The story of George Senosha, the first black franchisee of Pick n Pay, paints a vivid picture of resilience, innovation, and social impact within the franchising world. George’s journey is a case study in overcoming systemic barriers, leveraging community strength, and driving transformative business practices. So, is owning a Pick n Pay franchise worth it?
Let’s explore the challenges, opportunities, and lessons drawn from George’s experience.
The Challenges of Pick n Pay Franchising
Franchising with a major brand like Pick n Pay often appears as a golden opportunity, but George’s journey highlights key challenges that potential franchisees should consider:
- Limited Ownership and Autonomy
Many franchisees feel they are “farming on someone else’s land.” The franchisor dictates operations, which can stifle creativity and limit control over key decisions. - Systemic Discrimination
As a black entrepreneur, George faced significant resistance when proposing to open stores in underserved communities. Corporate leadership was sceptical, reflecting broader systemic issues in the franchising model. - Financial Exploitation
Despite running a successful store, George encountered unfair valuations when trying to sell back his franchise. This highlights a potential downside: some franchisors undervalue franchisee contributions, which could impact profitability.
Community-Centric Business: A New Model of Success
George’s approach to franchising went beyond profits—he transformed retail into a tool for uplifting communities. Here’s how:
- Empowering Local Farmers
By sourcing produce from 180–200 emerging farmers, George integrated local agriculture into his supply chain. This not only supported local economies but also built strong ties with suppliers. - Collaboration with Taxi Associations
Partnering with taxi associations for logistics and marketing helped create a robust grassroots network, turning local challenges into collaborative opportunities. - Philanthropy with Purpose
George invested in youth and education initiatives, distributing school supplies, supporting orphanages, and ensuring dignity through projects like providing sanitary products.
These efforts highlight how socially responsible practices can elevate a franchise’s brand and customer loyalty.
Innovations in Retail Strategy
George redefined what a Pick n Pay franchise could look like in township settings. His innovations provide a blueprint for retail success in underserved markets:
- Tailored Product Offerings
Recognising local preferences, George introduced traditional foods and culturally relevant items, proving that localisation is key to retail success. - Customer Education
He educated customers about the quality and value of no-name and private-label brands. This built trust, loyalty, and a more informed customer base. - Cultural Integration
By allowing local artists to perform and sell music outside his store, George created an inclusive shopping environment, blending commerce with community culture.
Lessons for Entrepreneurs
George Senosha’s journey offers invaluable lessons for anyone considering a franchise, particularly in challenging markets:
- Understand Your Market
Tailoring your offerings to meet local needs is crucial. George’s success in introducing culturally relevant products underscores the importance of knowing your customers. - Social Responsibility Builds Business
Supporting communities isn’t just altruistic; it drives loyalty and long-term success. George’s philanthropic efforts made his store a respected community hub. - Persistence and Advocacy Pay Off
George’s firm stance during corporate negotiations—despite systemic resistance—shows the power of persistence in advocating for fair treatment. - Think Beyond Profits
For George, franchising was more than a business; it was a legacy. Entrepreneurs should prioritise creating lasting impact over short-term financial gains.
Is a Pick n Pay Franchise Worth It?
For aspiring franchisees, the answer depends on your priorities and approach. While George’s story reveals significant systemic challenges within the Pick n Pay franchise model, it also demonstrates that success is possible with resilience, innovation, and community focus. If you’re willing to tackle the structural hurdles and commit to community-centred practices, a Pick n Pay franchise can be more than just a business—it can be a platform for social change.
However, if autonomy and financial independence are your primary goals, you may need to weigh the limitations of franchising against other entrepreneurial opportunities. As George Senosha’s journey shows, the road is not easy, but the rewards—both personal and societal—can be profound.
Is Pick n Pay a Franchise Worth It? Quick Facts to Consider
Why Did Pick n Pay Close 24 Stores Recently?
Pick n Pay has been implementing a turnaround strategy to address its poor financial performance. This includes shutting down 24 supermarkets (10 corporate and 14 franchise stores) that were underperforming. CEO Sean Summers explained that these closures aim to avoid burdening franchisees with unmanageable debt.
How Does Boxer Compare to Pick n Pay?
Boxer outperformed Pick n Pay during the most recent reporting period:
- Boxer sales grew by 12%, supported by strong like-for-like sales and the opening of 12 new stores.
- Pick n Pay sales, however, declined by 0.3%, with even South African sales increasing by a modest 0.1%.
What Are the Costs of Opening a Pick n Pay Franchise?
Starting costs vary depending on the store type:
- Express Store (e.g., petrol forecourt): R2-million.
- Large Supermarket: R12-million.
Smaller stores cost less due to a smaller footprint and lower stock investment, making them a potentially more affordable option for new franchisees.
Are Smaller Local Stores Thriving Post-COVID-19?
Yes! The pandemic saw a surge in demand for neighbourhood convenience stores. Pick n Pay’s smaller franchise stores benefitted from customers wanting to shop closer to home. Many franchisees introduced innovative services like:
- Drive-through pick-ups.
- WhatsApp orders.
- Email or phone collection services.
What Makes Franchising on a Forecourt Attractive?
Retail partnerships with fuel stations, such as Pick n Pay’s collaboration with BP, offer prime locations. The costs for a forecourt store range between R2-million and R4-million, providing a unique opportunity to capitalise on steady foot traffic at petrol stations.
How Did COVID-19 Impact Grocery Franchises?
While COVID-19 hit many industries hard, grocery stores remained resilient due to:
- Essential item stocking (food, cleaning products, sanitising materials).
- Increased household grocery spending during lockdowns.
This trend has also fuelled growth in smaller, locally focused stores as customers prioritise convenience and safety.
What Are the Risks for Pick n Pay Franchisees?
Potential franchisees should be cautious of:
- Poor Brand Performance: Pick n Pay’s trading update predicts an increase in losses per share (30%-40%).
- High Initial Costs: Significant upfront investment, especially for larger stores, may be challenging for smaller entrepreneurs.
- Limited Autonomy: Franchisees must adhere to strict operational guidelines, limiting flexibility.
What Are the Opportunities in Underserved Communities?
George Senosha demonstrated that underserved areas offer untapped potential. Tailoring products to local needs, collaborating with communities, and educating customers can turn these markets into profitable ventures.
Is Boxer the Future of Pick n Pay?
With its consistent growth and expansion into new markets, Boxer is becoming the stronger brand in Pick n Pay’s portfolio. The planned conversion of 70 Pick n Pay stores into Boxer outlets reflects this strategic shift.
What Should You Consider Before Investing in a Pick n Pay Franchise?
- Financial Viability: Can you handle the initial and ongoing costs?
- Location Strategy: Is the market you’re entering profitable and sustainable?
- Community Engagement: How will your store meet local needs?
- Brand Stability: Are you confident in the future of Pick n Pay under its turnaround strategy?
The Bottom Line
While a Pick n Pay franchise offers brand recognition and a centralised supply chain, challenges such as high setup costs, limited autonomy, and recent financial struggles must be carefully considered. However, for those willing to innovate and integrate with their communities, it could still be a worthwhile investment—especially in smaller, underserved markets or through partnerships like forecourt stores.