Tanzania: Adopt concept of franchise business, SMEs urged

Small and Medium Enterprises (SMEs) have been urged to adopt the concept of franchise in business so that they could easily exploit Tanzania’s untapped potentials with the aid of firms from outside the country.

This was said in Dar es Salaam recently by African Development Bank (AfDB) country representative Tonia Kandiero when closing a five-day franchising development workshop. The workshop was organised by Small Industries Development Organisation (SIDO) in collaboration with Moyanga Louw Associates.

She said SMEs should note that it is important to understand and develop a franchise profile, which is the practice of using another firm’s successful business model.

The franchisor is most involved in securing protection for his trade mark, controlling the business concept and securing his know how,” she said.

Franchising, she said, is understood as an SME business strategy which has a double role for franchisors and franchisees.

Kandiero said for the franchisors, it provides a clear and positive leadership, and for the franchisees, it helps to achieve financial and personal goals and protect the strategic position of the brand.

Besides, for the franchisees, it helps run profitable business to grow a base of happy customers and supports the franchisor‘s brand value, she added.

According to her, franchising offers business the advantage of starting up quickly based on a proven trade mark and the tooling and infrastructure as opposed to developing them.

She noted that in the Tanzanian environment perspective, SMEs play an ever increasing role in creating income and employment.

“However their potentials have not yet been tapped due to development and operational challenges including capital, technology and management which can be partly solved through franchising,” she said.

She called upon SMEs to recruit right franchisee saying they are a crucial step in franchising business which requires a productive long term relationship.

For his part, SIDO director of training and extension Service Pius Wenga said time has come for African countries to start franchising.

He said 12 percent of South Africa companies has entered into franchising business with other firms operating outside the continent

"We should start with at least ten percent of our SMEs who can join the bandwagon so that they improve the technology and capital through franchising," he said.

More than 50 SMEs who attended the workshop funded by the government of Japan through AfDB were awarded certificates.

SOURCE: THE GUARDIAN