Uncategorized 16.4.2014 07:00 am

Black franchise numbers dim

Image courtesy of stock.xchng (Christian Ferrari).

Image courtesy of stock.xchng (Christian Ferrari).

Black-owned franchises are on the decrease, despite efforts to relax access to credit for start-up entrepreneurs.

Deputy Minister of Economic Development, Hlengiwe Mkhize,says the number of black franchisees stood at 33% in 2010. By 2012 the figure had dropped to 20%. Access to capital is the main reason black people struggle in a sector still dominated by white men.

Speaking at the Franchising Association South Africa (Fasa) international expo, Mkhize said the failure of black people to come into the sector could be attributed to South Africa’s historical legacy of capital being in white hands.

SA Franchise Warehouse recruitment and training director Belinda Bradley says government, through the Industrial Development Corporation, is beginning to award capital to business start-ups, especially black franchisees.

And it is easier for entrepreneurs to get access to capital when they opt for the franchising route, says Barney Klassen of Barclays Africa.

Franchising developer Makabongwe Thabethe has been running the Nyama and Chips franchise for two years and says business “has been good”. He has recently opened three more shops in Pretoria and five more in Johannesburg.

On transformation he says: “White people and Indians find it easy to get into franchising”, but, on the other hand, it is not difficult to get development finance.

 

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