Home South African Franchise sector calls on government to reconsider lockdown regulations

Franchise sector calls on government to reconsider lockdown regulations

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Fear that some 75 000 jobs could be lost in the industry

SOUTH Africa’s franchise industry has called on the government to reconsider the Covid-19 lockdown regulations and urgently allow the take-out and fast food sector to trade via contactless delivery of take-out and fast food meals to avoid thousands of job losses.

“Prior to the lockdown, this sector of the franchise industry had already taken steps to augment their preparation procedures in order to deliver contactless food orders to their customers but their hopes were dashed when the regulations were published, preventing them from trading,” the Franchise Association of South Africa (Fasa) said in a statement.

The franchise industry in South Africa generates approximately R734 billion to the economy, according to the Sanlam Franchise Survey conducted in 2019.

Approximately 500 000 employees enjoy permanent employment nationwide in its 48 000 franchised outlets and 824 franchise companies, contributing just under 14% to the country’s Gross Domestic Product (GDP).

Since the government implemented the Covid-19 emergency measures, around 94% of the industry has not been trading, with the exception of mostly food retailers.

This has had a devastating impact on the industry and it is feared that unless more financial aid is provided, some 75 000 jobs could be lost in the industry.

The association said it has informed its members of the government gazette published on March 24 regarding the measures taken by government to assist businesses financially through the exemptions for the retail property sector, the UIF emergency funding application, the SMME funding through Sefa as well as other emergency relief measures as and when they are announced.

However, it said there are matters of grave concern and the association, on behalf of its members, has sent an urgent letter to the government through Trade and Industry (dti) Minister Ebrahim Patel, to consider amendment of the regulations that apply to the sector.

Vera Valasis, Fasa’s executive director, said that “while one can understand that government decided to take very strict measures to damp down the spread of the virus, we believe not having an alternative to their need for food, people are being driven out of their homes to buy food so there may be an even greater risk in not allowing contactless food delivery or for so-called dark kitchens to continue offering cooked food to consumers”.

“Delivery services have been operating all along so allowing them to deliver prepared take-out or fast food in addition to their other essential supply deliveries, makes for good economic sense.

“This would go a long way to minimise job losses and keep the franchise workforce earning much-needed income to support their families,” Valasis said.

– African News Agency (ANA)