BusinessTech recently reported on the eight franchising opportunities open to South Africans who were looking to spend R1 million or less.
While there are definitely more than eight opportunities in this price range, the real franchising sector sweet spot scan be found in the R1 million – R2 million range, with recognised brand names in strong sectors (such as fast-food) becoming more readily available.
According to the Franchise Association of South Africa (FASA), over the past four years the franchising sector has displayed resilience, consistently growing its contribution to the country’s GDP from 9.7% in 2014 to its most recent contribution of 13.3%.
BusinessTech looked at 10 franchises you can open for less than R2 million in South Africa.
Matrix Warehouse from R1.35 million
Matrix Warehouse’s franchise support team use their extensive franchising and industry experience to guide franchisees in the running of their businesses.
The comprehensive franchisee introductory training conducted over 28 days at the Matrix Warehouse head office covers all aspects related to running a successful Matrix Warehouse outlet, including product training, business management and marketing techniques.
The franchisor also bulk buys stock from local and international suppliers and passes the benefit of its group purchasing power on to the franchisees.
Timbercity from R1.6 million
For over 40 years Timbercity has been the market leader in its field of expertise.
In addition to the benefits of being a Timbercity Franchisee, it also offers the following as part of the package:
- Product focus – Expert knowledge and focus on core product categories related to cabinetry, carpentry and hardware. These include: Timber, boards, shelving, worktops, doors, kitchen hardware & accessories, mouldings, paint and coatings.
- Expert Services – Proven track record for offering cut shop related services such as cutting, edging and hinge hole drilling as well as computerized cupboard design & layout, board cutting optimization, quotations and deliveries.
- Business expertise and best practice sharing – Over 40 years of financial, marketing and operational experience available through a professional Support Office team.
- IT high-performance systems – Access to up-to-date product files and point of sale systems.
- In touch and on call – Access to a support team every working day and participation in regular regional meetings and national conferences
- Southern African Reach – Numerous stores across South Africa and now expanding into Namibia, Botswana, Mozambique and Zambia.
Levingers from R1.2 million
The Levingers support team provides business support, quality service, processing and sales, and marketing tools.
All Levingers team members complete a comprehensive training programme to equip them to run an effective and profitable operation. Ongoing training is provided on an ad-hoc basis to ensure that franchisees stay abreast of industry trends.
The franchisor employs area-specific marketing and through their localised marketing initiatives, franchisees are able to target specific growth opportunities in their area while leveraging off the wider Levingers footprint.
Domino’s Pizza from R2 million
Domino’s pioneered the pizza delivery business, and sells more than one million pizzas daily worldwide.
It currently has almost 11,000 stores in over 70 markets around the world. In South Africa, that number has grown to 50 in Guateng and the Western Cape.
This franchise has a caveat as currently Domino’s Pizza in South Africa is primarily an internally-based franchise organisation. This means that those interested in franchising should contact the Franchise Development Team, who will contact you if an opportunity becomes available.
Maxi’s from R1.9 million
Owned by Taste holdings, Maxi’s has kept franchisees and customers happy by offering a welcoming Maxi’s store environment for over 25 years.
Setup fees include building costs, equipment, joining fee and training
In 2018 it launched a new contemporary image for the brand including a brand new store build.
Mochachos from R1.9 million
The investment required for a Mochachos franchise will vary, depending on the size and condition of the premises available for rental.
A sales representative will be able to give you a cost breakdown based on average store costing but an accurate assessment will only be available once its specialised in house development team has conducted a site inspection.
Each application will be evaluated individually; however the basic criteria are as follows:
- Previous food service experience is beneficial.
- Owners are expected to operate the business themselves.
- An understanding of how franchising works.
- Available capital to setup the business.
- A positive attitude and good people skills.
- Not afraid of long hours and hard work.
- Understands the importance of customers.
- Works well under pressure.
- Systems and procedures orientated.
- An understanding of local markets and people.
- Excellent communication skills.
Alpha Pharm from R1.2 million
Since March 2016, Alpha Pharm has been steadily rebranding its franchise shareholder stores, upgrading the new corporate direction aimed at offering the independent pharmacy the following:
- A clean new design feel that communicates strength, surgical cleanliness and the association with Alpha Pharm.
- Maintaining and building the individual identity of the individual shareholder store.
Franchise applicants must either be a registered pharmacist or be willing to employ a responsible pharmacist. Applicants may not have any affiliation with other pharmacy franchises and must be willing to enter into a wholesale account with Alpha Pharm.
Cash Crusaders from R1.96 million
From its humble beginnings in 1996 and 21 years’ experience in the industry, Cash Crusaders has a footprint of over 210 stores in Southern Africa, collectively producing turnovers in excess of R1.8 Billion per annum.
“We equip our Franchisees to be successful by providing them with a proven business system. We constantly develop our business system to ensure our growth as well as the growth of our franchisees,” the group said.
The cost of setting up a typical Cash Crusaders store is approximately R2.2 million including VAT.
Your own contribution would be R950,000, of unencumbered capital. The additional finance required to open your Cash Crusaders store would be a R950,0000 bank loan.
Should you have at least R650,000 in unencumbered capital, Cash Crusaders Franchising said it will go out of its way to put you into business, even if this requires us facilitating a loan for the shortfall – subject to credit checks and vetting and T&C’s.
Steers from R1.7 million
Steers franchisees can pay between R1.7 million – R2.5 million depending on the size and type of restaurants they want.
The initial franchise fee is R159,900 for a Standard Steers, while the fee for a drive-thru Steers is slightly increased at R175,700.
Approximate set up cost for a Standard Steers is R1,650,000 excluding VAT, joining fee and contingency. Set up cost includes equipment, shopfitting, wet works, furniture and fixtures.
In comparison, the approximate set up cost for a drive-thru Steers is R2,350,000.
In addition, Steers franchise owners are expected to pay 6% of their monthly turnover in royalty and 5% of monthly turnover for advertising.
Wimpy from R1.9 million
New Wimpy Franchisees can expect to pay between R1.9 million – R2.5 million and an initial franchisee fee of R114,300 (excluding VAT).
Franchisees are also expected to pay 7% of their turnover in management fees and 5% of their turnover in royalties.