Franchising has proved, over the years, to be one of the most successful ways of conducting business. In both developedcountries and emerging markets, franchising has been effective
in ensuring business growth with private ownership and skills transfer. It has generated new incomes and standards of livingfor its population.
More specifically, for new businesses/ start-ups and SMEs, franchising can be viewed as a means of nurturing and developing entrepreneurial talent, promoting good corporate governance and transparency and attracting the informal sector business to the formal sector, using certain contractual terms used in franchise agreements.
The analyses and point of view presented in the report have been validated through extensive discussions with industry players. We take this opportunity to thank the industry players for
making this endeavour possible.
Nigeria is a country with a great entrepreneurial spirit, as evidenced by the presence of 37 million enterprises, with approximately 64,000 businesses being registered annually. An estimated 80% of these new businesses, however, fail within the first five years, due to lack of business planning, enterprise management capacity issues and other environmentally related factors. According to research carried out by the African Development Bank, only fifteen percent of franchised small and medium enterprises fail, compared to the 80 percent
failure rate among other independent businesses.
The consumer-class in Nigeria is growing at a rapid rate. By 2030, it is estimated that some 160 million Nigerians (out of a projected population of 273 million) could live in households with sufficient income for discretionary spending. Sales of consumer goods are, therefore, estimated to more than triple by then, to USD365, 548.4 million.