3rd franchising awareness workshop on july 28 2011
3RDFRANCHISING AWARENESS WORKSHOPTHEME: ENTREPRENEURSHIP AND JOB CREATION THROUGH FRANCHISING IN UGANDA (July 28, 2011; Hotel Triangle Kampala) Topic: OVERVIEW OF FRANCHISNG Abbey Mutumba- +256 712 683334 (MBA,BCHM, NEVI International) firstname.lastname@example.org; email@example.com; firstname.lastname@example.org Franchising Researcher/MUBS Franchise Development Executive / Abbedax
Content• Overview of Franchising• Your Challenge• Studies on the theme• Q&A• Way Forward
Overview of Franchising What is Franchising?• The practice of contractual replication of a successful, time-test and proven business model by franchisees with permission and guidance (flexible, adaptable, mutual success- driven support) of the franchiser in right environment.• Commercial Vs Social/Micro-franchising• It is a collaborative strategy where both parties are committed towards mutual success and multiplier benefits to other stakeholders in the market.• Franchising is for any organization that enjoys proven success and uses a branch network or any portfolio organization• Franchising Parties/Stakeholders include the franchiser, franchisee, franchising lawyer, government bodies, the relevant professionals, and other stakeholders• IT IS ONE OF THE WORLD’S PROVEN ENTREPRENEURSHIP, JOB AND WEALTH CREATION STRATEGIES in countries like USA, China, UK, India, Malaysia, Brazil, South Africa, Egypt, Zimbabwe, Kenya, and very soon Uganda among others.• HOW DO YOU BENEFIT?
Entrepreneurship and Job Creation Benefits• No matter which form and/or type of franchising, the following benefits await you as a;3. Franchisee - Safer and more easier to succeed in starting-up your business - Your own business With support/parenting from the time-tested and proven franchiser - - etc2. Franchiser - Using other people’s money (OPM) and entrepreneurial efforts/abilities to quickly expand the business especially in unfamiliar and complex markets like Southern Sudan - Extra revenue and profits from the franchise fees - - etc3. Any other party or stakeholder such as a franchising consultant, lawyer, and accountant among others. LET US BRAINSTORM NOW!!! At least 5 benefits per category?
Your Challenge (opportunities and threats)• Success belongs to those who are ready for the opportunities and threats• Franchisers are aggressively starting to target the youths in their franchisee recruitment and selection programs e.g Valpak Entrepreneurship Award Program (Tammy, 2010)• The world’s leading brands are now entering Uganda and East Africa through franchising, which is a entrepreneurship, job and wealth creation strategy- OUR THEME TODAY
• Our government is including the promotion of franchising into Uganda’s national competitive strategy besides other initiatives• The up-coming Abbey’s Franchise Show which will bring out the untapped franchising opportunities for you in East African towns like Arusha, Bujumbura, Kigali, Kisumu, Iganga, Masaka, Fort Portal, Arua, and Eldoret• THREATS: Franchising Environment, Few local Franchiseable Brands/Franchisers, and the Youths (universities and schools) are not yet involved BUT Tammy 2010’s article titled ‘Youth Movement in Franchising’
Example: SOCIAL FUND FOR DEVELOPMENT “ SFD” EGYPTIAN FRANCHISE DEVELOPMENT ASSOCIATION “EFDA” TARGET GROUPS New graduates Small entrepreneurs Unemployed Redundant labor from Privatization Women 7 Source: Social Fund for Development- Egypt
AN EXAMPLE: Entrepreneurship and Job Creation through franchising development through training + training through franchise (Source: Young Africa Franchise in Gambia)Young Africa – integral training of underprivileged young people2 centres in Zimbabwe (2001 & 2005), 1 centre in Mozambique (2007) vocational training through production: dressmaking, carpentry car mechanics, metal works, construction, shoemaking, etc Young Africa franchises each department to local teachers / training entrepreneurs community without production: programmes: computer applications, crèche, youth club, commercial subjects, library, internet café, academic coaching centre, art promotion arts
Choosing the Right Franchise Partners Right Franchiser (Franchiseable Brand) Franchise Favorable Strategic Fit Franchising -Complimentary resources Environment -Franchising - Cultural fit at Mutual Franchise awareness several levels Success -Associations - Shared innovations -Franchising laws -Competitive -Infrastructural corporate image development - Mutually beneficial working relationship Right Franchisee (Preparedness)
Studies on Entrepreneurship through Franchising• General agreement among the respective researchers that franchising is a better entrepreneurship strategy especially for those who are less experienced/disadvantaged BUT have the POTENTIAL• Selected Findings & Conclusion by Mutumba, (2010) on ‘ Perception of Franchise Purchase as an Entrepreneurship Strategy’ -Lecturers, consultants, teachers, facilitators, policy makers, etc who have proper understanding and positive perception of the franchising strategy motivate and properly guide their clients using SUCCESSFUL CASE STUDIES, and VICE VERSA - The findings disagreed with Watson & Kirby, (2004) whose findings showed that respondents within the lower age brackets (the youths) have the lowest level of understanding of the franchising concept.
Selected Implications and Further Studies• Lecturers/facilitators need to be guided on how to choose the right case studies and where to encourage and/or discouraging their customers about franchise purchase as an entrepreneurship or business start-up strategy in Uganda and East Africa.• More Ugandan franchising research, development, and publications is needed• ANY SUGGESTIONS FROM YOU?Areas for Further Studies;6. A bigger study that includes other dep’ts of other business schools universities, institutes, and secondary schools that teach/facilitate on areas of ‘Entrepreneurship, Job Creation, and Franchising’7. A research survey on a similar topic like ‘The Public Perception and Efficacy of Franchise Purchase in Uganda’.
Job Creation through Franchising: CASE STUDIES• McDonald’s (the world’s leading food service retailer, with more than 30,000 franchise restaurants serving 52 million people in more than 100 countries), as at 2009. How many jobs has it created now?• Uganda’s Warid Telecom has grown to 50 AREA FRANCHISEES, each one running about 700 outlets/shops, each outlet employing at least 20 staff, which continues to create an estimated 70,000 jobs for you and me. WHAT ABOUT THE LIKES COCA COLA, PEPSI COLA, WHITE ROSE, THE PETROL STATIONS, NAKUMATTIS, SHERATONS IN UG?
Some Franchiseable Brands for You• International Franchisers• Uganda’s Local Franchisers (1st 3 brands are Current franchisers, MUBS & UgaChick can become)
• In Botswana the total number of people employed is among three sectors• 15% by franchised businesses.• 25% by parastatals and independent private business.• And 60% by our EMPLOYMENT RATE IN BOTSWANA government.The franchised businesses thatTake up 15% of employment;Commercial banks, retail Parastatal &Chains, restaurants and IndependentAgencies Government Franchise Source: Botswana………… business
Challenges for the development of franchising in Botswana• In Botswana we do not have a regulatory body to monitor good business practice between franchisers and franchisees.• A lot of Batswana have no capital and some very little earnings to put together and present as contribution to financial institutions. These people though are new to business and therefore need mentoring to equip them with skills necessary to run successful businesses.
• With mentoring institutions and access to capital we can eliminate the start-up problems mainly experienced by Batswana entrepreneurs.• It is imperative to consider which products and services appeal to the Botswana market because of a small population we have hence limited spending power.
Good News for Uganda• CICS • Ministry of Finance,• FIN Uganda MTTI, Justice, etc are• This series of starting to focus on Franchising Awareness promoting franchising- Workshops related interventions• More leading • AfDB franchisers eyeing • FASA Uganda • Potential donors are• Likelihood of local becoming aware and Franchiseable Brands- interested My Thesis
Back to You• Lessons?• Q&A after our BREAK TEA• Way Forward for your entrepreneurial journey?
THANK YOU +256 712 683334 email@example.com You are welcome to Abbedax, Abbey’s Franchise Show, andFIN Uganda- Franchise Investment Network of Uganda