It was while undergoing a BBBEE accreditation process for his marketing company, Leegra, that Lee Grant first hit upon the idea for Innovative Franchise Concepts (IFC). “I realised that so many companies struggle to spend their enterprise development funds, because they don’t have access to suitable beneficiaries and they lack the resources to mentor the development of sustainable small businesses,” he says.
Seeing a Gap
At the same time, he knew that there were thousands of small black-owned start-ups that desperately needed funding to help make their businesses sustainable. “There’s a guy across the road from our offices called Philemon Shusa who’d been running a small food stall from a gazebo, and we’d become friends. It seemed crazy that funds existed to help people like him, but he couldn’t access them and companies couldn’t access him,” says Grant.
Devising the model
He and IFC co-founder Shawn de Bruyn hit upon a solution that would help people like Shusa to grow their small businesses, while helping companies of all sizes to earn BBBEE points for enterprise development (ED).
IFC tailors a range of small business franchise solutions, and matches ED funding up with black entrepreneurs who become franchisees. Funds are channelled and managed independently by NEDA (National Enterprise Development Administrators), a non-profit organisation established for that purpose.
“Thanks to the inspiration provided by Philemon, the first of these franchise brands, Fast Forward Cafe, targets food street vendors,” says De Bruyn. Informal vending stalls are transformed into branded outlets in specially-designed movable units. Each vendor receives two daily deliveries from a distribution centre, courtesy of a driver who in turn owns his own business.
“Fast Forward Cafe vendors benefit from strong infrastructural support, the power of a professionally marketed brand and access to all-important bulk buying power which they can never achieve as independent operators. This, together with a month-long business basics training course that teaches them to manage finances, stock, costing, staff and customers, can turn their businesses around,” says Grant. He’s been piloting the model with Philemon, whose business has seen a significant jump in turnover.
In turn, businesses benefit from being able to invest their ED funds in sustainable small businesses, run by hand-picked beneficiaries, with the back-up support of IFC. They receive monthly progress reports outlining their return on investment. “And because the funds are pooled, no amount of investment is too small. The opportunity applies to large and small business alike,” Grant concludes.
Landing a tender
The model has piqued the interest of the Metropolitan Trading Company (MTC), which recently awarded IFC a tender to help to formalise the street vending sector in the City of Johannesburg and upgrade the city streets in preparation for the 2010 FIFA World Cup.
Grant and De Bruyn are already planning the launch of other franchise concepts that will meet the ED investment needs of a range of industries and sectors. “There are no limits to the opportunities available,” Grant concludes.
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