Commercial Service Trade Mission

Franchising

Johannesburg, South Africa

May 5-7, 2005

Mission Description:

The United States Department of Commerce, International Trade Administration, U.S. Commercial Service, Global Trade Programs is organizing a Franchising Trade Mission to Johannesburg, South Africa, May 5-7, 2005. This event will target the service sectors that have potential for participating U.S. franchisors.

Commercial Setting:

Recent years have seen the popularity of franchising increase significantly, emerging in South Africa as an effective way to conduct and grow successful businesses. Franchising also plays an important role in furthering the development of small and medium businesses. Job creation, poverty alleviation, economic growth and citizen empowerment rank high on the South African government's agenda. Franchising, with its advantages of skill transfer, start-up support and ongoing operational assistance, is emerging as a preferred type of business to address these problems. Business format franchising, in particular, is a proven concept offering potential opportunities for interested firms.

According to the Franchise Association of Southern Africa (FASA), the number of franchise systems has grown by at least 29 percent over the past twelve months, with service-orientated franchises making the greatest impact. The 22,825 operational franchising outlets contributed 10.7 percent of South African GDP in 2004, approximately R129.1 billion (US$21.5 million).

By far the largest franchise sector in South Africa is the petroleum sector, representing approximately 40 percent of total turnover of the franchise industry. Significant increases in the number of franchises are found in the following industries: cellular communication, real estate, home services and consumer goods retailers.

Mission Goals:

The Trade Mission's goal is to gain first-hand market information and provide access to key government officials and potential business partners for primarily new-to-market, and new-to-export U.S. franchises desiring to enter South Africa's promising market.

Mission Scenario:

Mission participants will arrive in Johannesburg on or before May 5, 2005 where they will have three days (May 5-7, 2005) of business meetings at the International Franchising Expo(IFE) '05, Sandton Convention Center with potential franchisees interested in their concept. The U.S. Consulate will also organize a business reception on the evening of May 5, 2005 to give the participants an opportunity to meet with potential partners. The mission will officially conclude on the evening of May 7, 2005.

This mission will be promoted through the following avenues: Export Assistance Centers and the franchising team; industry newsletters; Federal Register; relevant trade publications and associations; past trade mission participants; various in-house and purchased industry lists and on the Commerce Department trade mission calendar.
Website: http://www.export.gov/comm_svc/tradeevents.html

Criteria for participation:

• Potential for business in the market;
  
• Timely submission of company's completed application and payment of participation fee;
  
• Provision of adequate information on company's products/services and communication of the company's primary objectives to facilitate appropriate appointments with potential business partners;
  
• Certification that company's products or services are manufactured in the U.S. or if manufactured outside of the U.S. the product/service must be marketed under the name of a U.S. firm and have a U.S. content representing at least 51 percent of the value of the finished product/service;

Recruitment will begin immediately and will close on April 15, 2005 approximately four weeks prior to the start of the mission. The budget is based on 6 companies and the participation fee will be $2,450 per company. Any partisan political activities of an applicant, including political contributions, will be entirely irrelevant to the selection process.

Contact Information:

Sam Dhir, Project Manager
Global Trade Programs
U.S. Commercial service
U.S. Department of Commerce, Room 2118
Washington, D.C. 20230
Tel: 202-482-4756; Fax; 202-482-0178
Email: sam.dhir@mail.doc.gov