Chiagozie Nwizu, the Managing Director of Franchise Business Development Services International Limited, in this interview with IKECHI NZEAKO, spoke on the state of franchising in Nigeria, and how to use it to scale and expand proven and viable brands across the country. Excerpts:
What does your FBDS do?
Franchise Business Development Services (FBDS) is the pioneer franchise consulting company in Nigeria, the country representative of World Franchise Associates (WFA) and a franchise services supplier member of International Franchise Association (IFA).
Our goal is to be the leading partner in the development and delivery of successful franchise service in our chosen markets. We work towards this by building successful and scalable business through franchising.
FBDS provides end-to-end franchise consulting services to companies seeking to expand through the franchise business model, helping them do develop a franchise programme for investors and franchisees.
FBDS services includes matching the franchise businesses with suitable investors who desire to own a business leveraging the proven and successful business models built by the franchise brands.
FBDS also supports the two categories of entrepreneurs with a range of advisory services and technology solutions. Franchise a business, local/ international companies who are already franchising and want to expand to other territories, and entrepreneurs aspiring to buy a franchise.
Why are you organising Naija Business Scale-Up?
Naija Business Scale-Up is a scheme created to scale and expand proven and viable Nigerian brands across the country, and to global markets using the globally proven and successful franchising business model.
While beneficiaries will benefit from the secrets and systems of globally most expanded businesses, they can chose to franchise their businesses out to investors or not to the result of rapid and standardized expansion is however guaranteed.
The scheme was launched to orient 500 viable Nigerian businesses and identify best 50 of them, with growing demand to expand their products and services.
The successful businesses will be helped to build systems to scale and expand locally and internationally (business optimization, standardization, manualisation and automation). Further they will be supported to exhibit to investors, and to launch their expansion or franchise out to investors with a pilot roll out.
Who are the target audience?
The programme is targeted at successful businesses with two or more locations. Businesses that have the desire to further expand the business across Nigeria and beyond due to growing demands for your products or services.
When, where is it holding?
The orientation will hold on September 5, 2019 at Oriental Hotel, Victoria Island, Lagos.
What will participants take away from the fair?
Participants will get the following benefits from the orientation: access to information about Naija Business Scale-Up scheme, how to access support from partnering organisations, testimonials from successful beneficiaries, duration etc.
They will participate in a workshop on “Building blocks to successful business scaling and expansion”; access various opportunities from other supporting organisations – funding, free technical advisory, sector-based intervention by development agencies.
They will access to a pool of ready investors seeking dealership, franchising and distributorship opportunities and access discounted franchise association membership.
What is the expected impact of Naija Business Scale-Up?
The scheme is an initiative of FBDS Nigeria in partnership with a wide network of sponsors and partners, who provided support to businesses proven to have the capacity to scale and expand within Nigeria and other countries.
The various categories of collaborating organisations are: international development agencies; funding institutions; local and foreign franchises operating in Nigeria; agencies of the government; and other SME support partners.
As a proven and viable tool for scaling social, enterprise & economic development opportunities in Nigeria, this franchise-based development scheme is expected to result in other direct and indirect growth impacts on the economy.
What is your assessment of Nigeria SME sector as a development expert, and how can franchising help?
SMEs have been facing with a lot of challenges of financing. Franchising helps because it has been proven in Nigeria, just as at other countries, that businesses operating the franchise model have the least failure rate because they are proven businesses.
This makes them attractive to fund providers who cannot risk lending to start-ups. Another way franchising helps with access to finance is that it helps a business seeking expansion to access funds at no interest from investors seeking opportunities to own a profitable and proven business.
These investors are called franchisees, which obtain a right or licence under the franchisor whose proven and successful business model they leverage to own a replicated business set up 100% at their own cost. Through this licensing, the franchisor entrepreneur who could have been having difficulty sourcing expansion funds will have access to other people’s money to expand their brands.
What should government do to create an enabling environment for the franchise industry?
My advice will be that they should get involved. First by paying attention to the numbers and fact that do not lie, about the new trends that franchising is creating in Nigeria.
These trends are how growing businesses are leveraging franchising to replicate their success and expand; how franchising is scaling and creating job opportunities; how by franchising, entrepreneurs can access single digit fund to start-up a new business; that there is ease of introduction of skills, knowledge transfer and standardization to new businesses; how the culture of independence is now gradually giving way to collaborations, leading to increasing leverage of proven successful brands built by other entrepreneurs to own new businesses
Would you say the lack of training and awareness are reasons why most Nigerians are yet to begin taking advantage of the franchise business model to own and expand their businesses?
Yes, studies conducted in Nigeria point to the fact that many Nigerians either have no idea what franchising means, or they conclude it is an idea of working for another man to build his business.
Quite agreed that there are people who are entrepreneuring and are ready to meet up and deal with the challenges of building a successful brand, but most people are better off with managing their own business under an established brand with proven business system which is what franchising is about, because it is tough to build successful business in Nigeria today.
These misconceptions fueled by lack of education and awareness resulted in the underdeveloped state of Nigeria franchise industry compared to other economies such as South Africa, where franchising contributes as much as 12.5% to the GDP.
This is why Africa Franchise Institute was established to bridge the knowledge and awareness gap.
Can you say more about this Africa Franchise Institute?
Africa Franchise Institute was established to operate high standard training programmes towards educating and certifying executives of franchise brands and entrepreneurs seeking expansion; prospective franchise investors; and service suppliers to franchise brands & expanding businesses.
Participants of AFI programmes are awarded a foreign certification by International Franchise Association (IFA) for fulfilling IFA online programmes, and an Africa Franchise Institute Certification for fulfilling in-class programmes at Enterprise Development Centre of The Pan African University.
Africa Franchise Institute also educates and certifies franchise industry regulators and service suppliers, including but not limited to franchise product managers of financial institutions, law firms offering franchise services, franchise consulting companies and government officials playing regulatory roles for franchises in Nigeria.
Our courses are certified by International Franchise Institute.
So what isthekey benefit ofgetting professional training before owning a franchise?
This category of training is for individuals who do not want to start-up an enterprise, but invest in proven and structured investment opportunities with expected returns. Such are: entrepreneurs ready to buy franchise or distributorship rights; individuals desiring to sharpen their investment savviness; franchisees who have recently bought into a franchise; prospective investors ready to own a business by buying single or multiple franchise rights.
The training comprises classroom training sessions, hands-on mentorship and investment advisory services. Participants are given practical exposure to best practices through tour sessions with successful Private Equity, Assets & Investment Management Companies.
The programmes are facilitated by leading faculties from Nigeria and other countries using best in class learning tools and technology to deliver the learning process.
What would a business owner seeking expansion gain from the franchisor certification programme?
You know, some past attempts by some Nigerian entrepreneurs to franchise, without adequate support structures to enable their success contributed to the misconception of the franchise model in Nigeria. Just as in other climates, such entrepreneurs should enroll themselves and their entire staff to franchise training and certification institutions such as Africa Franchise Institute to get adequate training to perform specific functions and to understand how the model operates.
Hence, the programme for business owners seeking expansion or executives of franchised businesses is designed with the goal to support such entrepreneurs to build capacity and sound business system for rapid local and international business expansion.
Its training modules are composed of classroom and online sessions, hands-on mentorship, and practical exposure to best practices through tour sessions with best performing franchise and multi-outlet brands in Nigeria.
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Source: INDEPENDENT FEED BUSINESS