18 BUSINESS AND TRAINING
Does franchising work in
plumbing? Part 2: The retail sector
By
Eamonn Ryan
Franchising would appear to be an ideal model for the
plumbing profession in South Africa – yet outside of retail, it
struggles. This is the second of a two-part article.
On Tap managing director, Johan van Wyk, says,
“We classify ourselves as a franchise who focuses
on the selling of specialised plumbing products
to the end users and to our plumbers. There are
other franchise entities like CTM, Build-it and Mica
who also sell plumbing products but more under
the general hardware banner. We’re a specialised
plumbing merchant predominately focusing on
specialised services and products. There are many
independent merchants who also play in the arena
but not under a corporate banner.
“The plumbing business has become a cut-throat business
with many smaller retailers cutting price and selling noncertified
products. Many of the plumbing products sold in
South Africa, at a minimum, must conform to the SANS
standards. The end users are not really informed in this
regard and because it’s poorly policed there are many
products sold that do not conform to a standard. These
products are often sold on price only. This places a huge
financial strain on the ethical and compliant supplier and
retailer,” says Van Wyk.
“National standards are there to protect the supply chain and
end users alike, but it is not enforced by the authorities. As
an ethical retailer, we must self-police to ensure that our end
users are protected against buying non-certified and noncompliant
products. This is a major problem and requires
high level intervention. We will endeavour to educate the
consumer on the importance of the standard so that they are
not led by price only.”
There are other franchise businesses that sell plumbing,
often under the general hardware banner or as a department
within a greater tile and plumbing business. “Plumbing
is a highly technical area and we offer the consumer the
necessary technical expertise and advice when selling
our range of products to them. This starts by sourcing the
right suppliers who manufacture products to the required
standard. Many of the big-box retailers offer plumbing as a
DIY option in their offering which does not require technical
expertise. Our business was founded on the plumber and to
offer them ‘Fast, Friendly and Efficient’ service. As time is
money, we want to turn our plumbers around as quickly as
possible at store level to allow them more time on the tools
and thus earning more money.”
Eamonn Ryan
The retail component of the plumbing industry is the most franchised sector.
Van Wyk lists some of the benefits of franchising as:
• Capital investment: “The franchisor’s capital
requirements will be lower because the franchisees
provide the capital to open each franchised outlet,
thereby not putting strain on reserves. However,
it is important for the franchisor to be close to its
franchisees’ financial situation to ensure success
for the franchisee, supply partners and to avoid
reputational damage.”
• Motivated and effective management: “The local
management of each franchised unit will be highly
motivated and very effective. As the franchise unit is
their own, it will usually lead to higher sales and profit
levels.”
• Speed and growth: “The franchise network can grow as
fast as the franchisor can develop its infrastructure to
www.plumbingafrica.co.za @plumbingonline @plumbingonline @PlumbingAfricaOnline September 2020 Volume 26 I Number 07