Famous Brands urges assessing franchise transformation across the entire value chain
In South Africa, Famous Brands group executives Rajesh Jivani and Jabu Mahange called for assessing the transformation of the franchising sector not only by the number of outlets owned by entrepreneurs who have historically had limited economic opportunities. In their view, the analysis should cover the entire value chain: employees, suppliers, manufacturers, farmers, logistics and service companies, training partners, as well as the franchisor.
In an opinion piece for TimesLIVE, the authors noted that franchise ownership is an important indicator, but it does not reflect all the economic activity of a franchise network. They believe transformation should expand access to economic opportunities through employment, training, procurement and enterprise development.
Training and employment
Jivani, who serves as the group executive for transformation and ESG, and Mahange, the chief people officer, wrote that in 2018 Famous Brands did not meet the requirements of the broad-based BEE system. According to them, the group subsequently achieved B-BBEE Level 1 through work in employment equity, skills development, procurement, as well as enterprise and supplier development.
Under the YES programme, which provides unemployed South African youth with practical work experience, 173 of 300 participants were employed at 151 Famous Brands franchise restaurants during the latest reporting period. The programme reported an 87.86% transition rate of participants into full employment.
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Supplier development
The authors also cited the example of Famous Brands’ owner-driver programme. Under it, Black entrepreneurs run delivery businesses in the group’s distribution network. The programme currently includes 27 owner-drivers and supports 60 direct jobs.
According to the group executives, small businesses often need technical expertise, mentorship, financing and help meeting requirements for quality, compliance with standards, production capacity and reliability in order to work with franchise networks. They stressed that a transformed supplier must at the same time remain competitive in quality, product availability, service and price.
Jivani and Mahange added that a franchisor must set such standards in its own board of directors, workforce and supply chain before expecting the entire network to comply with them.
