HOUSE VIEW

Finweek English Edition - - INVESTMENT -

LO­CA­TION IN­TE­GRAL TO FRANCHISING:

A fran­chise’s lo­ca­tion has a great im­pact on the num­ber of cus­tomers a busi­ness reaches and also has a re­cip­ro­cal ef­fect on the busi­ness’s per­for­mance. FNB Busi­ness Bank­ing Franchising head, Morne Cronje, says that open­ing and op­er­at­ing a fran­chise is costly and needs in­dus­try re­search and knowl­edge. “Re­search on the best lo­ca­tion, cou­pled with thor­ough com­peti­tor anal­y­sis could help po­ten­tial fran­chisors de­ter­mine the suc­cess of their fran­chise,” says Cronje. Franchising gi­ant, McDon­ald’s, which has 185 restau­rants across the coun­try, en­sures that po­ten­tial fran­chisees po­si­tion their stores ad­e­quately, in or­der to gen­er­ate traf­fic to their stores. McDon­ald’s South Africa De­vel­op­ment Di­rec­tor, Wilma Lom­bard-Ma­ree, says that in places like shop­ping malls, which gen­er­ate much cus­tomer traf­fic, the McDon­ald’s brand in­flu­ences the mi­cro lo­ca­tion as best as it can to be­come more vis­i­ble and ac­ces­si­ble to cus­tomers. “It is piv­otal to un­der­stand the de­mo­graph­ics of the area and cus­tomer base as well as ask­ing ques­tions about an­chor clients and com­peti­tors. Where a new lo­ca­tion is of­fered, sales are un­known and merely an es­ti­mate,” says Lom­bard-Ma­ree.

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