BELONGING IS BETTER BUSINESS
Here’s why…
Legacy and unity
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We’ve been representing the retail motor industry for more than 100 years.
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With more than 8 000-member businesses, our unity is our strength.
Your voice
RMI represents the industry at:
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Centralised wage negotiations.
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Various MIBCO and Industry-related Boards and committee structures.
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Various South African Bureau of Standards (SABS)
committees and working groups.
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The National Regulator for Compulsory Specifications (NRCS), defending our
industry when compulsory specifications and standards are compromised.
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The Moto Health Care Fund, Industry Provident Funds
and the Sick, Accident and Maternity Pay Fund.
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Meetings hosted by reputable organisations recognised by government, big
business, consumers and relevant stakeholders like Business Unity SA (BUSA).
Supports your business
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Professional industrial relations advice ensuring procedural
and substantive fairness when disciplining staff.
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Chairing of disciplinary hearings and AUTOMATIC
entry at the CCMA, DRC and Labour Court.
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Exceptional CPA support at the National Consumer Commission (NCC)
and the Motor Industry Ombudsman of South Africa (MIOSA).
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Facilitation of a business-to-business complaint where both parties are
RMI members, with a complaint resolution rate in excess of 95%.
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Training needs and representation via merSETA and W&RSETA.
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Industry-specific products like RMI4BEE, RMI4LAW and RMI4OHS.
Keeps you in the know
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Industry labour relations seminars.
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Automobil magazine and weekly web letters.
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Commenting on industry topics in the media, and participating
in and hosting numerous conventions and shows.
s the Franchise Association of South Afri-
ca, in association with Absa, embarks on a
definitive industry survey after a break of
the past four gruelling years – that included the
debilitating effects of the COVID-19 lockdown
regulations, flooding and the July 2021 riots and
looting, political turmoil and economic strain – it
hopes to get a clear indication of the challenges
franchisors and franchisees faced and more im-
portantly what lies ahead for the future of this
important sector.
The 2019 FASA Franchise Survey showed that
whilst the industry was taking strain due to the
slowing economy, franchising contributed 13.9%
to the country’s GDP (R734 billion) through its
813 franchise systems and its 47 923 outlets and
employing, directly and indirectly, almost 500 000
people. It showed a solid performance despite
tough economic conditions and was testament to
the tenacity of this unique business format.
There is no question that businesses across
the board, big and small, including franchises
were hit hard by the snowballing effect started
by COVID-19 and affected by so many other so-
cio-political and economic factors since then. By
and large, the franchise sector has, through these
trying times and in line with global trends, relied
on the strength of the collective made up of fran-
chisors and franchisees – all tackling problems
and finding solutions together.
“FASA has, for the past 44 years, overseen the
establishment and growth of this vital sector. We
cannot allow growth in our sector to regress or
slow down as the future of South Africa relies on
a vibrant sector like ours that encourages entre-
preneurship, plays a role in skills transfer and in
job creation. Now, more than ever, franchising
needs to hold its own, take the road to recovery
and continue to play the important role it does
in the country’s economy,” says Fred Makgato,
FASA’s CEO.
Thanks to sponsorship from Absa and the
commitment of its franchise division, FASA has
commissioned Research EQ to conduct the sur-
vey under the capable direction of Margaret Con-
stantaras, Head: Quantitative Research & Gover-
nance who has a particular interest in franchising
as she is completing her PhD in this field.
“Since our involvement in FASA’s surveys of
the sector since 2014, we will be devoting a good
portion of the survey on how franchisors and
franchisees coped during what was probably the
most trying four years in business and identifying
their strengths and weaknesses.”
FASA’s Franchise Surveys will be conducted
from May to July this year with franchisors and
franchisees across the fourteen different busi-
ness sectors participating in one-on-one and
online interviews. The results of the surveys will
form part of FASA’s event calendar for the second
half of 2023 – which includes a Franchise Expo in
August and the FASA Conference in October. Re-
search EQ invites all franchisors and franchisees,
whether FASA members or not, to contact them
if they would like to participate in the survey.
Please email Margaret for more information.
he South African economy recorded zero growth for the first quar-
ter of 2023, following a fourth quarter of negative growth in 2022.
The country is pointing towards a technical recession (defined as two
consecutive negative quarters of growth), despite Finance Minister Enoch
Gondwana ruling out the possibility just a few weeks ago.
The FNB/BER consumer confidence index (CCI) also fell to -23 points in
Q1 2023 (down from -8 in Q4 2022), indicating increasing financial strain
among consumers.
Yet as the economic climate sees consumers becoming more price con-
scious and thrifty, businesses in South Africa are facing unprecedented op-
erational costs, resulting in price hikes being passed on to consumers.
According to Chief Operating Officer, Craig Pitchers, at leading national
courier service The Courier Guy, South African businesses find themselves in
a uniquely challenging position.
To build stronger and more resilient companies that can withstand the
economic storm, Pitchers recommends that businesses focus on what he
calls “The 3 Cs of building a recession-ready business”.
Costs
Pitchers believes there are many creative ways to lower operational costs,
but says it is critical that cost-cutting does not negatively affect the quality
of a business’ final product or service delivery.
He suggests outsourcing certain non-core activities to reduce overhead
costs and freeing up internal resources to focus on core business activities.
Customers
With studies showing that it is between five and seven times more expen-
sive to acquire a new customer than keep an existing one, another good way
to get recession-ready is to ensure that business strategies place a heavy
weighting on client retention.
To keep clients happy and satisfied during a recession, Pitchers says
companies must prioritise excellent customer service and a personalised
experience.
Collaboration
Another robust recession-proof strategy is for businesses to be agile and
adaptable, so that they can pivot their business strategy, if need be, by shift-
ing focus to a new product or service, or targeting a new audience or market.
For Pitchers, this goes hand in hand with the final ‘C’ for collaboration,
which involves identifying suppliers in your industry or related industries
that can help you to stay up to date with market trends and identify new
opportunities.
The power of reliable, loyal and like-minded partnerships in times of eco-
nomic crises should never be underestimated. By depending on each other,
businesses can provide a more comprehensive solution and increase the
value proposition of their services.
“With the economic sentiment suggesting a muted national outlook for
the year ahead, it more important than ever to be creative and open to new
ideas that can help your business survive and thrive,” concludes Pitchers.
www.automobil.co.za
June 2023
Building a recession-ready business
How has franchising
fared in South Africa
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