Johannesburg — SA's FRANCHISE sector created 67000 jobs and its turnover rose 37% to more than R256bn in the past two years, showing the sector's potential to put a dent in the country's unemployment figures, an expert in franchising said yesterday.

But a director of Franchize Directors, Bendeta Gordon, described as disappointing the government's response to taking advantage of opportunities provided by franchising to meet its goal of cutting unemployment and promoting black economic empowerment.

Wider access by those who could contribute to knowledge and training about franchising was lacking, though groups such as Standard Bank, which sponsored the survey, and the Industrial Development Corporation were playing their part, Gordon said.

"Franchising is a world-proven model that can work to bring down unemployment and I think the government has been rather slow to focus on the potential that this sector has to create jobs and as a tool for empowerment," Gordon said.

Stats SA projects that the expanded jobless rate, which includes people who have not looked for work in a month, is 29%, but economists have put the figure at 40%. This was recently challenged by Finance Minister Trevor Manuel .

Yesterday, Gordon presented the results of a survey carried out by her organisation on the status of the franchise sector. The results showed that turnover rose to R256,5bn in the past two years, while its contribution to gross domestic product stood at 12,57%.

During the survey period, 26 new franchises were established in the office and home services sector, 22 in retail, 12 in the restaurant business, while the real estate, health, beauty and body culture sectors had 11 new franchises.

Franchisees employ more than 460000 people , mostly in the fast-food sector .

"One of the remarkable findings is the low failure rate of 3%, which is in line with the international average," Gordon said, attributing the success of franchises to the support structure franchisees received from the franchisor.

The fact that most of the franchises were owner-run and managed meant there was hands-on management of the business, with some operators literally "managing the till", she said.

Despite the many challenges facing the sector, which included limited support, skills development and the need to be financially adept, franchising was highly sustainable and represented "free market capitalism at its best", she said.

Gordon said although the survey had been carried out before economic conditions worsened, there was evidence that small and medium-scale businesses could adapt easily to changing circumstances, and had more flexibility when it came to cutting costs without compromising service standards.

"Franchisors should be viewed as captains of the economy. Through their systems, franchises facilitate the creation of businesses and entrepreneurs who in turn create employment opportunities. Most importantly, they have proven that these mechanisms are sustainable.

"The sector's ongoing and growing contribution to employment and economic growth is remarkable and demonstrates the importance and value of this sector."

Gordon said the government and the business sector should redouble efforts to help aspiring entrepreneurs enter the sector, through awareness and training programmes.

The head of small and medium business, branch and business banking channels at Standard Bank, Louis van Ravesteyn, said the survey showed that the franchising sector was enjoying healthy and sustainable growth, in addition to playing a key role in addressing challenges such as promoting the growth of the small and medium enterprise sector and black economic empowerment.

"This survey provides valuable insight and knowledge to assist us in delivering further on our commitment to assist players in the sector to grow into economically viable industries," he said.

Franchising was the future for SA, Gordon said, and the 2010 Soccer World Cup provided additional franchising opportunities.