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New chairman at FASA

Ian Jacobsberg, partner at Hogan Lovells (South Africa) is the new chairman of the Franchise Association of South Africa (FASA), taking over from Derek Smith, MD of Hot Dog Café.
Ian Jacobsberg, the new FASA chairman
At its 35th AGM, Smith acknowledged that the past five years have been challenging for franchising, but they fared better than independent businesses, a tribute to their resilience. The industry continues to contribute close to 10% to the country's GDP.

Franchise survey

In 2013, for the first time, the association conducted its own survey of the industry, sponsored by Sanlam. The results reflected a thriving and growing industry with 668 franchised systems, just over 30 000 franchise outlets and 17 franchise business sectors in the 2012 financial year generating a turnover of R302 billion and employing more than 300 000 people. An estimated 3 700 new franchise businesses were added to the South African economy, where 90% of franchises are developed locally.

Grants allocated

The commitment of FASA to play a role in entrepreneurship, skills development and job creation saw a concerted effort to convince government of the contribution that franchising can make to the creation of sustainable employment and the creation of new business owners within the youth of the country. This resulted in two members becoming recipients of grants from the Jobs Fund initiative.
  • The first grant of R17 million went to Hot Dog Cafe to create 372 new jobs in conjunction with matching funding of R18.6 million from Masisizane and the Public Investment Corporation totalling R35 million
  • The second was a grant to Business Partners, in partnership with SA Franchise Warehouse, of R46 million. The matching funding from Business Partners amounts to R52 million creating a project fund of R108 million to create over 700 jobs
The Jobs Fund has recognised the role that FASA plays in the industry and is presently considering the viability of an industry application from FASA to participate in a much larger fund to apply the grants to FASA members to create new jobs in 2014. Presentations and submissions with respect to the contribution that franchising can make to economic growth were made to both the State President's office and the Minister of Economic Development.

New chair

Jacobsberg is a partner in the commercial department of Hogan Lovells (South Africa) and head of its competition and regulatory practice group. His expertise includes giving advice on corporate and commercial issues, contractual matters relating to franchising, advertising and sponsorship, and competition matters and the protection and licensing of intellectual property and branding. He acts for numerous South African and international household names in the franchising industry. He has served on FASA's council and Exco for many years. He is also a commissioner of the Small Claims Court.

His appointment comes at a time when FASA is breaking new ground in becoming the recognised adjudicative body for its sector. The Executive of FASA worked closely with the authors of the Consumer Protection Act to ensure that franchising was covered within the ambit of the CPA.

"The inclusion of provisions in the CPA specific to franchising that make compliance a requirement not only for FASA members, but for all who operate as franchise entities, is a step in the right direction. However, in order to ensure that the industry is fully regulated and operated in an ethical and transparent manner and in accordance with the CPA, FASA will be submitting an Industry Code for the franchise industry to the dti, along with an application to become the accredited Ombud for the industry.

"Once accepted, this will empower FASA to determine any dispute in the industry arising from a contravention of the CPA or the Industry Code - whether the franchisor/franchisee is a member of FASA or not. This will be a step forward in raising ethical standards, in the wider franchising industry in accordance with those to which FASA's members have always subscribed, helping stakeholders in the industry to resolve complaints and consolidating the reputation of the industry at large."

Other targets

Other major targets for 2014 will include the process of developing professional designations and programmes to achieve accreditation by SAQA as a professional body. As the oldest franchise association in Africa and a long-term member of the World Franchise Council, FASA also spearheaded the formation of a Pan African Franchise Federation that will serve to assist other African countries use the franchise business system for economic growth. To this end, the second Pan African Franchise Federation meeting will be held during FASA's annual International Franchise Expo that takes place at the Sandton Convention Centre from 10-12 April 2014.

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