Green Franchises: What you need to know about buying green
According to the Environmental Business Journal, a publication which provides strategic information and market forecasts for business, green businesses have been growing at a rate of approximately 5% annually over the last three years. So, while many industries have experienced slow-downs during the recession, the gradual expansion of green businesses could provide entrepreneurs with business opportunities. Those looking for the support and expertise of a franchise, rather than going it alone with a green startup, could consider investing in a green franchise.
What is a green franchise?
Green America, a not-for-profit organisation promoting green business principles, defines a green business as one which adopts principles, policies and practices which reduces impact on the environment, and which improves the lives of communities. A green franchise, therefore, is one which makes use of environmentally sound technology, adheres to best practice when it comes to lessening impact on the environment through its business activities, and addresses a market need by providing environmentally friendly products or services.
The Benefits of Being Green
Green franchises have several advantages over their non-green counterparts:
- Attention from the media – public relations campaigns with a green angle stand a better chance of garnering column inches
- Growing market – Green franchises appeal to an increasing number of environmentally conscious consumers
- Tax breaks – to encourage South African companies to go green, several tax incentives have been introduced, including tax breaks for reducing greenhouse gas emissions and increasing energy efficiency (See Income Tax Act No. 58 of 1962, Chapter II: The Taxes, Part I: Normal Tax, 12k: Exemption of certified emission reductions).
Buying a Green Franchise
As with any franchise opportunity, selecting a green franchise is not a decision to be taken lightly, so make sure you do your homework before signing up. Ask yourself:
- Is the franchise a bona fide green franchise? Protect yourself from ‘greenwashers’ (see below).
- Does the franchise make sound business, as well as environmental, sense? Remember, you will need to turn a profit, as well as being an eco-campaigner.
- Are you truly passionate about the area of business in which the franchise operates, or are you just looking to make a quick buck? To be successful in any industry requires a genuine love for and interest in the business.
There are a good many companies out there falsely claiming to be green, eco-friendly or sustainable businesses. This is known as greenwashing. Using this checklist, see how the franchise matches up to its green promises:
- Does the franchise hold any accreditation from an authorised body, for example, The Green Building Council of South Africa?
- Is the franchise Carbon Neutral Approved, in accordance with the Greenhouse Gas Protocol and the Carbon Protocol of South Africa?
- Do the franchise’s buildings comply with the new National Building Regulations and Building Standards Act 2008, which require more energy-efficient buildings?
- Does the franchise measure their carbon footprint, manage their greenhouse gas emissions and take part in the Carbon Disclosure Project annually?
- Does the franchise make use of energy efficient appliances in production, service delivery and in administering the business?
- Is the franchise socially and environmentally responsible in sourcing, manufacturing and marketing their products and services?
Certification of Green Business
In South Africa, the Heritage Environmental Management Company provides third-party, independent, industry and sector-specific certification programmes, in accordance with ISO standards, the Green Globe International, the International Hotels and Environmental Initiative (IHEI) and Audubon International.The Eco-choice Eco-labelling system provides certification for manufactured products.
Green Franchise Opportunities
Keep an eye out for green business opportunities in the following areas:
- Landscaping and garden services and home and office cleaning franchises which use environmentally-friendly products and methods
- Eco-friendly car wash franchises
- Green restaurants which use organic food, efficient energy sources and sustainable waste disposal
- Organic food production
- Home improvement franchises, for example those which retro-fit houses with green technology like solar water heaters and solar geysers.
To investigate the ins and outs of green business in South Africa, consult the Financial Mail’s Guide to Green Business in Southern Africa or the Green Business Guide.