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do not want to be seen to compete with our franchisees by cherry- picking the key outlets." It makes business sense too: he estimates that having an owner- operator adds around 15 to 20 per cent to the turnover above what would be expected from a managed outlet. So Retsol's focus is upon increasing retail turnover. Some companies add to the royalties they receive by negotiating rebates and discounts from their suppliers, others by becoming manufacturers themselves. " We have been presented with tempting opportunities to go down that road, but we feel that to take revenue at both the turnover level and the cost of sales level would not be right. " We think we should help the franchisee maximise turnover. Both Craig and I have been franchisees ourselves and we know it is a constant issue when you see your franchisor taking a cut of turnover and also potentially inflating the price to make some money off the cost of sales as well. We want to distance ourselves from those practices in the marketplace," he asserts. With ice cream, health and fast food under its belt, Retsol turned its attention to that other classic franchise, coffee. It has not so far entered a head- to- head battle with Starbucks by opening a chain of Equatorial Coffee outlets in South Africa, though it does have one free- standing coffee shop in Botswana. Instead, it is offering the brand as a specialist add- on in the larger Ola Milky Lane, Juicy Lucy and Corner Bakery outlets until it has gained enough traction to justify further investment. The company's most recent venture was an agreement to The plan was to develop Ola Milky Lane as South Africa's leading retail ice cream brand and transform the traditional ice cream parlour into a fun, modern ' time out' destination. When the business was founded there were 75 outlets, now there are 110. " We have more than doubled the size of the business over the period so there has been strong organic growth," says Duncan. Franchisees can choose from three formats, normally located within existing malls or retail parks, from a sit-down facility with the full product range to a small mobile takeaway unit selling just soft ice cream. Retsol is also a big player in the fast food market; and chicken is South Africa's favourite fast food. Though the world market leader Kentucky Fried Chicken is also the dominant player in South Africa, home- grown brands have flourished and moved into the space behind. " We wanted to get into the mainstream, so we acquired Chicken King in 2006 and have been growing the brand steadily," says Duncan. One reason for Retsol's success is undoubtedly its collaborative business model. The relationship between a branded business and its franchisees is not always a happy one, as Duncan and Craig MacKenzie both knew from personal experience. They made some tough decisions at the launch of their business and have stuck to them: the first was to keep the business lean. The nature of franchising is that there are very few assets on the balance sheet, Duncan explains- the franchisees own the assets. " Some companies mix asset owning with franchising but we decided we didn't want to do that. We Retsol September / October 09 www. bus- ex. com 99 Goldline Industries is a leading market supplier of speciality kitchen equipment to the food service and hospitality industry. With a long- established reputation for quality products, and exceptional customer support, Goldline delivers flexible, value-driven restaurant equipment solutions to major customers in Southern Africa. A key feature of the Goldline business is our ability to deliver a ' one- stop- shop' service, including fabricated products and a complete range of restaurant equipment, sourced from other well-known manufacturers and global suppliers. Goldline Industries is the ideal partner for restaurant chains with plans for rapid expansion and we can provide exceptional support from the initial ordering process, to special purpose equipment requirements and installation. Our after- sales service includes 24/ 7 specialist technical support with approved sub-agents in most major cities around the country. Goldline Industries