Quasi-franchising – the future of franchising?
Take a fully-fledged business concept, together with an entrepreneur’s creativity and fresh ideas, and you get ‘quasi-franchising’.
Although this is not a new concept, it is still gaining traction in South Africa and has a lot of potential for the industry, says Christo Botes of Business Partners Limited – a risk company that invests in SMEs in South Africa.
While most franchises do not let franchisees tailor the business model at all, ‘quasi-franchising’ gives franchisees control of the franchise’s name, image, look and feel of the business, while also allowing them the freedom to customise what they want according to their own creativity and intended market.
This means the behind-the-scenes tasks such as hiring and training of staff, management style and other corporate and operating duties are all left to the franchisor.
But why would franchises let their business model be altered so significantly when the regular way is already working fine? And why would interested franchisees take a risk in investing in someone else’s business if they they are looking for entrepreneurial freedom?
According to Botes, this approach works for all parties, the franchisor, the franchisee and the consumer.
“Entrepreneurs who seek to get into quasi-franchising do so because they need a business model that works, but also want the
creative freedom to experiment”
Botes says ‘quasi-franchising’ represents an opportunity for franchise brands to tap into Generation Z consumer market (those born in mid or late 1990s) which is often unsatisfied with franchises and their standardised service, and are more interested in niche products like craft beer bars and boutique hotels.
“Entrepreneurs will get to make the business their own, and franchisors still make money from it with loyalties, rent, training methods and other operational costs required,” he says.
For example, a hotel owner who paid a franchise to handle staffing, would get their staff to be trained in the hotel’s management style, their methods of service and other workplace standards, although the hotel itself wouldn’t have the franchise’s logo or look.
The benefits for the entrepreneurs is the freedom of being able to add their own unique stamp, with the security of a tried-and-tested product and works in terms of profit and services. “The franchisees, in effect, are paying to put their own brand over an existing, well-oiled operation,”
Quasi-franchising at work
Thorny Bush Collection of lodges displayed on their website.
An example of a successful business that has adopting this concept is a chain of game lodges in South Africa called the Thorny Bush Lodge Collection. The 5 star game lodge group has a string of 10 lodges (including Monwana Game Lodge, Shumbalala Lodge and Waterbuck Lodge) all located in the Greater Kruger National Park area.
While each of the lodges share an operations and management structures, they each have their own unique decor, offer different activities, as well as differing rates and specials.