{"id":744451,"date":"2024-01-24T12:35:16","date_gmt":"2024-01-24T10:35:16","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=744451"},"modified":"2024-01-24T12:35:16","modified_gmt":"2024-01-24T10:35:16","slug":"how-much-it-costs-to-open-a-top-fast-food-franchise-in-2024-including-kfc-and-mcdonalds","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/744451\/how-much-it-costs-to-open-a-top-fast-food-franchise-in-2024-including-kfc-and-mcdonalds\/","title":{"rendered":"How much it costs to open a top fast food franchise in 2024 \u2013 including KFC and McDonalds"},"content":{"rendered":"\n

The success and popularity of fast food franchises in South Africa are well known, but to take advantage of South Africa’s love of fast food will require millions of rands to join the industry giants. <\/p>\n\n\n\n

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

According to a study by Eighty20, while restaurants and coffee shops have battled since COVID-19 and are still around 22% below 2019 revenue, the takeaway and fast-food category recovered quickly after the pandemic and is now 41% above 2019 levels.<\/p>\n\n\n\n

The fast-food category was a third of the size of the restaurant category pre-Covid, but now it is more than two-thirds the size \u2013 showing just how much consumers\u2019 purchasing behaviour has changed, it added.<\/p>\n\n\n\n

According to the study, The top 10 most popular fast food outlets are KFC, Chicken Licken, Debonairs, McDonald\u2019s, Hungry Lion, Spur, Nando\u2019s, Burger King, Steers, and Wimpy.<\/p>\n\n\n\n

The fried chicken giant is also the most popular fast-food brand in the country, with 10 million South Africans eating there at least once in the past four weeks (as of the study). Interestingly, only 49 are directly owned by the company, and the other 1,003 are franchisee-owned. <\/p>\n\n\n\n

The company has grown by 44 stores in the past year. <\/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

Fast food is very profitable, but it requires a hefty investment to get started.<\/p>\n\n\n\n

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

To estimate the costs involved in owning some of the most popular fast-food franchises in South Africa, BusinessTech compared the fee requirements of various 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, Anat,<\/strong> Debonairs Pizza,<\/strong> Steers,<\/strong> Nando\u2019s, RocoMamas, Chicken Licken, Mochachos, Simply Asia, and Roman\u2019s Pizza.<\/strong><\/p>\n\n\n\n

As part of the franchising process, many popular brands require potential franchisees to complete a training program that lasts anywhere from six weeks to a year (as is the case with McDonald’s).<\/p>\n\n\n\n

Additionally, these brands require a percentage of unencumbered cash, which is cash that is readily available and not obtained through loans or bonds that would increase debt. <\/p>\n\n\n\n

Below is a list of these brands and their respective financial requirements for owning and operating a franchise.<\/p>\n\n\n\n

Note: where updated capital requirements to open a franchise wereunavailablee on the respective company’s website, estimates were taken from whichfranchise.co.za<\/a> \u2013 as indicated under the relevant brand name. <\/em><\/p>\n\n\n\n

Whichfranchise.co.za is among the leading websites for franchise information, advice, and opportunities in South Africa, and hence, it is one of the top franchisee recruitment websites.<\/em><\/p>\n\n\n\n

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KFC is undeniably the most popular fast-food franchise in South Africa. However, it’s important to note that KFC South Africa’s brand owner, Yum! Brands International has asserted that they are not actively seeking new franchiseee. <\/p>\n\n\n\n

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

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

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

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McDonald\u2019s doesn\u2019t present updated franchising costs, and one would have to apply to get an accurate idea of the total investment requirement for 2024. <\/p>\n\n\n\n

However, it was last reported in 2023 that the ballpark figures include:<\/p>\n\n\n\n