THE Franchise Association of South Africa (Fasa) has announced the establishment of a Food Franchise Forum representing the majority of the household names in the casual dining and quick service restaurants (CDQSR) sector.
Whilst the Fasa operates under a government gazetted Code of Ethics for its 17 different sectors, the development of a Food Franchise Forum within Fasa to liaise specifically on matters that have the potential to impact on the sector is an important step in the challenging food environment. The Forum is bound by a supplementary code of ethics for the franchised food sector and will adopt a series of monitoring measures.
According to Vera Valasis, executive director of Fasa, “It is common knowledge that our sectors find themselves under increasing pressure emanating from an ever-growing number of legislative and regulatory interventions”.
This is not a specifically South African phenomenon, Valasis said. “Similar roadblocks are popping up in other parts of the world, with well-documented developments in the US and the EU being cases in point. Some of the regulations these countries have enforced, or are considering, are onerous and threaten the very survival of many long-established food service operations.”
Food Forum Chairperson, Nazrana Hawa of Spur, which spearheaded the establishment of the body under the auspices of the Fasa said, “Raising awareness about issues affecting our sector requires a united voice and a credible representative body mandated to speak on behalf of the sector”.
Examples of recent issues causing concern to operators in South Africa’s CDQSR sector range from the recent food safety scare, draft liquor policy and proposed smoking regulations. Other key projects identified for consideration are new regulations for food licences, labelling regulations, proposed requirements around gas installations, tax laws that may affect the sector and developments around landlords and rentals and the POPI Act.
According to Hawa, “Experience tells us that representations submitted to government by individual brands, no matter how well-reasoned, are unlikely to achieve the desired results. For the sector to be heard it needs to do so through a credible, representative body, mandated to speak on the CDQSR sector’s behalf”.
Hawa added, “The need for and value of the Forum is validated by the fact that major franchise companies have come on board including: Famous Brands, KFC, Nando’s, Taste Holdings, Fournews, Hot Dog Cafe, Barcelos, Pizza Perfect, Adega, Mike’s Kitchen, King Pie, Jimmy’s Killer Brands, Chicken Xpress, Kauai and OBC Chicken & Meat.
“While FASA will continue to represent the interests of franchisors across a variety of business sectors, including the restaurant sector, the FASA Food Franchise Forum will represent the sector-specific and clearly-defined interests of the CDQSR sector only.”
Based on 2016 figures, the franchise sector as a whole generated R587 billion in sales; this amounts to a significant 13.3% of South Africa’s GDP. Of this, the CDQSR segments contributed 29% of the total. The sector also employs some 65,500 people, the vast majority of whom were previously untrained individuals who otherwise stood little chance of finding employment in the formal economy.