Think you’re ready to expand through a franchise model?

The franchise market is an attractive growth strategy for business owners. And while the local market is thriving with an estimated turnover of R587 billion, it’s no guarantee that it will be easy to succeed.

That said, if you are thinking about expanding your business into a franchise, you need to do your homework. Firstly, determine whether or not your business has the basis for developing a franchise system, as not all businesses are suited to this model. And secondly, understand the common pitfalls in establishing it.

Is your business franchise-worthy?

There are just two essential aspects that will resolve whether or not a franchise is an option for your business expansion goals. One is regarding the ability to present a distinctive value proposition that will appeal to franchisees, who are in effect investors in your business. The other is the ability to replicate the business long into the future. A successful franchise is ultimately underpinned by the product’s or service’s flexibility to adapt to evolving customer needs and market dynamics.

Bradley Sugars, a global franchise founder authored a book entitled, “Successful Franchising” in which he shared some top tips for franchising a business. He suggests that entrepreneurs;

Ensure that the business is sustainable. Test the concept to ensure that the systems work, it operates efficiently and is making a profit.
Consider whether or not the business can actually be duplicated, and if there is enough consumer demand for the product or service. This is reinforced with marketing and strong brand equity, i.e. the brand is easily recognised and positively perceived in the market.
Establish if the product or service has longevity. Will it be able to adapt to future trends without becoming redundant?
Ascertain whether or not there are enough funds to see you through the next three to five years to sustain the business until profits consistently come in.

Common traps when starting up a franchise

If franchising is still a viable option, consider these common pitfalls in establishing it;

Underestimating the amount of the principle investment required to self-fund the business in the beginning. Start-up costs add up.
Providing insufficient training is another common issue. The initial training must be adequate to equip the team to navigate the challenges that lie ahead. This is supported by well structured and developed systems and procedures. Develop step-by-step operating manuals for franchisees; don’t assume that they already know.

Not employing the services of trusted, professional advisors including a lawyer, financial advisor, a franchise consultant and even a franchise solicitor to help draw up the franchise agreements. Ensure all legalities are in order before you franchise the business.
Ignoring the competition. The growing market is hugely competitive and you should never undervalue the potential for competitors to grow their slice of the market share pie, stealing it away from you.
Not being discerning enough about selecting the right franchisees. Oftentimes greed gets in the way of choosing franchisees for the long-term, especially when the enthusiasm of getting started and making money can cloud judgment. Sour franchisee relationships can hurt the business in so many ways from legal costs to reputational issues.

The saying, “A fool and his money are quickly parted” should be applied as a guiding principle when realising a franchising ambition. While there are many challenges, research, counsel and caution can safeguard against failure.

Pieter Scholtz is the Co-Master Franchisor in Southern Africa for ActionCOACH, the fastest growing and largest business coaching company globally. Pieter and his partner Harry Welby-Cooke developed ActionCOACH across Southern Africa, which now boasts over 40 franchisees. He is also a certified, leading business and executive coach. He has successfully assisted countless business owners to significantly grow their profits and develop their entrepreneurial skills. / 012 665 1015


By Pieter Scholtz–Leading Business Coach, Master Licensee for ActionCOACH South Africa.

John D Rockefeller, a man who commanded incredible amounts of money, once said: “Those who have leisure time to spend pursuing their passions and dreams experience the real wealth in life.”

Knowing how to spend time is a more valuable skill than knowing how to make, manage, invest and spend money. It is wise for entrepreneurs, who want to be truly successful, to master the use of their precious and irreplaceable time. What I have found most interesting is those who know how to manage, budget and save time – rather than letting it manage them – will always find it easier to make money.

Learning how to lop 10 hours off a typical work week without sacrificing any income may take practice, but it’s easier and faster to accomplish than most people think with these three steps.

Step One: Fire Extraneous Customers

The first rule of any time management system is to utilise the time we are allotted most wisely. As the saying goes; Time is money. The thief to be most wary of, is the one who steals our time.

So the rather controversial first step is to eliminate wasted time on customers who tie up sales representatives with inconsequential sales, steal your valuable time with constant complaining and waste your accountant’s time chasing them for payment. You need to either get rid of them or transform them into customers who proactively feed the bottom line. While this approach may sound radical, it makes practical sense to only focus on customers who respond with profitable transactions.

Firing customers may involve deleting dead-end leads from the client database. Or it may mean sending customers or clients to a business that more appropriately matches their price demands. Or you could adjust the magnets that are attracting those unwanted customers in the first place. Examples of this are discounts, freebies or products in the business that are not related to the core business model. Concentrate solely on products and services that produce the most profit and cull the dead weight ones that don’t contribute their share to the bottom line. You could spin those lines off as stand-alone businesses and sell them to another entrepreneur or upgrade to premium versions that offer higher profit margins. Profit is always the goal and is the most important barometer of success.

Step Two: Double the Conversion Rates of Transactions

Money is a fabulous timesaver and those who know how to make money more efficiently can leverage it to carve out more time for themselves. The key to increasing profits is to convert unprofitable interactions into profitable ones. This is a foolproof formula for saving more hours each day without compromising productivity or earnings.

It does not have to take slow years to make the money needed to free up an extra 10 hours a week. Bear in mind that the road may be long, but those with a faster stride arrive at the desired destination much quicker. Most people crawl toward retirement. Innovative entrepreneurs sprint there in record time.

If you invest in a mutual fund or pension plan and it may take decades to get enough of a nest egg to make it possible to semi-retire and take 10 hours off each week to play golf or spend time with family. However, increasing profits in a business can be done in a matter of days or weeks.

To prepare for your profit-boosting initiative, gather accounting data and metrics to get a clear picture of where your profits come from, how many contacts are made with customers each month and how many customers make actual purchases. An easy way to harvest such information is by using software connected to point-of-sale terminals or cash registers.

Next, launch a marketing and advertising push to generate new customer leads, to encourage existing customers to buy more and to promote the most profitable products or services.

Part of this effort should involve a new way of looking at the business model. Most entrepreneurs see the future of their companies in terms of products and services that fill a particular market need or niche. Find the right merchandise and the customers will come. Build the best resort and it will be booked a year in advance. Invent a better mousetrap and make millions. Another way to view the marketplace of opportunity is to reverse that point of view. Instead of looking for the ideal items to sell, invest in purchasing the loyalty of the perfect customer. Rather than chasing market share, chase “wallet share” or more profitable customer-based transactions. No matter what a business sells, it’s ultimately the customers and how many times they spend money that generates the profits. Invest in attracting and retaining good customers and the rest will take care of itself automatically. Instead of reinventing the wheel, find out who is buying wheels and make them your steady customers. Then sell them a premium wheel with a wider profit margin. Finally, ask clients to bring in their friends so that you can sell them a set of wheels too.

Once an expanding customer base is established, use incentives such as superior customer service, in-house financing, exclusive product lines and preferential customer perks to inspire clients to double the number of their monthly transactions.

Try up-selling customers to premium products. Cross-sell them to accessories or add-on features. Even down-sell to them by offering a more economical version of the product they can’t yet afford so that they don’t take their business to a competitor. At the same time, continually make a choreographed effort to generate fresh leads for potential new customers.

Step Three: Run Your Businesses on Auto-Pilot

Now the business owner has enviable options. One possibility is to close down the business for 10 hours each week, take time off and settle for making the same amount of money per month that was generated before boosting profits by 25 percent.

Another alternative is to leverage that newfound success for progressive changes and forward momentum. You can maintain the same hours of operation, capture the extra 25 percent in profits and then wisely reinvest those profits in greater timesaving initiatives.

By working smarter – not harder – through organized systems, cutting edge technology, innovative advertising and dynamic employee training, you can prepare to put the business into the hands of capable others – which is the next step toward personal freedom. If somebody else is running the store – without any loss of productivity – it is possible for you to literally play golf all day without loss of income.

Pieter Scholtz is the Co-Master Franchisor in Southern Africa for ActionCOACH, the fastest growing and largest business coaching company globally. Pieter and his partner Harry Welby-Cooke developed ActionCOACH across Southern Africa, which now boasts over 40 franchisees. He is also a certified, leading business and executive coach. He has successfully assisted countless business owners to significantly grow their profits and develop their entrepreneurial skills. / 012 665 1015


The key reason to start a business should be to sell it one day, and the way to become truly wealthy is by buying, building and selling businesses.  Generally speaking, you won’t achieve great wealth by owning just one company, you’ll need to buy, build and sell business a few times over.

Ideally, the only time you’ll want to hold onto a business, is if you are planning to franchise or license it but that that is a different case altogether, with different considerations, processes and requirements to what I am discussing here.

A good strategy to adopt is to hang onto your first business for its passive income while you acquire and build up your next business.  At this point, your first business should be at a place where it can successfully run without you. This generates a passive income and alleviates the pressure when selling, thereby allowing you can take your time finding the right buyer and negotiating the best deal possible.

It is important to understand that you will need to be a good negotiator if you are going to sell the business yourself.  You are aiming to get the best price possible and to achieve this, the business needs to be at a point where the buyer just has to move in and start trading – everything must have been set up already.

There are a number of factors that influence the ability to sell your business and the price that buyers will be willing to pay for your business.  These factors are as follows:


  • Strong Consistent Cash flow


One of the most important factors  that impact on the “salebility” of the business is the ability of the business to generate strong consistent cash flow coupled with good margins and ideally a large percentage of repeat business


  • Assets owned.


Here a potential acquirer will look at which assets are owned by the business, be they in the form of products, patents, registered brands, investments, shareholdings in other businesses that are also part of the sale as well as physical assets (movable and immovable).    


  • People, Process and Systems


Every business needs systems and good people to ensure that you have a “COMMERCIAL, PROFITABLE ENTERPRISE THAT RUNS WITHOUT THE BUSINESS OWNER.


  • “Scalability” of the business.


The purchaser, will always want to ensure that the business is scalable so as to ensure that they can extract further value from the business after the business has been bought.  Failure to build scalability, may result in the purchaser having bought additional revenue and not future leverage from the acquisition.


  • Culture of the Organization.


This is often an area that is overlooked.  Research will tell you that around 80% of acquisitions fail because of the inability to fully integrate the respective teams into one cohesive operating unit.  

The key to ensuring that your business is saleable, is to start working on the above five areas from the start and to develop these areas over a period of time.  Too many business owners wait until they want to sell the business before analysing how “saleable” their business is. The reality is that most acquisitions take place when you least expect them to take place  and therefore you need to prepare your business for sale from the beginning. That way you are better prepared when an exciting offer does come your way as well as being able to maximise the selling price.


Pieter Scholtz is the Co-Master Franchisor for ActionCOACH in Southern Africa. The fastest growing and largest business coaching company globally. Pieter and his partner Harry Welby-Cooke developed ActionCOACH across South Africa which now boasts 30 franchisees. He is also a certified, leading Business and Executive Coach. He has successfully assisted countless business owners to significantly grow their profits and develop their entrepreneurial skills. / 0861 226224.  


Darryn Le Grange: MD turned Entrepreneur

Is your life long dream to run your own business?

Darryn Le Grange starting coaching as a client with Marlene Powell, and soon realised business coaching is something he would like to do. It was an opportunity to own his own business, work with people and make a difference in their lives.

Click on the image below to view the entire persona.

Francois Lubbe: Breaking the Corporate Shackles

Are you unsure if ActionCOACH will work for you?

Each week we will feature a  coach  persona – all with different personalities and backgrounds,  and if you can relate to any one of our coaches and want to join the team then make sure you contact us to start your journey of discovery.

First up:

Francois Lubbe: Breaking the Corporate Shackles

Click on the image below to view the entire persona.

KRU Detailing ~ Testimonial

CLIENT INDUSTRY: Structural Steel Detailing
BUSINESS COACH: Francois Lubbe

REGION: Randburg – Gauteng
BUSINESS AGE: 14 years


In a very challenging industry with high expectations of service delivery, we aimed to be the best. Unfortunately we could never achieve it. Having silent partners who were just in it for the money and not thinking about the growth of the company, its vision and mission, receiving a monthly income from the company. My staff was willing to give it their all, but did not have the correct tools physically and emotionally to do so.

Company was running at a lost
I was feeling unappreciated and undervalued

Being afraid of asking questions and potentially losing my clients
Chasing the bottom live

Had to cut my silent partners pay outs to what it was supposed to be and restructuring the deal in place.


“Initially the focus was to clean the path by reducing obstacles and interferences that were blocking the path to success. Business and personal goals were aligned and personal and business strategies were identified and implemented that put the business on a profitable level. Personal strategies to empower Johann as a business owner to lead the team to new heights were embraced and executed. Johann’s own words describe it best: I took total control of myself…” I took total control of myself, my company and my employees, I started to believe in myself and in my company, educating my staff, getting our company values in place as well as our mission and vision. The energy I reflected rubbed off on my staff and with them just as motivated as me, we as a team and I as their leader showed our clients that we are the best and we deliver the best service with the best results.


“A clear business vision, mission and culture combined with setting of higher standards for all team members set a (new platform) that was a stepping stone for future growth. Johann’s leadership caused rejuvenated energy and excitement in his team that ensured a higher level of team contribution to a new level of desired results on a business and individual level.” The company showed the best profit in years – 400% profit Year-on-Year. In Johann’s own words: I had the ability to take what was due to me…

Company showed the best profit in years

Had the ability to take what was due to me , I felt like a business owner for the first time in my life
Building relationships with our client and gaining the trust back of long lost clients
Making Employees feel valued

Focusing on client and employee satisfaction

Gained confidence to ask questions and being the friendly open face of the company.


I was at first very sceptical about coaching. When Francois told me that he guaranteed me that I will make my first month of coaching fees back within the first 6 weeks, I thought okay let’s give it a try but I don’t know. And that exactly happen within my alignment session already with the option I was given to go and make changes he made me save more than my yearly amount that I had to pay him to be my coach. No amount of money can be placed on the value and change that coaching did for me as a person and for my company. I am currently seeing Francois once every second week and will continue with it.


KRU Detailing is doing better and better every day, I was one of the 3 finalists at the BEFA as young entrepreneur of 2016, I have never had so much confidence in my business and in my team. KRU also had its biggest months and biggest contract in 2016, that it had ever had since the company was started in 2002. I also got 2 awards from Francois at the end of 2016 for Client of the year and profit growth year on year.


Coaching was and is still a live changing experience for me as a person, husband and business owner. The growth in me, my business and my team speaks for it self’s in the results for the past year. I will recommend coaching to any person that has a business and want to make a difference by changing for the better. Last but not least I have the Best Coach of the all – Francois Lubbe

1) What made you consider coaching?

After attending the BEFA (Business Excellence and Awards0 conference) in 2015 – I was motivated and determent to change myself and the Business. I had to make a decision if I am going to put every last bit in and turn the Business around or am I going to close the doors of my company. The answer was not clear but I was not able to lose everything I worked for so long and also to leave my staff unemployed.

2) What was it like before you had a coach?

Lonely, unmotivated, no direction and strategies to help the business on path of success.

3) What is it like now that you have a coach?

Confident about my future and new exciting possibilities for business and personal growth.

4) Where did the coach make the most impact?

Personal growth and see things differently that allows new personal and business possibilities.

5) Why would you recommend coaching?

It changes your life and business forever.

Client contact for reference purposes:
Company: KRU Detailing CC- Johann Strauss 083 658 4844

Certified Business & Executive Coach

Coach: Francois Lubbe – ActionCOACH Franchisee
Cell: 082 441 4988


Business Coaching

Book Your Free Coach Consultation Today!