franchises, as they do not feel truly a part
of Econet. This contributes to the notion that the poor communication of Econet’s
Strategy and Culture to its franchises distinguishes the level of service offered at
franchise and Econet owned shops.
ix. Material Support, Branding and Advertising
Econet provides branding, advertising uniforms, equipment and systems to franchisee
staff members for use in service provision. In addition, Econet also provides branding,
however, sometimes after a noticeable delay. This contributes to the uniformity of
stores.
x. Termination of franchise agreement
Franchise agreement can be terminated in instances when franchises flout rules and
regulations, for example when they disrespect another’s territory or significantly
overdue commission payments. Additionally, if they are continuously not meeting
customer service levels, stocks and sales targets set by and agreed on with Econet,
the agreement can also be terminated.
While terminations are catered for in the contract, no terminations have occurred to
date as the commercial team have always taken corrective action by training
franchises and giving them warning letters.
6.4.2 Franchise shops feedback on areas of Econet Support
i. Quality of Customer Service and Staff Expertise
It was generally accepted that the franchise stores service quality is not as good as
that in Econet owned shops. The feedback provided was mostly in line with those
given by internal management. They also added that they feel that they feel that they

49
are treated as outsiders by the same teams they are meant to work with. This affects
their morale and commitment to the business.
It is also acknowledged that franchise staff calibre issues, but advised that this is due
to remuneration and rewards from Econet not allowing them to hire suitable staff.
Additionally, due to their inadequate profits, they cannot maintain staffing levels to
match the business needs. This results in them not being able to service the peak
traffic periods, e.g. Fridays, month-ends and holidays. This result in customers leave
their premises without being attended to.
ii. Handsets and other service support
Both the internal management and franchise management agree that this is the state
of service regarding gadgets and mobile money and the reasons given are similar.
Franchisees added that they have to focus on poorer quality handsets in order to
survive, as Econet handsets do not give them adequate profit margins.
iii. Training
Franchises requested Econet to offer them entrepreneurial training and senior level
management training for the directors and managers, to enable business growth.
Franchises also have valuable experience and input which could be included in
training manuals, indicating poor communication between both parties. Induction
training for new employees is required to bring new employees up to speed with the
full range of product and service offerings.
iv. Systems Availability
The billing system is often unstable system at peak times of month. It is reported that
on occasions when the franchise system is unavailable, the Econet owned shop
system is available. A case in point is the Borrowdale franchise which ends up referring
customers next door to the platinum shop whose system will be up most of the time.
This poses an opportunity for optimisation of the system access and availability.
v. Inventory System
The Econet system does not contain individual accounts for each franchise outlet, but
one account for the group. Franchises that have a number of outlets also have a

50
number of consultants per outlet hence having one account in the system results in
reconciliation challenges when attempting to trace SIM or airtime movement by outlet.
vi. Network challenges
The franchise management insist that Econet must provide them with back-up power
sources as they are also responsible for maintaining the Econet brand. They cite the
costs of doing this on their own as prohibitive under their current income levels.
vii. Communication
Econet has been reducing franchisee remuneration without sufficient advance
communication. This directly jeopardises their profitability, as they have existing
commitments e.g. security, rentals and salaries.
viii. Material Support, Branding and Advertising
Econet does not invest in adverts that are specific to particular shopping centres.
x. Factors considered when selecting businesses for a franchise agreement
The previous performance in other product lines is considered as well the experience
in what were they distributing and the training the owner has. They must be a
registered company with adequate capital and credit worthiness. Franchises also
added that their good locations also contributed to them being chosen for
consideration as franchises.
6.4.3 Analysis of Key Pain Points for Franchises
i. Costs and cost drivers
The main cost drivers for franchises are salaries, rentals and bills. The franchises
advised that they make more money from the non-franchised business, but they get
substantial traffic from Econet customers. They remit 96 -97% of revenue collected to
EWZ and retain 3%. This leaves them with little surplus to fund their operations
including buying stock, hence further curtailing their revenue generation ability. Airtime
sales worth $700,000 provide revenue of $4,500. The risk associated with such a high

51
volume of airtime sales far outweighs the benefits. It is clear from this feedback that
the reward model is not satisfactory for Franchises.
Franchisees must also provide bank guarantees to access credit from EWZ, thereby
increasing their costs. There is also a one-size-fits-all model in granting credit to
franchisees. They are requesting that this be done on merit after EWZ also looks at
the historical patterns from the franchises.
Franchise shops struggle to provide all services offered by Econet due to capital
constraints. These include SIM cards, airtime sales, line replacements and handsets.
Franchisees also offer value-added-services such as EcoCash, a mobile money
transfer service and Econet ConnectedCar. Some are now offering the recently
launched Steward Bank Agency Banking service. The additional services are avenues
for earning more revenue but some of the services e.g. EcoCash and Steward Bank
agency require a sizeable cash investment which may not be readily available as their
funds are often tied up in prepayments towards airtime as well as pay running costs.
This wide product range is under significant demand, and stores struggle to have
adequate stock, and the stock is not well distributed. This results in inefficiencies
where some stores are over stocked and others are understocked.
Franchisees advised that they receive ongoing support from EWZ but this is not
adequate as it does not make them viable. They believe that the airtime commission
they earn is low compared to the risk they take. They believe that there is higher risk
than the return they get. Some feel that they are subsidising Econet.
The cost drivers for Econet owned shops on the other hand are the huge set up costs
and the day to day staff costs. The daily cost of sales and airtime working capital is
also heavy. Econet owned shops’ security, insurance, rentals and CIT costs are much
higher than those of franchises, as franchises are usually not charged as much as
Econet owned shops and often don’t take the security precautions that Econet does.
Some of these costs are compulsory for own shops under Econet procedures,
whereas franchises can forego the costlier items that are not in line with their return.

52
ii. Shop construction and territories
The cost of building a shop is shared 50/50 with Econet and the franchises pay this
from the commission earned. There is currently no clearer policy and model that
outlines the desired approach. Some franchise outlets were recommended by Econet
while others were outlets that the franchisee was already operating from.
Sometimes franchises mismanage their leases and have to vacate the premises. This
impacts Econet’s footprint and access to prime locations. Econet could take over their
leases and pay on their behalf, while recouping the cost from the service fees.
There is a lack of territorial protection from Econet as they are opening more EcoCash
agents in areas where there are franchise outlets. Econet are also deploying green
kiosks in close proximity to franchises. At times an Econet owned shop is set up right
next to a franchise outlet hence Econet seems to be competing directly with their own
franchises.
iii. Econet Shops Space and Queuing time
Though it is generally agreed that there is higher customer service level in own shops
and that these are one-stop shops to handle all customer queries, there is a lack of
adequate space in own shops. The shop layout often does not fully meet customer
needs. Accessory display cabinets often take up a lot of space, even in small outlets.
The cabinets are often not in use, hence Econet are often not receiving a return on
investment, and are also reducing the look and feel of their own stores. This reduces
space also leads to longer queues in stores. With these queues resulting from traffic
of which 70% is from people with support queries, rather than purchase, this directly
reduces the revenues generated. Additionally CCTV cameras show 30% of customers
leaving after peeping and seeing long queues.
iv. Warranties
Econet owned shops utilise the Econet supplier warranty arrangement, where
suppliers give Econet swap-stock to cater for any products that may be defective e.g.
on every 100 items bought, Econet gets 2 for warranty. Franchises utilise their own

53
supplier warranty arrangements and there have not been reported cases of customers
who have faced challenges with a franchise due to a defective product that was not
exchanged. Internal management also pointed out that selling grey handsets does not
necessarily mean that they are of inferior quality, but it just means that these will not
have come through the Econet systems and Econet will not be making a margin on
these as they are independently sourced. Some of these will not have gone through
Econet’s rigorous checks for approval for sale in our shops or franchises.
v. Econet own shops to continue
Management is in agreement that Econet should maintain some Econet owned shops
so that Econet can offer the expected service levels in some key locations. As such, it
accepts that there could be some loss leader shops, such as Joina City branch, which
gives good customer care, despite making a loss.
Own shops also give Econet control on the business, insight into the markets and
sales dynamics as well as profit retention.
vi. Risks associated with franchises
The diversion of money to other areas that may be more rewarding to the franchise is
a significant risk. This effectively leaves the franchise with fewer resources to buy
airtime and stock other Econet products for resale.
Most franchises are family owned businesses so if the person running the business
dies or is no longer in a capacity to run the business, the business also dies.
Sometimes franchises fail to manage their leases well by not consistently paying
rentals and they may be asked to vacate the premises after Econet has invested in
shop-build, and customers are used to a particular outlet. Sometimes Econet has had
to take over their leases and pay on their behalf then withhold money from their service
fees. However, the downside of this is that once the landlord knows that it’s Econet
not the franchise paying rentals, they increase the rentals, hence it becomes more
costly to run the outlet.

54
Commercial management is also concerned about franchises pursuing dollar sales at
the expense of customer service and franchises switching to another telecoms
operator in the event a large competitor enters the market.
There is also a concern that franchise bargaining power can become too powerful
resulting in them demanding more commissions.
vii. Potential areas for working with franchises for greater benefit
Both the internal and franchise management agree that Econet can work on systems
improvement for better customer support by giving franchises access to relevant
systems.
There is need to give more capacity to franchises for them to be 100% like EWZ owned
shops as franchisees are pushing Econet products.
Internal managers agree that franchises are outsiders and are treated as such but
franchise management are of the idea that this is so serious that it actually demoralises
them and hence it negatively affects their effort towards promoting the Econet
business.
It is also clear that there are significant communication gaps between Econet and its
Franchises, and this is an area where a little effort will go a long way.
Franchises do not always have the same value system as Econet hence there is need
to ensure the culture is transmitted to them by engaging them often. This can be done
through regular forums with franchises. Executive teams should visit franchise stores
to get a sense of them, and to build buy in to Econet Values.
6.4.4 Customer Feedback
A total of 19 customers were interviewed who had accessed different services from
the 4 Econet Own Shops and 3 Franchise shops. The Econet own shops that were
considered were Livingstone, Avondale, Graniteside and Joina Center. The franchise
shops were Long Chen, Westgate and Margolis Plaza

55
All the customers had accessed the shop in question more than once. The services
that they accessed in the shops are shown in the tables below.
Econet Owned Shops
Service Livingstone Graniteside Joina Avondale
SIM replacement 5 1 1
Handset Purchase 1 1
Ecocash 1 1 1
Unblocking Line 3
Assistance with handset 2 1
Bundle & Airtime Purchase 1
SIM Purchase/Registration
Franchise Shops
Service Long Chen Westgate Margolis Plaza
SIM replacement
Handset Purchase 2 1
EcoCash 3 3
Unblocking Line
Phone Accessories 1
SIM Purchase/Registration 1 2
Bundle & Airtime Purchase 1
The customers accessed a variety of services from the 7 centres although Livingstone,
Westgate and Long Chen had more services accessed from the interviews that were
conducted. This is however not representative of how busy each shop is, as it only
talks to the sample that was taken.
All the interviewees except for two said that for the services that they were interested
in, they could be received from all the shops that were considered. Of the customers
who could not get required services
 One could not change the details on his line in Avondale
 Another couldn’t purchase a solar lantern from Westgate, which was out of
stock.

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