We have had a fantastic week in the field onboarding a new corporate client. Our main focus this week was to attach various assets from businesses ranging from restaurants and logistics companies.
Our team visited 3 provinces in one week and learned so much in the process.
One point that had me thinking is that of the retail property sector. Certain structures in our government are working tirelessly to create opportunities for young entrepreneurs to participate in growing our country’s economy. One of the more familiar routes is to support entrepreneurs entering into the franchising business.
Franching is viewed by most as a winnig formula because the businesses are already tried, tested and most importantly bankable. Based on this many people have ventured into this sector with dreams of success and long term prosperity.
Few have succeeded and some have not been so lucky as we saw during our travels this past week.
One common thread amongst all the businesses we have interacted with is that of steep rental rates required in commercial property spaces. This seems to be a major stumbling block and reason for many businesses failing within this sector.
Digging a little deeper into the sector we learn that anchor tenants such as your large retail chains (Spar, Checkers, Pick n Pays) are often offered preferential rates when it comes to rental rates, but the smaller shops are the ones that are required to foot the ‘premium’ bill.
This has inspired us to engagee our retail property giants through platforms such as the South African Institute of Black Property Professionals to find out how we can do things differently and give these business a real chance at survival and contributing to the development of our economic infrastructure.
Please could you tell us whether you have ever entered into the franchising business and what your current situation is…your successes and failures and what you would have done differently.
Let us use this platform to learn from and empower each other.