Why You Shouldn’t Cut Back on Marketing During Tough Economic Times, and Other Survival Dos and Don’ts

Updated on 16 November 2018

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“Focus on the basics – get the basics right, get the services right, is the advice from Tony da Fonseca, Managing Director of OBC Chicken. He was speaking on a panel at the recently held seventh annual FNB Franchise Leadership Summit hosted this year on Tuesday 13 November 2018 in Johannesburg.

Da Fonseca, who is on the board of directors of FASA and also a non-executive director of the Consumer Good Council of South Africa, was on a panel discussion at the FNB Franchise Leadership Summit.

In light of South Africa going through a technical recession, Da Fonseca and several other industry leaders on the panel discussed how franchisors and franchisees can cope during this period.

Here are tips for franchisees who are coping through the tough economic times:

1. Don’t cut on the marketing

Da Fonseca said that normally during tough economic times, business owners tend to cut back on the marketing budget, but he advises against it. “Do marketing aggressively. We focus a lot more on marketing locally. You can cut your business that way if you cut your marketing spend.”

2. Invest in your business

Da Fonseca also said: “Let’s change the way we do business. (Invest where it will) stimulate change within the business,” he said. He suggested that you invest in things like investing in your staff being trained on customer service.

3. Invest in relationships

According to Da Fonseca, during the tough economic times, franchisors must provide more support than ever to their franchisees. “Franchisors must focus on the success of the franchisee. The two should be interdependent with each other.”

4. Find the right location

Eric Parker, Franchising Consultant: Franchising Plus, said be specific on where you want to position yourself within a shopping mall. “By just moving to a better location you can improve your business’ sustainability.” He added that franchisees shouldn’t be in a hurry to grow their store’s space when business is going good.

5. Plan and prepare

Ronel Fester, Sector Head: Fuel and Automotive at FNB Franchise, who was also on the panel discussion with Da Fonseca, advised that although you get a standardised business plan from a franchisor, you must have your own business plan as well. Fester said this includes how you will be doing marketing for your site.

6. Take a look at unexpected expenses

She also warned that before going into franchising, you should ask the question: “can this business afford me?” She said that the potential franchisee should look at his or her current expenses and see how it will be taken care of.

“Also look at things like the unexpected expenses.”

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