30 April 2004
Shoprite Holdings and the Department of Trade and Industry’s Khula Enterprise Finance have signed a groundbreaking agreement to grant a limited number of retail franchise concessions, back by outfitting, training and mentoring support, to black entrepreneurs.
The agreement, signed in Cape Town on Wednesday by Shoprite chief executive Whitey Basson and Khula managing director Xola Sithole, will grant successful small business (SMME) applicants a number of OK Franchise concessions on negotiable terms.
OK Franchise and Khula will provide dual guidance in terms of outfitting, training and mentoring the SMMEs in a deal that promises to deliver maximum viability for the new businesses.
Shoprite and Khula will also share the capital investment and risks associated with promoting the black economic empowerment (BEE) initiative, with Khula providing loans to concession holders to acquire equipment and furnish their stores.
Shoprite, for its part, will supply stock without soliciting securities from concession holders, especially on the first stock consignment.
“The issuing of a limited number of franchises by Shoprite will serve as the initial pilot project on whose successes and lessons the future expansion of this project will rest”, Basson said.
“The strategic importance for SMMEs lies in their access to retail space in Shoprite’s multi-national retail chain.”
Sithole said partnership with Shoprite would be a model for future partnerships between government agencies like Khula and the private sector for addressing the economic challenges facing the country.
Khula, he added, would be launching similar joint venture initiatives across different industries such as mining and petroleum.