Franchising as a Community and Social Development Tool

We were blessed with the opportunity to play a significant role in the creative initiative of U.S. Agency for International Development (USAID) in the beautiful country of South Africa to use franchising as a community development tool. Anticipating and following Mandela’s release from prison in 1990, the US government had a pivotal role in the relatively peaceful yet monumental transition that took place in South Africa in those years. One of the many programs the US government funded was designed to bring US franchise business opportunities to the traditionally disenfranchised people of South Africa.  We were awarded a contract to organize the first International Franchise Conference in South Africa.

The conference took place in early 1994 and the event was very successful; however, shortly after our arrival to South Africa late 1993 we realized the immediate need to create indigenous franchise opportunities. Within the first three months of our stay in Johannesburg we created the first black-owned franchise  in South Africa, Alex Hair, owned by Alex Moloquane.

Our wonderful experiences are simply too many to share in this blog but of all of them one of the most valuable was to witness and be a part of the power of franchising as a community development tool. As the country was going through this incredible transformation, traditional businesses understood the need and the potential of serving a market that had been forgotten for so long. They wanted to go into the townships and open locations. However, these locations had to be owned by people who lived in the townships and although many of these people had money to invest or had access to it, most of them did not have the skills to own and operate these businesses. Franchising offered the perfect answer since the franchisor provides the tools, the education and the skill building.

We worked with companies creating the systems and recording them in creative ways to be accessible to people who could not read; we went to the townships and worked there opening locations. Our work was very hands on because we had the expertise that was lacking as well as the acceptance of all sides. The work went well beyond the preparation of documents and recommendations and guidance to the franchise companies we were creating. Bob was directly involved in many negotiations with town councils and choosing potential franchise owners. I was primarily focused on the selection of equipment that could work in the townships amidst dust, heat, lack of electricity and severe electric surges; additionally I was responsible for the training of franchisees and their staff and working at the stores during opening.

One of the many companies we worked with using franchising as a community development tool was Clover International a huge agricultural and dairy coop. They wanted to get their many products to the townships and were prepared to create the franchise opportunity and fund not only its development but the future initial franchise fees to qualified candidates. The project manager became a dear friend. Werner Mueller was one committed person that taught us a lot about South Africa.

I remember the day we opened the first LAPA Foods store in the township of Tembisa about 20 minutes north east of Johannesburg. LAPA Foods was a “convinence” store in a shipping container that sold chickens, milk, grains, corn meal and other essential food staples of the traditional diet.  Prior to opening this location people of the townships had to go to Johannesburg to buy these supplies at reasonable prices. We ran out of chickens the first hour that we opened the store for the first two weeks. The more chickens we brought in, the more we sold! Amazing.

The pride of the community, of the owners and of the staff is just something I will never forget.  The franchise owner felt he could feed his family and he now occupied an important place in the community. He was learning to be a business owner and to manage the business. The employees were learning basic business skills and were employed for the first time in their lives! One was 23 and the other was 27  and neither had ever been empoloyed before. Training them was a wonderful learning experience for me. They were both smart people who picked up quickly yet they simply had no experience and many of what to most of us is “common sense”  they simply had no ability to comprehend. I can only hope that I was able to give to these people something of value, as they gave so much to me. They taught me invaluable lessons about creative training techniques as well as understading the psychology of people going through change.

The community benefited greatly from having access to basic food staples at reasonable prices without having to travel big distances. The jobs created although not in great number contributed economic well being to the community. But, looking back, the most important by-product of this project was the hope element. Things were changing in South Africa, opportunities were opening up to those who never had them before, and having that bright yellow container in their community was a source for hope.