The Money Makeover journey is a few short weeks from done and the contestants have learned some hard lessons.

If you haven’t started already, catch up and follow six ordinary South Africans as they take up the City Press/Absa Money Makeover Challenge and undergo a money makeover boot camp. During the six-month competition they test their resolve and make tough decisions on every aspect of their finances.

Each candidate has been allocated their own Absa financial adviser who assists them in organising their finances and reaching their personal financial goals. Along the way for those who stick to their money plans there are incentive prizes and the chance to win the big investment prize.

This is the fifth in a series of six video Q&As that offer you the chance to ask your questions and learn from our contestants. To do this we tap into the Absa experts to help our candidates with any issues they may be facing that are also relevant to our followers.

This week Maya Fisher French and her guest, Abigail Makhubele, Absa’s National Business Development Manager for Consumer Services, talk franchises – the pros and cons, how to finance it and what you need to know going in. There’s so much to talk about it is in two episodes.

For Sanet and Marius their foray into buying a franchise didn’t deliver on their hopes for it. In the first part of this episode, Money Hacks - Pros and Cons of Buying into a Franchise, Makhubele explores what questions would-be franchisees should ask as well as stacking up the pros and cons. In part two of the episode, How to Finance a Franchise, they discuss the money.

Buying a franchise: A cautionary tale

Like many people, contestant Sanet and her husband Marius saw owning a franchise as a way to earn some extra cash.

The figures provided by the franchiser claimed they could make money, and friends who had eaten the waffles at a local market attested to the fact that they were a great product. On this basis, the couple took out a personal loan for R200 000 to purchase the food truck, with a monthly repayment of R7 000. The contract committed them to a monthly R5 000 franchise fee. This meant the first R12 000 of turnover from the food truck went straight to the franchiser and loan repayment.

When Absa financial adviser Pieter Myburgh and Makhubele looked at the business, it was clear the couple could not realistically meet the required figures. Find out how here how they helped put it right here.

A good franchise can be a great business, but you need to do your homework and understand the commitment required.