Business franchising critical for SME growth
Industry Players and other business operators are advocating regulations for franchising in Ghana.
Under franchising, well-established and big businesses grant permission to new and small entities, under special arrangement, to use their brand for same products.
Statistics indicate 91 percent success rate in the practice economies with appropriate legislation and regulations.
The issue came up at a media training session organized in Kumasi by the Institute of Financial and Economic Journalists.
Executive Director for think-tank Centre for Economic and Business Research, Gordon Newlove Asamoah, says Ghana’s Gross Domestic Product would increase if the system is adopted.
“If you look around businesses are cropping up and are unable to survive. In the world now, economies are taking advantage of it so it is about time Ghana became serious about it.”
With this system, the franchisor is able to give management or technical training to its franchisee.
This means any new business that is coming under any franchisor will be able to survive due to the mentoring and support.
According to Mr Asamoah, Ghana consumes a lot of services which means, “we can have foreign companies coming together through the local ones and have partnerships with the multinational companies. We can tap from their technology and management platforms.”
He is positive this will not only strengthen businesses but make it lucrative to create more jobs.
According to available statistics, about 80 percent of businesses are unable to survive after seven years in operation.
Voltic Ghana is one of the companies running franchise in Ghana.
Country Sales and Marketing Manager, Raymond Gbetivi, believes a legal framework for franchising is critical for the growth of small and medium scale enterprises.
Ghana currently has no legal framework to govern or guide the operations of franchising.
This means businesses operating under the system are challenged in so many ways to maximise its operations.
If there is a framework, it is easier to there is the need to promulgate laws. If there should be a dispute between franchising companies, it will be difficult to tackle”
According to him, “we encourage students out of school to start something but nobody seems to be thinking about how franchising can help entrepreneurs. It is important for SME development”.
President of Institute of Financial and Economic Journalist (IFEJ), Lloyd Evans, says it is incumbent on journalists to open up the discussion and set the agenda to compel legislators to see the need to create a framework to enhance trade and commerce.
“Industries, the media, the association of Ghana Industries (AGI) and other stakeholders must come together to push for this”.