The fledging domestic retail giant, Choppies, has put to rest fears that the company could be harbouring thoughts of reneging on last year’s promise of bolstering the domestic bourse by floating some of its shares. The fears emanated from last week’s advertisement in the press announcing that Choppies Group of Companies had established a franchise division and had started to offer franchises. The move was met with skepticism, as it was thought to be the Group’s newly found strategy of raising capital.
The Group’s Secretary, Sadique Kebonang, cleared the possible confusion this week.
“We are certainly listing,” he assured the public in an interview.
He said the listing seemed to be taking long because they were still in the process of ensuring that they satisfied all the Botswana Stock Exchange listing requirements.
He said the decision to form a franchise division was borne out of a quest to empower citizens.
“The idea of a franchise was informed by increasing interest from the general public to do business with Choppies,” he said.
Central to the idea, he said, was consideration that small business operators always cried foul that the Choppies stores presence tended to suffocate them.
“Small businesses were seriously complaining. They said wherever Choppies set up, their collapse was imminent. But the franchise idea is not to close out anybody, we want to form smart partnerships,” he explained.
By partnering with Choppies in a franchise format, Kebonang said the investors would be able to leverage on the Groups established brand, reputation and purchasing power. There would be a number of considerations taken into account before issuing a franchise, such as the population size and the area of the shop. Depending on those conditions, the franchise would be selling in the range of P300 000 to P2 million. He revealed that during the course of this month, they would be receiving applications before the elimination process resumes sometime next month.
He would not divulge the nature of the franchise in detail, saying “more details will soon be revealed to the press”. Asked whether the franchisee would not be affected should they finally list as they would be trading under the same banner, he said the franchise would run under a different brand with unmistakable presence of Choppies.
“Even though the brand would be different, you would still be able to tell that it is a Choppies store,” he explained.
He was optimistic that the franchise would come in handy to those who have not been running fully fledged stores because they would be using the marketing influence and receiving the Group’s technical expertise. On whether the Group had created enough room for competition after taking almost the entire country, Kebonang said there are still a lot of growth points. Currently, Choppies has swamped the country with 43 stores and has created employment to over 4000 people.
“The intension is not to compete with the franchisees. We would be opening our last three stores next month,” he assured, adding that the stores have long been in their plans. The last batch would be set up in Kanye, Gaborone at the Station and Broadhurst.
His projections are that the franchise division would yield in excess of 3000 jobs. He further said the initial franchise offering would be limited to the domestic market only. The Group has in the past announced its ambitions of venturing into the regional market.
And regarding the regional market, Kebonang said they are still studying the results of the site visits they made to countries like Zambia and Namibia.
“We are still looking at whether we should go there and set up shops or offer franchises. There are other issues like culture and understanding the markets that we have to consider,” he explained.
Should they offer Choppies franchise, he said they would operate like other big South African chain stores, which operate subsidiaries in other countries but having headquarters in South Africa. So they would have the headquarters in Botswana. Choppies has also expressed interest of rivaling other retail stores in the competitive but large markets of South Africa and Angola.
Choppies is by far an epitome of successful citizen venture. It first started in Lobatse as a tiny supermarket called Wayside in 1986 before blossoming into a giant retail brand. In 2003, Wayside Supermarket gave birth to Choppies, which saw tremendous growth through aggressive market penetration by way of acquisition and setting up new shops in most parts of the country. The company has, in small ways, been empowering citizens by housing their butcheries in some Choppies stores.