Investment Lessons From The Rise of Modern Farm Franchises in Nigeria
Chiagozie is the Founder and Managing Consultant of Franchise Business…
Any country with a population of over 170 million inhabitants should be a viable market for small businesses and thousands of franchises! Sadly, this assumption does not necessarily hold true in Nigeria, due to some factors.
On face value, franchising does not make a lot of sense in a marketplace, where the concept is alien. And with farmers being among the most fiercely independent people in the world, there was no need for franchising two decades ago – or so they assumed. However, with an increasing part of the market for farm products requiring value-added approaches, franchises have found a foothold in the Nigerian farming industry due to the increased need for collaboration, coordination, risk sharing and other factors.
Some people say that franchises aren’t much different from signing a supply contract with a big company, but that overlooks some of the benefits to franchisees within some of the better arrangements. FBDS (Franchise Business Development Services) Nigeria’s pioneer franchise development services provider, offers extensive training to the franchisee in areas like operations, technical details, management and product knowledge. Applied to agriculture, it could include training of agricultural workers, human resource help, an extension of production and marketing knowledge, branding of products and so on.
As the agricultural marketplace changes to reflect more value-added opportunities and innovation, some entrepreneurs have figured out a way to balance the independent nature of farmers within a franchise arrangement that provides the benefits of a larger corporate entity.
Ever wondered why Babban Gona excelled in farm franchising? Have you considered the Farmcrowdy concept? Or the recent Pork Money market? You will notice a trend of productivity and expansion. Why farm franchising? Let’s take a cue from these three.
The Babban Gona Franchise Model
Babban Gona Agricultural Franchise grew 16 farmer franchises to over 2000 franchises in less than a decade. The company operates Franchised Farmer Groups for easy financing. And also provides tailored and cost-effective end-to-end professional training, input, credit and marketing services to these groups, leading to high productivity and more benefits. Members of Babban Gona attain optimal levels of productivity and product quality while minimising negative environmental impacts. They also get access to Babban Gona market services that assure good warehousing practices, access to good markets and increased profits. This model has been viable due to the training models developed by the company. It ensures that the franchisees follow the laid down approach to get results.
The Farm Crowdy Model
At least 1000 people search for the term ‘Farm Crowdy‘ on Google monthly, and 172,000 results are available for these searches. Until 2017, the company’s farming approach was only known to a few. The business skyrocketed after it attracted foreign fundings. This agric-tech platform connects farmers with farm sponsors for the purpose of increasing food production in Nigeria. Isn’t this an easy model for everyone to be part of a business? With the ‘farm in your pocket’ app, farming has just got more interesting. More partners come on board regularly, and all the available investments are sold out at the moment.
The Pork Money Model
Less than a year in business, the Pork Money concept has become viral. Leveraging on the data that at least 40% of the world’s meat consumption is pork, Pork Money is changing the farming scene in Nigeria – nay in Africa. From production to marketing, the company offers extensive services and also partners with investors to make the vision a reality. Like Farm Crowdy, Pork Money promises high returns on investment for partners. The difference here is that it solely takes care of the farming, production, processing and marketing of the just pork.
While we love the successes of these farm businesses, franchising is way more than that. Statistics show that there are Thirty-seven million enterprises in Nigeria, and 64,000 registered annually, 80 per cent of these enterprises are prone to failure within the first five years. Thus, becoming imperative for franchising to thrive in all industries. The enterprising qualities of Nigerians cannot be underemphasized, from the ‘Okada Man’ who is his own boss to the ‘Cake Maker’ who sells on Instagram, it’s all centred around the goal to survive and work. Unfortunately, most of these businesses fail! Franchising is a tested and proven business model with just 15% failure rates globally and 5% in South Africa. Are you new in the business industry? Do you desire to duplicate an existing and proven business model? Are you looking forward to owning a good business after retirement? A good franchise is all you need! Want to know more? FBDS, the pioneer franchise development company in Nigeria, is here to guide you through the process.