Ojuolape Anike Kazeem is Managing Director/Chief Executive, Ank-Kazoak Nigeria Limited, an entity with diverse interests from investment, manufacturing and Business Executive International, its flagship franchise company operating in major cities in Nigeria and beyond. In this interview with Ibrahim Apekhade Yusuf she speaks on the pros and cons of franchising vis-à-vis its prospects as a high yield investment window. Excerpts:
What is this franchise and empowerment schemes all about? Is this another Ponsi scheme like MMM?
My company, Business Executive International is over three years old and this is my second year in franchise business. We are different from any other investment that has ever been had in Nigeria. We are not identified by anything called by whatever names. We are a business entity registered under the Corporate Affairs Commission (CAC) as Ank-Kazoak Nigeria Limited. And we are into empowerment, business development and education subsidy programmes/empowerment. So we are not in any way connected with any ponzi scheme you mentioned. We are into real business. Franchise business is something that originated from the International Franchise Association (IFA) is a world body and Nigerian International Franchise Association (NIFA) is a hub for franchise practitioners. You can key into franchising when you have what it takes to go to regulations, duly registered as a franchisee or franchisor. You have to go into the normal procedure to go to franchising.
Could you shed more light on the procedures?
You have to get registered with the NIFA. You have to go through series of screening and verification to be a franchisee or franchisor.
There is a lot of misconception about franchise business. Why is this so?
The start of a new thing in one’s life goes with many skirmishes; those that could bring abrupt end to such idea and those that will advance the cause positively. The first major problem people like us usually face is growing contradicting ideas of whether one should venture into actualising such idea or not. Again, people just like many of us here also are beclouded at initial stage with worries over the success of our new idea, whether it is going to be a successful trade, business or what have you.
As to be expected, the beginning of a new style, new version, new model, new age as well as new life can be so exciting. However, a beginner embattles hiccups or obstacles which may kill his move forever. The only people that survive are the committed, hardworking, enduring, rugged, patience as well as men and women with lion hearts. It is usually a game for mature and big hearted individuals.
Having said that, I will just say that franchise is a kind of business arrangement which enhances investments for any category of investor whether big or small or even medium. The franchiser grants the franchise operator or the franchisee the right to distribute certain services or product in a particular way at a particular location, and for specified periods of time. In return, the franchisee pays the franchiser fees and royalties.
In the case of business format franchise, the franchisee buys the right to market and sell a particular product or service in connection with entire system of operation. The franchisee pays the franchiser fees for the right to use the franchiser’s trademark and marketing plan.
In some instances, franchisee buys an entire system including: building, equipment, supplies, training to mention just a few. We also have what you call a product franchiser, which is a business arrangement whereby the franchiser manufactures and distributes a physical product offered to consumers through dealership. The franchiser dictates to franchisee or dealer how to conduct the dealership business, e.g. 7UP, Coca Cola Bottling Company.
We also have what we call the cooperative franchising, which refers to a franchise that makes use of resources or harmonises resources from individuals who act as franchisee, invest in franchiser’s business, to expand, improve and develop it. In turn, the franchiser pays profit and others to investors. You are required to look for an accredited franchising dealer, sub-dealer or agent as well as invest in available investment with at least minimum payment required.
So what do you franchise? Is it goods and services?
We franchise so many things such as business, manufacturing, innovation services. Everything business.
What is the modus operandi involved for a typical franchisee? Apart from certification and meeting regulatory requirements
We have many products.
Do you have relationship with manufacturers?
We can’t go directly to the manufacturers because we are bonded by the laws and codes of the NIFA. We go through the hub, which is NIFA to register as a franchisee then we tell them what we want to venture into.
So it is the hub, NIFA that helps you to link up with the different businesses or companies as the case may be?
In terms of capital outlay, how much do you require to set an average franchise company?
The minimum as a franchisee is N2million.
So once you pay this money you start getting products?
No, this is just to register. Then depending on the products you want to venture into.
Like you said, franchise is a global phenomenon but it hasn’t gained a lot of attention here. Why do you think so?
Franchise has become a globally accepted business model for small and medium scale enterprise development in most countries. But Nigerians are not keying into it because they’re not aware or adequately informed about the underlying benefits. There is no inspiration or motivation whatsoever for them to go into it because a lot of people have misconceptions about how franchise business works. The thinking out there is that it’s a big investment that is capital intensive and all that, which is priced away from the reach of the low income earners and all that. But franchise is not as limiting or exclusively expensive as people see it. Franchise is not about that at all. Franchise business can be done by anybody provided you know the intricacies involved.
What is your organisation doing to create awareness about franchise business?
We have been organising seminars to create awareness about franchising in the last two years. At the beginning of this month for instance, we organised one of such seminars in Abeokuta in Ogun State. In fact, we had expected a modest figure of about 600+, but we got more than we expected. Over 3000 people came to attend the awareness programme which held at the June 12 Centre in Kuto, Abeokuta. It was really massive. What that shows is that people are really anxious to develop other streams of income in order to meet their daily demands whether as a family, students, civil servants, retirees amongst others.
Certainly, my motive of bringing people together really is to tell them what they stand to benefit with their association with us as a company because we’ve got what it takes to assist them as far as getting into franchise business is concerned. At Business Executive International (BEI) we have developed our capabilities even beyond franchising. We’re into women empowerment programmes, business development, education subsidy services to mention just a few. In fact, we created this awareness programme so that people can know where to get help from.
If people come to you, what should they expect?
If they come to our office at Abeokuta, which is our headquarters, we tell you the different products we have and you tell us what you want. Afterwards, we get you registered with a token of N5000 and we take it further from there.
How does your empowerment programme work?
It’s the same way too. What we do basically is that we counsel our prospects and educate them on business and financing and afterwards, we provide seed capital and soft loans for those willing to set up small businesses either as petty trading, hand crafts, etc. Depending on the products and services or projects they want to venture into we give loans from N50,000 to N1million at single digit interest rate.
What are terms of repayment?
It depends on your projects really. We do three months, six months but the maximum is nine months.
Is it a kind of revolving loan or is a one-off?
Of course, ones you finish paying the initial loan, you can qualify for more loans as the case may be.
Are you thinking of expanding outside Abeokuta, Ogun State?
We’re already expanding. We are currently in about nine states of the federation. We’re already in Ekiti, Oyo, Osogbo, Ogun, Benin, Cotonou in Republic of Benin and also in UK. Of course, we’re coming to Lagos soon. All these places are where my sub-dealers are.
Who are the sub-dealers?
The sub-dealers work on their own. They actually registered under Business Executive International to go into franchise. After meeting all the regulatory requirements we adopted them to work under our company.
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