{"id":241813,"date":"2018-05-02T18:00:34","date_gmt":"2018-05-02T16:00:34","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=241813"},"modified":"2018-05-02T17:03:53","modified_gmt":"2018-05-02T15:03:53","slug":"how-much-it-costs-to-open-the-10-most-popular-fast-food-franchises-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/241813\/how-much-it-costs-to-open-the-10-most-popular-fast-food-franchises-in-south-africa\/","title":{"rendered":"How much it costs to open the 10 most popular fast food franchises in South Africa"},"content":{"rendered":"

Despite a weak economy and tough trading conditions, the franchising sector has continued to perform well – especially in the fast-food sector.<\/p>\n

\u201cOver the past few decades, business format franchising has become the most successful business model the world has ever known,” said Tony Da Fonseca, chairman of the Franchise Association of South Africa (FASA).<\/p>\n

“Seeing that in this fast-moving world of ours, change is seen as the only constant, it is appropriate to ask whether franchising can maintain its momentum. My answer is a resounding yes.”<\/p>\n

Survey results released by FASA in 2017 showed that the sector\u2019s performance remains on an upward trend.<\/p>\n

During the period under review, the sector consisted of 845 franchisors and over 40,000 franchisees. It employed about 343,000 people and generated sales of R587 billion. This equals 13.3% of the country\u2019s GDP, up from the 9.7% recorded in 2014.<\/p>\n

The survey also confirmed the stability of the sector, with some brands operating for over 50 years.<\/p>\n

Despite this success, franchisors are notoriously tight-lipped as to how well their respective restaurants are doing, making it almost impossible to say exactly which fast-food franchise is the most popular.<\/p>\n

Instead, BusinessTech looked at ‘fan favourite’ franchises based on the Sunday Times’ recent Top Brands<\/a><\/strong> awards and how much they currently cost to open.<\/p>\n

\n

KFC – N\/A<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

Despite KFC being by far the most popular fast food franchise in South Africa, it is not likely to increase its number of restaurants any time soon.<\/p>\n

KFC South Africa brand owner, Yum International, has noted that the company is not currently looking for\u00a0new franchisees.<\/p>\n

However, existing KFC franchisees may elect to sell their businesses,\u00a0and it is therefore\u00a0possible\u00a0to become a new KFC franchisee by purchasing an existing KFC business.<\/p>\n

According to the latest franchise data available from KFC, new franchise owners could expect to pay close to\u00a0R6 million for a new franchise<\/strong>.<\/p>\n

With the only option to now buy a franchise from a current owner, perspective franchisees can expect this number to increase or decrease slightly depending on a number of factors such as location and demand.<\/p>\n

\n

Nando’s – from R7 million<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

There are two main cost requirements when looking at a Nando’s franchise – establishment costs and standard fees.<\/p>\n

According to the restaurant’s website, a R25,000 application fee is required to show commitment to actually wanting to acquire a Nando’s and to compensate for the costs of Psychometric testing, interviews and in-store assessment, etc.<\/p>\n

You are also required to pay a R230,000 franchise fee (excluding VAT), to make use of\u00a0and operate under the Nando’s name and concept, staff training, site assistance, and launch assistance.<\/p>\n

However the biggest expense comes from establishment costs which include everything from setting up the kitchen to light fittings – and will set you back approximately R6.95 million (excluding VAT).<\/p>\n

\n

Debonairs – from R2 million<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

According to Debonair\u2019s South Africa\u2019s franchising documentation, new franchise owners can expect to pay around\u00a0R2 million.<\/strong><\/p>\n

According to its website, once applicants have been granted and guaranteed a franchise, Debonairs will assist you with a business banker for your application.<\/p>\n

This includes help when applying for financing and any other general enquiries you may have about the financing of a franchised business.<\/p>\n

\n

Steers – from R1.7 million<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

One of the cheapest franchise options on the list, Steers franchisees can expect to pay around R1.7 million when starting a new franchise.<\/p>\n

However this differs greatly depending on the type of Steers you wish to open – with standard, drive thru and kiosk options available.<\/p>\n

The approximate set up cost for a standard Steers is R1.65 million excluding VAT, joining fee and contingency. Set up cost includes equipment, shopfitting, wet works, furniture and fixtures.<\/p>\n

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McDonald’s – from R4 million<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

According to McDonald\u2019s South Africa, the cost of a franchise will vary, with\u00a0actual costs only determined when an individual franchise is offered to an applicant.<\/p>\n

The size of the restaurant, location, pre-opening expenses, inventory, selection of equipment, signage, seating and style of decor and landscaping will affect this cost.<\/p>\n

This means that\u00a0McDonald\u2019s South Africa estimates the cost of a franchise to be anywhere\u00a0between\u00a0R4 million \u2013 R6 million, depending on the type of restaurant and other factors.<\/p>\n

Applicants are are also expected to have a\u00a0minimum of 35% of the purchase price of a restaurant in unencumbered, non-borrowed cash.<\/p>\n

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Chicken Licken – from R4.8 million<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

According to its website, a standard Chicken Licken\u00a0store costs R4.8 million while a drive through (Fly-Thru) restaurant will cost a minimum of\u00a0R6.8 million.<\/p>\n

In both cases the cost will be dependent on\u00a0the landlord contributions and which store you choose to build as well as which store best suits the area, it said.<\/p>\n

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Roman’s Pizza – from R2.4 million<\/a><\/strong><\/p>\n

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Franchisees looking to open a Roman’s Pizza can expect to pay around R2.5 million for a new store.<\/p>\n

This includes an initial joining fee of R90,000, while the cost of a\u00a0120 square metre store is expected to set you back around\u00a0R2.3 million.<\/p>\n

\n

Fish and Chip Co – from R850,000<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

According to its website, there is an average set up cost of R699,000 for a Fish and Chip Co franchise and, you can expect to pay an initial joining and set up fee of R140,000.<\/p>\n

As it falls under the Taste holdings group, franchise owners can also expect to receive assistance when preparing finance applications, identifying suitable sites, as well as initial and ongoing training and support.<\/p>\n

All franchisees are required to complete a five-day training program that covers day-to-day operations, staffing, stock control, marketing, and management skills.<\/p>\n

\n

Something Fishy – from R900,000<\/a><\/strong><\/p>\n

\"\"<\/a><\/p>\n

While franchising costs are not available on Something Fishy’s website, opening a new franchise will set you back around R900,000 according to SA Franchise Warehouse.<\/p>\n

This includes an approximate setup cost of R850,000 (excluding VAT), and an initial franchise fee of R55,000 (also excluding VAT).<\/p>\n

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Galito’s – from R1.75 million<\/a><\/strong><\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

According to\u00a0 the Galito’s website,\u00a0 the cost of opening a standard 180 square metre outlet is in the region of R1,750,000 (excl vat).<\/p>\n

However it notes that this cost is heavily dependent on the location, size and initial condition of the premises.<\/p>\n

“This includes all development costs from project initiation (store design & staff training), to store launch promotions. This cost also includes a franchise joining fee of R110,000 (excluding VAT),” it said.<\/p>\n

\n

Read:\u00a0What you need to know about opening a petrol station franchise in South Africa in 2018<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Despite a weak economy and tough trading conditions, the franchising sector has continued to perform well – especially in the fast-food sector.<\/p>\n","protected":false},"author":10,"featured_media":241963,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-241813","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/241813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=241813"}],"version-history":[{"count":13,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/241813\/revisions"}],"predecessor-version":[{"id":241975,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/241813\/revisions\/241975"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/241963"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=241813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=241813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=241813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}