{"id":704973,"date":"2023-07-30T17:00:00","date_gmt":"2023-07-30T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=704973"},"modified":"2023-07-28T15:23:37","modified_gmt":"2023-07-28T13:23:37","slug":"how-much-it-costs-to-open-a-top-fast-food-franchise-in-south-africa-3","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/704973\/how-much-it-costs-to-open-a-top-fast-food-franchise-in-south-africa-3\/","title":{"rendered":"How much it costs to open a top fast-food franchise in South Africa"},"content":{"rendered":"\n

The success and popularity of fast food franchises in South Africa are well known, and to hop on the gravy train will cost you millions. <\/p>\n\n\n\n

While fast-food chains have experienced the challenges faced by many other businesses in South Africa, they continue to grow due to their convenience and increasing demand during load shedding.<\/p>\n\n\n\n

A study conducted by Discovery Bank and Visa showed that, as load-shedding stages increase, so does the amount of money spent on eating out, with the highest peaks seen during stages 5 and 6. <\/p>\n\n\n\n

South Africans tend to spend 60% more on eating out during these stages compared to when there is no load-shedding.<\/p>\n\n\n\n

This has helped the industry compared to many others who have struggled during rampant power cuts.<\/p>\n\n\n\n

Property Sector Strategist at FNB Commercial Property Finance, John Loos, told 702\u2019s The Money Show that South Africa\u2019s food and beverages sector grew 15.5% nominally year-on-year. <\/p>\n\n\n\n

Additionally, while restaurants and coffee shops declined by as much as 35% in 2023 compared to provide 2019 due to various economic headwinds in South Africa, takeaways and fast food has grown by 33.1% in real terms over the same period. <\/p>\n\n\n\n

According to an Allied Market Research report, South Africa\u2019s fast food market is expected to grow by 7.9% annually and reach a valuation of $4.9 billion (R85 billion) by 2026.<\/p>\n\n\n\n

The fast food industry is still a very lucrative business, and getting your foot in the door will cost you a hefty sum of money.<\/p>\n\n\n\n

How much it costs to own a franchise<\/strong><\/p>\n\n\n\n

To give you an idea of the costs involved in owning some of South Africa\u2019s most popular fast-food franchises, BusinessTech compared the fee requirements of several franchises.<\/p>\n\n\n\n

The franchises listed in this article are those that had the relevant information available and include: KFC,<\/strong> McDonald\u2019s,<\/strong> Debonairs Pizza,<\/strong> Steers,<\/strong> Nando\u2019s, RocoMamas, Chicken Licken, Simply Asia, and Roman’s Pizza.<\/strong><\/p>\n\n\n\n

Apart from the financial contributions and as part of the franchising process, most of these brands require prospective franchisees to undergo training for a duration of between six and eight weeks to a whole year in McDonald\u2019s case.<\/p>\n\n\n\n

They also require a percentage of unencumbered cash, which is the franchisee\u2019s cash available in liquid form and should not be obtained from a bond or other loan that would increase the debt.<\/p>\n\n\n\n

These brands and their respective financial requirements to own and operate under the franchise are listed below.<\/p>\n\n\n\n

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Colonel (Harland) Sanders started selling his famed southern fried chicken in 1964, and today, there are over 26,000 KFC restaurants worldwide.<\/p>\n\n\n\n

Despite KFC being by far the most popular fast food franchise in South Africa, KFC South Africa brand owner Yum! Brands International has noted that the company is not currently looking for new franchisees.<\/p>\n\n\n\n

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

According to the latest franchise data available from KFC, new franchise owners could expect to pay close to R6 million for a new franchise<\/strong>.<\/p>\n\n\n\n

This number may vary depending on location, size, and operation requirements.<\/p>\n\n\n\n

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McDonald\u2019s started as a single restaurant in Illinois in 1955 and today spans the globe with more than 35,000 restaurants in 120 countries \u2013 335 of these in South Africa.<\/p>\n\n\n\n

While Mcdonald\u2019s doesn\u2019t present updated franchising costs, the total investment to own a branch as of the end of 2022 includes the following:<\/p>\n\n\n\n