The franchise acquisition of Shoprite: A model for business development

By Joseph Akyeampong Esq

In the Daily Graphic of 17th December 2025, a report by the Business Desk calmed the nerves of most shoppers who are accustomed to shopping at Shoprite, the South African retail giant since it opened in Ghana. The import of the story is that, following the exit of Shoprite from Ghana in November 2025, all the seven stores which were hitherto operated by Shoprite have been acquired by Brands For All.

The part of the story which generated excitement was the entry into a franchise agreement by Brands For All with the French retail giant, Carrefour to assume the running of Shoprite stores under the branding of Carrefour. This means that, upon the formalisation of the franchise agreement, all Shoprite stores in Ghana would be branded as Carrefour. This would mean that Ghanaians would have the opportunity of sampling the world class experience of shopping in Carrefour stores with the attendant excitement and good feelings that it generates.

It would also mean that, though the stores would legally be owned by Brands For All, everything about the operations would be done as if the stores are owned by Carrefour.

It is worthy of note to mention other business models like licensing, farm-in, equity participation, mergers and acquisitions that can also be deployed successfully to scale up the efficiency of existing companies. While the other models like farm-in, equity participation, mergers, acquisitions etc may have the effect of substantially transferring the ownership of an existing business, a franchise has the effect of keeping the business in the hands of the owners without the prospect of the loss of managerial control.

According to Charles Hill and William Hult, franchise is a special form of business arrangement where the franchisor (the business under whose banner the franchise is granted) sells an intangible property which is normally a trademark to the franchisee (the business owner) with the insistence that the franchisee abide strictly by the rules by which it operates under the banner of the franchisor.

What does operating under a franchise involve?

Franchise is long standing and dates back to as far as the Middle Ages and ancient China. However, it is acknowledged that franchise in the modern era started with the US Statesman Benjamin Franklin from around 1731 when he entered into a franchise arrangement with Thomas Whitmarsh for the provision of printing services in Southern Carolina. It is generally the case that operating a franchise is like a business operating as a branch of a bigger business but run as an independent entity from the larger business. Consequently, a franchise operates as a partnership between the franchisor and the franchisee with laid down procedures to be followed. The procedures will require the franchisee to use the brand name, operating systems and adopt all other trappings and attractions of the franchisor in its operations.

The franchisor in turn provides training support and agrees for the use of its operating systems in the business of the franchisee.

In return for granting a franchise, the franchisor is entitled to “royalty payments” which is calculated on the overall sales revenues which is generated from the franchisee’s operations. However, before the formalisation of the franchise arrangement, a franchisee may be required to make upfront payment to the franchisor.

Unlike licencing which is another strategic business alliance model and involves the transfer of technology and is predominant in manufacturing, franchise is mainly dominant in service industries. The US is recognised as the most dominant country for franchise operations with the restaurant chain, McDonalds being the most dominant franchise operator with over 40,000 franchise operations in different countries. Other franchise operations are KFC with about 30,000 operations in about 145 countries, Subway, a restaurant chain whose franchise ideology is anchored on the concept of “build your own”, UPS, Two Men and a Truck with 48,000 franchises, RE/MAX, a real estate conglomerate and others.

It is estimated that in the US, over 850,000 business units have developed out of franchise agreements and making returns of nearly a trillion dollars to the US economy annually. Most franchises can be found in the distribution and service industries worldwide, particularly in areas such as merchandise distribution, hotel operations, automobile servicing, fast food chains etc.

The face of the new Shoprite shops after the franchise

To the dedicated customers of Shoprite relishing in the euphoria of shopping in a serene ambience, it is important to draw attention to the fact that, upon the total implementation of the franchise agreement, Shoprite shops will be branded in the colours of Carrefour with the complete adoption of its operating model. Though in actual fact, Shoprite shops are now owned by Brand For All, it will not have its imprint stamped on the operations of the shops but rather have the imprint of Carrefour. Patrons of Shoprite should rest assured that there will no diminution in the brand quality of Shoprite which they were previously accustomed to but will enjoy the brand quality of Carrefour which is equally good a brand as Shoprite.

An important lesson from the franchise acquisition of Shoprite by Brand For All is the encouragement to would be entrepreneurs to seek franchise relationships with already established businesses. This is because a franchise creates an opportunity for a start-up or small business to progress very quickly on the business ladder. Also, established businesses which do large business with foreign companies by selling their merchandise can seek franchise relationships with them. This is for the reason that a franchisee

buys into a successful business model and actually shares in the goodwill that the franchisor has already established.

Areas of consideration for creating franchises in Ghana

Although franchise as a business model in Ghana is not popular, nevertheless, few franchises have been established in Ghana. Previously, the plush Holiday Inn Hotel, now Palms Hotel at the Airport City in Accra operated under a franchise from the parent company of the Holiday Inn Group in America. Likewise, Tulip Hotel at the East Legon Residential Area in Accra similarly operated under a franchise granted by the former Golden Tulip Hotel, now Lancaster Hotel.

Numerous franchises could be created especially in the consumer goods and fast food sector with government support to build up local entrepreneurial capacity. For example, an indigenous fast food company like PapaYe could create about 300 franchises across the country through a systematic programme backed by the government with generous incentives. It could grant franchises to catering graduates from technical universities in groups of about 3-5 to set up small to medium franchises across the country. In Accra and Tema alone, a number of fast food franchises could be created in strategic working class locations and also at petrol stations.

Also, a consumer goods company like Unilever and PZ Cussons could create franchises all over the country for young university graduates to market their products, likewise the breweries and pharmaceutical companies like Ernest Chemists, Tobinco etc. Furthermore, automobile companies like Toyota, KIA and Rana Motors could create franchises with groups of engineering graduates who could be propped up to set up small vehicle showrooms in the regions and districts which could display about 5-7 vehicles at a time with facilities for servicing.

Towards this end, a special revolving fund could be set up by the government to provide capital for young graduates to set up franchises. The government could co-ordinate the setting up of local franchises through a special unit at the Ministry of Trade, Agribusiness and Industry with generous incentives granted to the franchisors and the franchisees. Also, a company like Melcom could grow about 300 franchises in Ghana within a reasonable space of time to cut down on unemployment among young graduates.

Conscious efforts could also be made by already established local entrepreneurs in the retail and distribution trade particularly, to seek franchises from their foreign partners. This is due to the fact that most foreign businesses are often wary of establishing outlets in foreign countries as a result of lack of knowledge of the local terrain and cultural differences etc. A prominent local A-rated hotel operator could also seek a franchise arrangement with a reputed foreign operator to set up a hotel chain and guest lodges in our major tourist cities like Cape Coast, Kumasi, Tamale etc. with government support.

The benefits of Franchise

Melena Yanos, who holds the title of Dean of WorkForce Instruction at North Seattle College and a business development consultant in an article titled ‘‘Franchise Opportunities for Young People’’ stated the benefits of a franchise as a franchisor having climbed up the learning curve and ready to share all the business success it has discovered in the industry with a start-up or a franchisee. This is because, the franchisor has developed the marketing, training, operational systems, the brand and the marketing tools which it shares with the franchisee. Some of the direct benefits that a franchise confers on a franchisee is the sharing in a well-developed business system of the franchisor, the benefit of managerial training and support, a brand name appeal, standardised business support, financial assistance, mentorship etc.

In the US for example, most franchisors have set up training centres for training franchisees in their operational methods thus contributing to efficient management practices. Mc Donald’s franchisees spend time at its training centre in Illinois where they undergo essentials of learning Mc Donald’s operations.

Prospects of franchise in Ghana 

Though franchises are offered for a fee, it might be a good business opportunity for alleviating graduate unemployment in Ghana. It also offers a veritable way of building up the entrepreneurial capacity of new and young entrepreneurs and gradually ease them into the business terrain.

The prospects of franchise operations in Ghana hold good. This is because the country has good laws on intellectual property and there is no prospect of franchisees infringing on the intellectual property rights of franchisors.

It will also ‘‘domesticate’’ the economy and prevent a dominance of the economy by foreign business interests with its attendant capital flight while creating meaningful strategic alliances between local and foreign businesses. It would therefore be helpful to the nation if the government could consider it seriously and give it the needed attention.

The writer is a lawyer and the Principal of Akyeampong & Co, Corporate and International Business Attorneys with special focus practice in Commercial, Corporate, Banking, Finance, Insurance, International Business, International Trade, Intellectual Property and Mining Law.

Email:   [email protected]

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