In the Daily Graphic of December 17, 2025, a report by the Business Desk calmed the nerves of most shoppers of Shoprite to the effect that all the stores which were previously operated by Shoprite have been acquired by Brands For All.
The part of the story which generated excitement was the entry into a franchise agreement by Brands For All with the French retail giant, Carrefour to assume the running of Shoprite stores under the branding of Carrefour.
It is worthy of note to mention other business models like licensing, farm-in, equity participation, mergers and acquisitions that can also be deployed successfully to scale up the efficiency of existing companies.
While the other models may have the effect of substantially transferring the ownership of an existing business, a franchise has the effect of keeping the business in the hands of the owners without the prospect of the loss of managerial control.
According to Charles Hill and William Hult, franchise is a business arrangement where the franchisor sells an intangible property which is normally a trademark to the franchisee with the insistence that the franchisee abide strictly by the rules of the franchise.
What does operating under a franchise involve?
Franchise in the modern era started with the US Statesman Benjamin Franklin from around 1731 in a franchise arrangement with Thomas Whitmarsh for the provision of printing services in Southern Carolina.
A franchise operates as a partnership between the franchisor and the franchisee with laid down procedures to be followed.
The franchisee will be required to use the brand name, operating systems and adopt all other trappings and attractions of the franchisor in its operations.
The franchisor in turn provides training support and agrees for the use of its operating systems in the business of the franchisee.
In return for granting a franchise, the franchisor is entitled to “royalty payments” which is calculated on the overall sales revenues which is generated from the franchisee’s operations.
Unlike licencing which is another strategic business alliance model and involves the transfer of technology and is predominant in manufacturing, franchise is mainly dominant in service industries.
The US is recognised as the most dominant country for franchise operations with the restaurant chain, McDonalds being the most dominant franchise operator with over 40,000 franchise operations in different countries.
Other franchise operations are KFC with about 30,000 operations in about 145 countries, Subway, also a restaurant chain, UPS, Two Men and a Truck with 48,000 franchises, RE/MAX, a real estate conglomerate and others.
It is estimated that in the US, over 850,000 business units have developed out of franchise agreements and making returns of nearly a trillion dollars to the US economy annually.
Most franchises can be found in merchandise distribution, service, hotel operations, automobile servicing and fast food chain industries.
The face of the new Shoprite shops after the franchise
It is important to draw attention to the fact that, upon the total implementation of the franchise agreement, Shoprite shops will be branded in the colours of Carrefour with the complete adoption of its operating model, though the shops are now owned by Brand For All.
Patrons of Shoprite will enjoy the brand quality of Carrefour which is equally good a brand as Shoprite.
An important lesson from the franchise acquisition of Shoprite by Brand For All is the encouragement to would be entrepreneurs to seek franchise relationships with already established businesses.
This is because a franchise creates an opportunity for a start-up or small business to progress very quickly on the business ladder.
Also, established businesses which do large business with foreign companies by selling their merchandise can seek franchise relationships with them.
This is for the reason that a franchisee buys into a successful business model and actually shares in the goodwill that the franchisor has already created.
Areas of consideration for creating franchises in Ghana
Previously, the plush Holiday Inn Hotel, now Palms Hotel at the Airport City in Accra operated under a franchise from the parent company of the Holiday Inn Group in America.
Likewise, Tulip Hotel at the East Legon Residential Area in Accra similarly operated under a franchise granted by the former Golden Tulip Hotel, now Lancaster Hotel.
Numerous franchises could be created especially in the consumer goods and fast food sector with government support to build up local entrepreneurial capacity.
For example, an indigenous fast food company like PapaYe could create about 300 franchises across the country through a programme backed by the government with generous incentives.
It could grant franchises to catering graduates from technical universities in groups of about 3-5 to set up small to medium franchises across the country.
Automobile companies like Toyota, KIA and Rana Motors could also create franchises with groups of engineering graduates who could be propped up to set up small vehicle showrooms in the regions and districts which could display about 5-7 vehicles at a time with facilities for servicing.
The government could co-ordinate the setting up of local franchises through a special unit at the Ministry of Trade, Agribusiness and Industry with generous incentives granted to the franchisors and the franchisees.
Conscious efforts could also be made by already established local businesses in the retail and distribution trade particularly, to seek franchises from their foreign partners.
This is due to the fact that most foreign businesses are often wary of establishing outlets in foreign countries as a result of lack of knowledge of the local terrain and cultural differences etc.
Benefits of Franchise
Melena Yanos, a business development consultant in an article titled ‘‘Franchise Opportunities for Young People’’ stated the benefits of a franchise as a franchisor having climbed up the learning curve and ready to share all the business success it has discovered in the industry with a start-up or a franchisee.
This is because, the franchisor has developed the marketing, training, operational systems, the brand and the marketing tools which it shares with the franchisee.
Some of the direct benefits that a franchise confers on a franchisee is the sharing in a well-developed business system of the franchisor, the benefit of managerial training and support, a brand name appeal, standardised business support, financial assistance, mentorship etc.
In the US, Mc Donald’s franchisees spend time at its training centre in Illinois where they undergo essentials of learning Mc Donald’s operations.
Prospects of franchise in Ghana
Franchise might be a good business opportunity for alleviating graduate unemployment in Ghana. It also offers a veritable way of building up the entrepreneurial capacity of new and young entrepreneurs and gradually ease them into the business terrain.
The prospects of franchise in Ghana hold good as the country has good laws on intellectual property and there is no prospect of franchisees infringing on the intellectual property rights of franchisors.
The writer is a lawyer and the Principal of Akyeampong & Co, Corporate and International Business Attorneys with special focus practice in Commercial, Corporate, Banking, Finance, Insurance, International Business, International Trade, Intellectual Property and Mining Law.
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Source:
www.graphic.com.gh