Franchising is widely seen as the safest route open to those who want to enter the competitive world of entrepreneurship with a safety net. It has also been recognised as the vehicle of choice for the expansion of a small business into a national network. There is yet another facet to franchising, however, that is less well recognised, namely its power to transform an entire industry and the public’s perception of that industry.
One company that has taken this potentially stony path and have negotiated it successfully is Cash Converters, an international network of second-hand goods stores with its origins in Australia. Indeed, within a few short years, Cash Converters have managed to revolutionise the second-hand goods market by transforming its image from that of a dingy store of almost ill repute, frequented only by individuals in dire straights, into a high street shopping experience that holds strong appeal for the middle to upper market segments.
Cash Converters business model revolves around the buying and selling of second-hand household goods over the counter, for cash. Arguably this is something its traditional competitors have been doing for centuries. What distinguishes Cash Converters from others in this field is their approach, which has been designed with one objective in mind: To attract a high-class clientele, be they sellers or buyers, and turn them into regular customers. The way the company went about this can serve as a lesson in innovative marketing and the utilisation of franchising at its best, cleverly rolled into one highly profitable concept.
Background
Cash Converters first opened its doors in Perth, Western Australia, in 1984 and currently operates over 550 stores in 23 countries. In South Africa, the company commenced operations in 1994, based on a master licence agreement with the Australian principal and already, over 60 franchises have been sold. During the past year, global sales of the group exceeded one billion Rand, with South Africa contributing a credible 130 million Rand. Richard Mukheibir, Managing Director of Cash Converters Southern Africa, is convinced that careful attention to three key areas, namely people, branding and systems, form the foundation of Cash Converters‘ success.
People
It has become fashionable among managers to claim that “people are our greatest asset” but at Cash Converters, much more than mere lip service is paid to this statement. By its very nature, the franchise requires a hefty investment, but to qualify as a Cash Converters franchisee requires a good deal more than a healthy bank balance. The company is looking for individuals with a sound track record and a clear vision of what they want to achieve in life. They must be good quality people with a strong orientation towards family and community. It has been found that in many instances, married couples make ideal franchisees. Continue Reading »
