The growing franchise sector, which currently contributes nearly 10% to South Africa\u2019s GDP, is defying sluggish economic conditions and will continue to provide sustainable business opportunities for entrepreneurs into 2014 and beyond, says Standard Bank.<\/p>\n
\u201cWe are seeing that growing local opportunities, and international operators looking to South Africa to provide a springboard for their franchise operations into Africa, are pushing increased activity in the competitive franchising sector,\u201d said Standard Bank’s Simone Cooper.<\/p>\n
\u201cAlthough there has been an increase in the number of international brands entering the South African market, locally-born franchises still dominate,\u201d said Cooper.<\/p>\n
\u201cMore than 88% of franchise brands in South Africa have been developed here, the majority since 1992, with the remaining 12% being accounted for by international brands. These international brands are represented primarily by quick service restaurants.<\/p>\n
\u201cThe presence of international brands has increased by about 3.4% in the last three years as franchisors have entered South Africa with the intention of using the country as a gateway to Africa,\u201d Cooper said.<\/p>\n
Major franchising trends in South Africa<\/strong><\/p>\n Research commissioned by Standard Bank also identified the following major trends in South Africa:<\/p>\n Looking into Africa<\/strong><\/p>\n \u201cThe growth of franchises in Africa has been dramatic,\u201d said Cooper, pointing out that a short three years ago, 138 franchised systems were operating on the continent – a number that increased to 182 last year.<\/p>\n Taking advantage of gaps in various markets has seen growth in sectors ranging from automotive services, business to business services, fast food to retail operations.<\/p>\n Although franchises are moving into Africa, South Africa still leads the pack of the \u2018top 10 franchise countries\u2019 on the continent. Ranked in order of their franchise appeal these countries are:<\/p>\n Cooper said that South African franchisors are very active with just over 32% having expanded operations into the continent.<\/p>\n Standard Bank noted that the African Development Bank has estimated that 326 million people make up the middle class in Africa. The Bank estimates that African consumers will spend US$2.2 trillion on goods and services by 2030.<\/p>\n \u201cThe sector will continue to expand and offer significant employment prospects for thousands of South Africans. Africa, characterised by explosive growth of the middle class, will offer unrivaled future opportunities for local and internationally-based franchisors,\u201d said Cooper.<\/p>\n\n
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