I am a white woman who want to buy in a franchise. The only premises suitable to the franchise belongs to the local municipality, and is in a poor condition. I have made an offer to buy, but it has been rejected verbally, saying that they will only consider me if it was a BEE project. How can I achieve this BEE status, without giving away contol of the business, and how do I get into contact with preferred investors? If I am forced to go BEE, wil the government help with funding?

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coletteann
Posted 3 weeks ago

BEE is not measured only in terms of ownership – that is why BEE is now called B-BBEE meaning “broad-based” black economic empowerment. Empowerment is now measured in terms of 7 elements, being : ownership, management control, employment equity, skills development, preferential procurement, enterprise develoment and socio-economic development. Each element is scored out of a number of points on a scorecard, and the total score for all the elements then determines the Level 1 – 8 rating. This is applied to companies with an annual turnover of more than R 5m. Gavin is correct to say that any company with an annual turnover of less than R 5m will get “exemption” and an automatic Level 4 BEE rating, even if wholly white owned. If I can assist you with more information, to explain the meaning of the Levels etc, please call me on 083 454 2151.



Denvor Phokaners
Posted 1 month ago

You will need to ask the municipality exactly what they mean by their BEE requirement. I assume they want your company to be black owned. According to the BEE codes, a company with at least 51% black ownership qualifies as a black owned company. You will have to get yourself a black partner who holds 51% shares in the company. Companies that turn over less than R5 million automatically qualify for a level 4 BEE rating if the ownership is white however. If the ownership is black then the company will automatically qualify for a level 3 rating.

In order to get in touch with investors, make contact with Khula Enterprises or the IDC.



Vera Valasis
Posted 1 month ago

You may consider partnering with a black South African citizen, but this approach may not guarantee funding in any way. There are many franchise opportunities and I believe you should rather approach the franchisor of your choice first to find out what their site requirements are before you decide on a premises. Many franchisors have agreements with financial institutions and may be able to put you in touch with the right people.

Gavin_Tonks_facebook
Posted 1 month ago

You have BEE status if your turnover is under 5million per annum.

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