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IFE 2012 opens with call for SMEs to be taken seriously

At the official opening of the International Franchise Expo this morning, 17 May 2012, Chairman of the Franchise Association of South Africa Jan Davel called on government and business to recognize the contribution that franchising makes to the economy.
"Franchising, which contributes almost 12%* to the country's GDP does not get enough credit for its contribution to the economy. It surpassed both agriculture and manufacturing sectors and, despite its resilience in having weathered the recession storm, does not get the recognition it deserves," said Marcel de Klerk, Head of Business Banking at ABSA, who sponsored the opening event at IFE.

"When we analyse our performance over the past few years amidst difficult trading conditions in various sectors, franchising comes up as the one sector that stood solid and showed remarkable resilience. We renew our commitment to servicing the franchising sector as it provides all the elements of a viable business - good governance, ethics, entrepreneurship, training and job creation. Credit must be given to the work that the Franchise Association of South Africa has done over the past 33 years in steering the sector to where it is today."

Job creation

Guest speaker at the launch of IFE 2012, Chris Hart, Chief Strategist at Investment Solutions, took issue with the government's pledge to create 5 million jobs by 2020, asking "If 5 million jobs are created in 10 years, what about the other 10 million people without jobs?" Talking about job creation is not creating jobs, he maintains.

"If you want jobs you need employers and the only known way to create jobs on the scale we need is through small businesses. In fact, 2 - 3 million new businesses are needed to create those 15 million jobs the country so desperately needs." The problem, according to Hart, is that government is not making it easy for small businesses to do business and believes that it is impossible for a small business to stay fully within the law and be solvent. With so many regulations hampering growth - from Labour laws, Fica laws, Nersa, the Credit Act, CPA - all regulations completely inappropriate to stimulating business, it is becoming increasingly difficult for businesses to survive let alone encourage new ones to start up.

With the rest of the first world heading for another recession, South Africa, by comparison is looking pretty solid, experiencing a bull market with many of its fundamentals rock solid. The problem, says Hart, is that our economy is not geared to creating jobs. "Corporates, known to always want to do more with less in order to be more efficient, can't be relied on to create the jobs needed. It is the small businessmen who, if they are doing well and have an enabling environment, will be the ones to employ more people."

Despite the doom and gloom from abroad and although still facing challenges, Africa's time has come. Concluding the launch to IFE 2012 Jan Davel paraphrased Warren Buffet who said, "because of seeds sown by entrepreneurs, some people will sit in the shade."

The International Franchise Expo, which runs from today until Saturday 19 May from 10am - 6pm (entrance fee R50 per person), showcases over 80 franchise and business opportunities covering a wide range of business sectors. According to Exhibition Manager Nishi Naicker, this year has seen the highest number of new franchise concepts and quite a few international brands keen to break into the South African and African franchise market.

*Statistics on franchising from The Franchise Factor by Bendeta Gordon of Franchize Directions.

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