BUSINESS AND TRAINING
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recruit, train and support its franchisees. In a challenging economy
this slows right down and affects the franchise’s growth.”
• Reduce the day-to-day involvement: “The franchisor will not be
involved in the day-to-day operations of each franchised outlet.
However, the franchisee does report to the franchisor on a monthly
basis. There are set reports used to set certain financial indicators
to determine the health of a franchise.”
• Increasing brand equity: “Leveraging off the assets of franchisees
helps franchisors grow its market share and brand equity more
quickly and effectively. The franchisees are all brand ambassadors.”
• Advertising: “The franchisor will reach the target customer more
effectively through co-operative advertising and promotion initiatives.”
• Customer loyalty: “Franchisors uses the power of franchising as a
system to build customer loyalty and to attract more customers and
to keep them,” says Van Wyk.
He also lists some disadvantages of franchising:
• Developing a franchise network can be expensive, in terms of
management time and initial capital outlay.
• Your investment cannot be recovered until franchisees are
appointed and you start to receive fees from them.
• As your franchisees are independent businesspeople, they might
sometimes disregard their obligations related to the franchise system.
As to whether franchising would assist the plumbing profession by
offering proven systems, placing a value on their business and succession
planning, Van Wyk says, “Franchising would most definitely offer all this to
the plumbing professional. For an existing franchise like ourselves it will
not work as we would be competing against our existing plumber customer
base. You can imagine what that would do to our business model, but it
can work. The challenge is to deliver a consistent level of service to the
consumers and to find qualified individuals who are experts in their field
but who are also business minded. Often many of these people have the
technical expertise but lack the right business acumen to run a business.
There is also a massive informal market currently being serviced by nonqualified
people. This is very dangerous and could be very costly to the
end user. However, this puts unnecessary strain on the formal market and
qualified professional. Again, this is all due to a lack of proper policing.”
On Tap statistics:
• Number of outlets: 26
• Number of staff: +/-280
• Founded in 1990: 30 years old
• Started in Pietermaritzburg PA
“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.”
September 2020 Volume 26 I Number 07
www.plumbingafrica.co.za