Business

How much it costs to open a top fast-food franchise in South Africa

Jonathan Hoyle

 ·4 Aug 2026

Fast food is everywhere in South Africa, and the cost of owning a franchise can vary greatly depending on the business.

Many fast-food businesses, such as McDonald’s and KFC, do not own their hundreds of stores in the country but instead pass operations to franchisees.

The franchisee pays the initial startup costs and pays yearly royalties to the business, usually around 6% of its turnover.

Along with royalties, franchise owners are also often required to pay a portion of their turnover toward the company’s global marketing.

The franchisee can then use the brand name for marketing and access an existing customer base.

This model has recently come under scrutiny from the National Competition Commission (NCC), which raised concerns about unfair practices.

The NCC said it would be launching an investigation into the sector to establish if there are any practices which prohibit fair competition among businesses.

It said it would also be looking at the potentially unfair relationship between franchisees and established businesses.

These businesses enter negotiations with far more capital and knowledge, leading franchisees to accept potentially unfair terms.

The cost of a new franchise is high, as franchisees must make a large initial investment, much of which is often paid out of pocket.

There are also usually upfront franchising fees, which can range from R60,000 to R250,000, as well as administrative fees.

While most fast-food companies do not list their franchise-start-up costs upfront, many sites, such as WhichFranchise and Franchiseek, can provide estimated figures.

These amounts can vary widely by location and building size, but they provide an overview of what a prospective franchisee should expect.

Some businesses also have separate estimates for in-line or drive-thru franchises, with costs often being higher for the latter.

Franchise fees and initial investments for fast food companies

The cost of a franchise

The most expensive franchising option is Spur, but only if the restaurant is a standalone building, which is uncommon among many fast-food franchises.

The cheapest option is Simply Asia, which often has smaller restaurants and lacks the brand recognition of some other franchises.

In addition to the initial costs, many businesses require franchisees to complete up to six months of training before they can open their restaurant.

Franchise agreements can be attractive to prospective restaurant owners, as they provide training, marketing, and brand recognition.

However, many franchise owners can struggle with specific partnership agreements, such as procurement clauses.

Many franchises require all of their stores to use specific, approved suppliers, preventing people from sourcing their own items.

These are issues which the NCC intends to investigate to establish whether franchisees are able to effectively compete with other restaurants.

The inquiry could change many fast food companies’ existing business models and lead to sweeping changes across the industry.

The franchise industry is worth roughly R1 trillion in South Africa, and employs approximately 500,000 people.

The industry is dominated by KFC, which holds approximately 25% of the market share, with companies such as Debonairs, Steers, and Wimpy following close behind.