Plumbing Africa September 2020 | Page 20

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