![Page 1: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/1.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
1
Franchising as an instrument for the ADB for SME development
M. BourenaneEnterprises Support Service
Division [email protected]
![Page 2: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/2.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
2
I. SMEs and economic development
II. Franchising as an SME development tool
III. Franchising in AfricaIV. Franchising and the ADB
V. Some Concluding Remarks
![Page 3: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/3.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
3
I. SMEs and economic development
• over 90% of private businesses are SMEs
• main generators of employment
• contribute to a more equitable distribution of income
• contribute to local and regional development
• promote a culture of entrepreneurship and other business-related skills due to their low entry barriers
In Africa, SMEs generally lack technological and managerial capacities, leading to high failure rates
![Page 4: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/4.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
4
• Job creation: direct and indirect jobs
• Wealth creation: contribution to poverty reduction
• Skills transfer and business linkages
• Improvement in standards and quality
• Generate entrepreneurship
Franchising has a significantly higher rate of success than independently run SMEs
II. Franchising as an SME development tool
![Page 5: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/5.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
5
Evidence of the Existence of Franchising
Adequate Environment to Support Franchising
Varying degrees of franchise activity were found to exist in 22 African countries
III.Franchising in Africa
![Page 6: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/6.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
6
Factors that affect the development of franchising in African countries:
General enabling business environment
Population and market size
Proximity to larger franchising nations
Level of urbanisation
Literacy rates
Corruption
![Page 7: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/7.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
7
Constraints to the development of franchising:
Poor awareness by the different stakeholders
Lack of financing available
No specific franchising regulation
Disinformation as to existing business opportunities
Little private sector involvement and support
![Page 8: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/8.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
8
ADBLEGAL AND
REGULATORY INITIATIVES
INTERNATIONAL MARKETING AND
AWARENESS INITIATIVES
CAPACITY BUILDING
INITIATIVES
FINANCING PROGRAMMES
Franchising and ADB: Main axes of intervention
![Page 9: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/9.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
9
Sponsor and participate in Franchising Seminars
and Conferences
Awareness Creation: Research and Publications
INTERNATIONAL MARKETING AND
AWARENESS INITIATIVES
MOROCCO
EGYPT
SOUTH AFRICA
NIGERIA
JAI Seminar (TUNIS, CAIRO)
Franchising Toolkit
Franchising Report
![Page 10: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/10.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
10
CAPACITY BUILDING
INITIATIVES Technical Assistance
Programme:FRANCHISE
ASSOCIATIONS
MOROCCO
EGYPT
Non-regional Franchise
Associations
Other Local and International
Experts
Franchise Association of
Southern Africa
Network of African FRANCHISE
ASSOCIATIONS
![Page 11: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/11.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
11
FINANCING PROGRAMMES
FIRST PROGRAMME to finance franchisees in
South Africa
ROLL OUT OF THE PROGRAMME
SADC ? Morocco Egypt ???
![Page 12: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/12.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
12
Last year’s seminar an overview:Franchising as business format
Status of franchising
Challenges
Role of private sector and its support institutions
Access to finance
Policy and regulatory issues
International versus indigenous franchising
![Page 13: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/13.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
13
This year more in-depth and new topics:Franchising associations
Self-regulation
Laws and regulations
Business development services for franchisees
Regional franchising development through indigenous and international franchising
![Page 14: Franchising as an instrument for the ADB for SME development](https://reader036.vdocuments.us/reader036/viewer/2022081516/56813985550346895da1198c/html5/thumbnails/14.jpg)
PRIVATE SECTOR DEPARTMENTPRIVATE SECTOR DEPARTMENT
14
IV. Concluding Remarks1. Franchising can have positive development impact
in Africa
2. Potential should be assessed with a medium to long term perspective
3. Important to bring all stakeholders together to address existing constraints with a Public-Private Partnership approach
4. ADB can play facilitative role along with other stakeholders