Franchising drives retail forecourt sales
Convenience shopping is one of the drivers spurring the franchising boom in which revenue from nearly 26 000 outlets soared 48% to R188 billion from R127 billion in the past two years, according to a survey by Johannesburg-based Franchize Directions. Fuel retailers' turnover has grown 149% and contributed almost half of the franchise sector's total revenue in the past two years.
Petroleum giant BP's new age convenience shopping, with its ultra-modern BP Express shops, is one of the star performers in the sector, with more than 68 of its own Wild Bean Café food and coffee outlets franchised nationally.
Research by AC Nielsen's Customised Research Department shows that, in the past year, 30% of the 2500 respondents used forecourt stores at least once a week. Its report found that the BP Express shop, of which there are over 170 countrywide, is the most recognised forecourt convenience store in SA.
Richard King, BP's retail operations manager, says time-strapped consumers responded well to the 24-hour convenience of forecourt shopping, and franchising was the best way to keep up with demand to grow BP's retail footprint.
"It is no surprise that franchising is such a fast growing business trend, because most people find it expedient to build a business with the assistance of an established organisation. Franchisees enjoy countless support services including training, trademark branding, corporate advertising and bulk purchasing prices.
"The forecourt convenience offer was stimulated by consumer demand and service stations are ideally positioned to meet their time constraints which allowed BP to expand its role beyond petroleum products in people's lives," says King.
As demand has grown BP has become adept at the principles of retailing.
"We've created a modern, energetic, inviting look and feel in our stores. We have wide open aisles that are easy to walk around and a customer-friendly layout that promotes goods and makes it easy for shoppers to locate and reach them," says King.
One of the biggest draw cards to franchising may be the lack of operational headache that existing blueprints and systems brings, cancelling out the need for a new business owner to develop them from scratch, but another often overlooked benefit is the power and guidance of an existing brand.
Many of the world's most valuable entities are brands that have been developed over decades, centuries even. Associated with stability, often with market leadership, and almost always with proven products, they signal a uniform offering and standard of service.
According to King, brands provide a framework in which franchisees are guided.
"Most franchisors are protective, stipulating stringent boundaries governing conduct of business so the brand is protected for other franchisees.
"In protecting the brand, franchisors protect standards wherever they operate and so even in an implied manner, they help the business owner protect his livelihood," concludes King.