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Franchising takes off in Africa despite the age of uncertainty

Franchising takes off in Africa despite the age of uncertainty

IWG explores the aspects of franchising that makes it a popular choice among African Investors in times of uncertainty.

We are more unsure of what the future holds than ever before. That’s according to figures taken from the Global Economic Policy Uncertainty Index (GEPU) in December of last year.

As nationalism and political division continues to impact markets across the world, financiers looking to start a business would be right to be apprehensive about taking potentially the biggest financial risk of their lives.

However, recent statistics show that the number of investors opening franchised establishments has continued to soar irrespective of the global shaky eco-political environment.

According to Webber, “Owning a franchise allows you to go into business for yourself, but not by yourself.” A franchise provides franchisees (an individual owner/operator) with a certain level of independence where they can operate their business. It also provides an established product or service which may already enjoy widespread brand-name recognition.

Given that global uncertainty was at its highest going into 2019, why has franchising continued to gain popularity among those looking to diversify their business interests?

When looking at the business environment, it’s important to remember that nobody knows where they’ll be 10 years from now, and this has always been the case, not least for potential entrepreneurs. One of the major pulls of franchising across the world is that it’s using an established, proven business model that’s already working.

When opening a franchise, investors also have a clearer idea of when they can start to enjoy the ‘good times’. If you’re operating under an established brand with a proven business model, the business can provide you with research on how long other franchisees took to begin generating a profit. This predictability is something that isn’t possible when you venture into a business on your own.

Franchising also offers security in the form of guidance and knowledge. Taking IWG as an example, we offer a high level of expertise to our franchise partners, accrued over 30 years of experience running flexible workspaces. We provide access to all the resources, training materials and marketing collateral that can help our partners build a successful business. We also offer continued one on one support throughout the process of building their franchise from selecting their first location, dealing with brokers and finding appropriate agreements, to office layout and design considerations. Continued support is a common part of franchising agreements across all sectors and offers a crucial level of reassurance that you don’t get when building a start-up from scratch.

It’s difficult for a business starting out in any industry to ensure that they have the right amount of space from which to operate, they are catering for the right number of clients and that they are making the right service offerings to satisfy the needs of potential clients.

“One of the key benefits of opening a franchise with an established provider, such as IWG, is that the master brand places a lot of importance on ensuring that the same level of client experience is delivered consistently, and so it is as important to us that our franchise partners get the right level of support, as it is to them,” said Mo Nanabhay, IWG Franchise Development Director (Africa).

Regus, an IWG plc company, started the flexible working movement over 30 years ago and has remained the global leader, growing to 3400 locations worldwide. Its proven business model has shown its resilience through many economic cycles in Africa and globally.

The group of IWG companies supports over 2.5 million community members which includes successful entrepreneurs, individuals and small businesses as well as large corporates. Regus in Africa has worked at creating a professional business environment where African businesses can flourish and grow.

Franchising offers a more secure, proven business model for investors looking to grow their business opportunities at a time when uncertainty about what the political and economic future of the world looks like is widespread.

Growing a business is always a risk, but franchising gives the investor a head start through expert support and knowledge about the market they are entering in to, as well as an established brand and customer base upon which to build. With an external environment that seems to change every day, it is likely that franchising will continue to gain popularity as a business model for the foreseeable future.


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