Franchising – the secret sauce

Some positive signs notwithstanding, South Africa’s economy remains sluggish at best. One only has to look at the dismal results achieved by JSE-listed retailers to see how dire the situation really is. Predictably, some of the underperformers blame consumers for not spending enough but is this really the problem or should they look closer to home? We decided to find out.

Some look for excuses, others make it happen

One brand that keeps on growing, seemingly almost unaffected by the state of the economy, is the OBC Group , a network of franchised butcheries. We asked their managing director, Tony Da Fonseca, to let us in on their success secrets. The resulting discussion became much broader than this.

Success secrets

Q: Tony Da Fonseca, your stores sell daily essentials in a highly competitive market segment. How do you keep on growing your footprint and the profitability of your stores during a period when others struggle?
A: The short answer is that we do what all good retailers should do. We buy right, distribute right and sell right. Of course, look more closely and you’ll see that there is a little more to it than that.

Q: So, what then is your secret sauce?
A: It isn’t a secret, really, and there is certainly no magic wand involved. What makes us so successful is a combination of three factors:

• The retail expertise we have accumulated over the years;
• Aggressive and highly targeted marketing;
• The trust relationship we have managed to build up with our franchisees.

Q: Would you say that the OBC brand’s success stems from your decision to expand through franchising?
A: There is no doubt in my mind that our franchisees play a key role in our brand’s success story but remember, franchising is a two-way street.

• We focus on a clearly defined target market, namely LSM 3 to 6, and we listen carefully to what consumers in this bracket want. This helps us to keep our product offering relevant. Most importantly, it generates sales for our franchisees.

• We position our stores are where our customers are. They find us near taxi ranks, township shopping centres and other locations with high foot count of the correct demographics.

• We work with our suppliers to create win-win outcomes. This gives us access to bulk deals. Part of the resulting savings are passed on to our franchisees.

• Most of our stores are owned by franchisees. This is important because it provides our customers with the level of personalised service owner-operators are best equipped to deliver.

• We choose the right people as franchisees and help them to select good sites for their stores.

• Our franchisees enjoy extensive initial and ongoing support covering all aspects of operations.

• We listen carefully to our franchisees to find out how we can assist them to operate better, more profitable, businesses. Training, motivation and coaching play major roles in our organisation.

Passion for franchising

Q: Sounds like your day job keeps you more than busy yet you are also the chairman of FASA. Why do you do it?
A: Franchising has been good to us, and I believe in giving back to the sector. I also believe that franchising has the capacity to make a significant contribution towards the establishment of sustainable small businesses and job creation.

My engagement with FASA is an attempt to help develop the concept further. I served on FASA’s EXCO for several years and have chaired the organisation for the past two. My second term ended on the 1st of March. Looking back, I would like to believe that we have made some progress during my term in office.

My role as chairman of FASA has put me in touch with all walks of life. Talking with them has made me realise that the concept of franchising continues to be widely misunderstood. It became clear to me that there is an ongoing need for education and information.
That’s why I take great comfort from the fact that my successor as chair of FASA, Akhona Qengqe, Director of Transformation, Diversity and Inclusion at KFC, and her colleagues on FASA’s Exco, will continue with efforts to get the message across. As immediate past chair, I will continue to support their initiatives to the best of my ability.

Looking back once more, I am especially proud of the formation of the FASA/PSA Supplier Forum. It puts emerging entrepreneurs in touch with franchisors and their purchasing teams. The establishment of the Food Franchising Forum under FASA’s umbrella is another milestone. We have also succeeded in either creating or further cementing strategic relationships with various quasi-government bodies including the Consumer Goods Council, Proudly South African and BUSA. These linkages enable us to bring the franchise sector’s concerns to the attention of government.

Q: Speaking of FASA, I believe this organisation will be celebrating its 40th birthday later this year?
A: You are absolutely right and I can say with confidence that we are well positioned to go from strength to strength over the next decade. Our birthday celebrations are expected to coincide with the 2019 heat of the Awards for Excellence in Franchising. The event is still in the planning phase, all I can say at this stage is that it will be a glittering affair.

Tony Da Fonseca, it has been an absolute pleasure to speak to you once again. You serve as an inspiration to our readers and we thank you for that.

We advise readers wishing to find out more about the award-winning OBC Chicken and Meat franchise opportunity to visit the group’s website – www.obcgroup.co.za. Alternatively, contact OBC’s business development manager Robbie Capazorio by writing to robbie@obcgroup.co.za.