The Foreign Commercial Service of the U.S. Embassy in Ghana, in collaboration with AmCham Ghana and the Africa Franchise Centre (AFC) Lagos, on Tuesday, August 25, 2020, hosted a webinar on Financing the Franchising Sector. The event was a workshop to educate and expose players in the finance industry to the concept of franchise financing.
The event provided an understanding of how the franchising sector works, becoming aware of how to unlock it, as well as identify some reasons why people are hesitant to finance franchises.
The presenter, Emma Esinnah, Country Director, Curves International, Nigeria, took participants through the transaction dynamics to help make informed decisions when appraising proposals.
The global franchising industry is a $3 trillion (estimated) industry with products and services in over 300 business categories.
Emma Esinnah also highlighted some of the benefits franchising, such as risk avoidance associated with start-ups, reduction in start-ups cost and time, and proven products, services, and operational methods. Mr. Asinnah believes these benefits make franchising a strategy for business growth which benefits the economy and the banks.
He also presented a case study of South Africa’s franchising sector, which according to a 2019 report, by the Franchising Association of South Africa (FASA) is over 15.7% to GDP, and employs over 343,000 people.
Mr. Asinnah noted that the success of a franchise depends on its system and encouraged bankers and stakeholders to take a keen interest in finding out the strengths and limits of a franchise’s operational system. He also advised that bankers praise the franchise and not the franchisee, as findings revealed people who mostly succeed with franchises have no prior business experience.
According to Mr. Asinnah, the banking sector has played an instrumental role in the success story of the South African franchising industry by creating special products and services specifically tailored to suit the sector. He also dismissed the assertion that the influx of foreign franchises stifles local businesses, he said instead when managed well, franchising can help grow local businesses to international standards.
Present at the webinar was the AmCham Ghana Executive Secretary, Simon Majie, who delivered the closing remarks and acknowledged the importance of franchising to the development of local businesses.
Also present were Hannah Kamenetsky, Senior Commercial Officer, U.S. Embassy Ghana, and Paul Arinze, President at Pedestal Africa Ltd.