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 Franchising is a form of business undertaking where the franchisor (proprietor) of a product or service grants exclusive rights to the franchisee (client) to sell or distribute his/her company products/services in a particular area under the same brand/name where operational procedures are standard.
This form of businesss has been in existence in Botswana for a very long time and it has contributed significantly to the growth of the country’s economy.
Observers say franchising in Botswana where local people lack entrepreneurial acumen and skills has helped create business owners who are not the initiators of the business ideas and has also created a lot of employment for semi-skilled and unskilled citizens.
Business pundits also say even though this form of enterprise has had a positive contribution to the country's emerging small, micro and medium business sector there is no piece of legislation or authority which regulates its activities for mutual benefit of the stakeholders (government, franchisor and franchisee).
Franchises which many small, micro and medium businesses run in this country are imported brands mostly from South Africa.
However, in South Africa these franchises are regulated by the Franchising Association of South Africa (FASA). This means that for any person to franchise his/her business it must conform to FASA set standards. These standards though not exhaustive may include company turnover, duration of operation, royalties to be paid by the franchisee and marketing levy. FASA also mediates disputes between franchisor and franchisee as they arise.
Linda Holdings, trading as Fones 4 U, a 100 percent citizen-owned company, was the first business to franchise their brand name. Fones 4 U franchise includes a call centre, distribution of highly ranked public phones, PABXs, billing systems, cell phones, IT consumables and accessories. When contacted to shed light on the hiccups they encountered in franchising their business, Jack Kardoulous Fones 4 U Managing Director had this to say: "When we rolled out our franchide in 2003 we contacted the Ministry of Trade and Industry to help us abide by any Act regarding franchising but we found that there was none at the time.
There was no body or regulation which facilitated franchising in Botswana then but I don't know now. Things might have changed.”
Another local company which wanted to franchise their business is the leading retail giants, Choppies. The chain supermarket announced in the local media in 2007 for potential franchisors to buy their brand name which has managed to attract a lot of business goodwill in a short space of time since its inception.
A top Choppies official Narrayan Kumar said that in Botswana they have covered most of the lucrative business spots, hence they did not receive any franchising requests from locals. When asked if they have franchised their flagship brand in South Africa he intimated that they have entered into smart partnerships with local people where they have opened a store. He said local people make minority shareholders and they remain majority shareholders hence business decisions still rest with them.
A leading SMME business consultant attached with the Business Place, Mr Jeremiah Mmusi said that the lack of any regulatory body facilitating franchising is a hindrance to SMMEs growth.
He said that as things stand business success in franchising to any franchisee depends solely on the goodwill of the franchisor and this glaring omission leaves SMMEs at the mercy of powerful cartels and multinationals. He said government must fast track many business regulatory policies and amend those that are redundant in this era of globalisation.
He said he does not have empirical evidence as to how many franchisors in Botswana have become victims of manipulation by franchisors even though he believes if indeed it exists it is negligible. ''Even though the incidences of franchisor manipulations seem like a conspiracy theory for now the status quo should not be entertained because SMMEs in Botswana need protectionist intervention from government,” he said
A top Local Enterprise Authourity (LEA) official said even though there is no regulatory body or piece of legislation keeping an eye on franchising there are other peices of legislation which safeguard the interests of SMMEs and businesses in general, citing the Copyright and Neighbouring Act which the government passed in 2007.
The then senior industrial officer in the Ministry of Trade and Industry Mmoloki Nono Selema presenting a paper on 'Franchising within the Small and Medium Enterprises in Botswana" in Tunis, Tunisia, on December 2004 said: '' Government will use the Competition Policy to monitor the operations of franchising businesses in Botswana even though the policy is still being developed.
The envisaged Competition Commission, it seems, would be the panacea to the syndrome of diseases Botswana businesses grapple with. The non-existence of a franchising authourity and other relevant business regulatory bodies in Botswana is seen by many business commentators as government's lack of political will to expedite and fast track citizen economic empowerment.BY KEITERILE PHINEAS MALETSI
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