{"id":88582,"date":"2015-05-26T20:30:45","date_gmt":"2015-05-26T18:30:45","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=88582"},"modified":"2015-05-27T15:57:04","modified_gmt":"2015-05-27T13:57:04","slug":"how-much-it-costs-to-open-a-fast-food-franchise-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/88582\/how-much-it-costs-to-open-a-fast-food-franchise-in-south-africa\/","title":{"rendered":"How much it costs to open a fast food franchise in South Africa"},"content":{"rendered":"

Correction:<\/strong> A previous version of this article stated that Krispy Kreme Doughnuts would available as a franchise option in South Africa, which is not correct. While the international brand is entering into the South African market<\/a> with 31 planned outlets, these will be solely owned by\u00a0KK Doughnuts SA.<\/em><\/p>\n

Looking at the biggest food chains in the country, franchising costs range from R500,000 for a brand like Chesa Nyama, to as much as R6 million for a global giant like McDonald’s (all excluding VAT).<\/p>\n

Franchise set-up fees often incorporate location, renovation and facility costs, with franchisees then paying an additional “joining” fee and the monthly payments to the brand owner.<\/p>\n

Franchise fees can hit as high as R185,000 for a Nando’s franchise or even R540,000 ($45,000) for McDonald’s, while monthly royalty and marketing payments range between a combined 4% and 12% of net income.<\/p>\n

Understandably, some of the most popular food brands in the country carry the highest costs, with McDonald’s ranging between R4 million and R6 million.<\/p>\n

South Africa’s biggest food chain, KFC, with 771 stores across the country, carries the second-highest start-up costs at R5.5 million; but the group notes that it is not currently open to new franchise opportunities.<\/p>\n

Potential franchisees are often expected to have between 35% and 65%\u00a0of the purchase price of a restaurant in unencumbered, non-borrowed cash.<\/p>\n

The table below lists the costs of opening a new franchise of South Africa’s fast food chains, with franchise\u00a0fees and monthly payments noted where information was available.<\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Franchise<\/strong><\/th>\nSet-up cost<\/strong><\/th>\nFranchise\u00a0fee<\/strong><\/th>\nMonthly payment (% of gross)<\/strong><\/th>\n<\/tr>\n
McDonald’s<\/td>\nR6 000 000<\/td>\nR540 000<\/td>\n4%<\/td>\n<\/tr>\n
KFC<\/td>\nR5 500 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Burger King<\/td>\nR5 000 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Nando’s<\/td>\nR4 500 000<\/td>\nR185 000<\/td>\n12%<\/td>\n<\/tr>\n
Chicken Licken<\/td>\nR3 000 000<\/td>\nR150 000<\/td>\n12%<\/td>\n<\/tr>\n
Pizza Hut<\/td>\nR2 500 000*<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Wimpy<\/td>\nR1 930 000<\/td>\nR114 300<\/td>\n12%<\/td>\n<\/tr>\n
Roman’s Pizza<\/td>\nR1 800 000<\/td>\nR 70 000<\/td>\n8%<\/td>\n<\/tr>\n
Debonaires<\/td>\nR1 720 000<\/td>\nR130 000<\/td>\n12%<\/td>\n<\/tr>\n
Barcelo’s<\/td>\nR1 600 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Domino’s Pizza<\/td>\nR1 500 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Kauai<\/td>\nR1 300 000<\/td>\nR110 000<\/td>\n10%<\/td>\n<\/tr>\n
Steers<\/td>\nR1 200 000<\/td>\nR130 000<\/td>\n11%<\/td>\n<\/tr>\n
Subway<\/td>\nR1 100 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Cinnabon<\/td>\nR1 000 000<\/td>\n<\/td>\n7.5%<\/td>\n<\/tr>\n
Burger Perfect<\/td>\nR \u00a0 970 750<\/td>\nR 65 000<\/td>\n8%<\/td>\n<\/tr>\n
Anat<\/td>\nR \u00a0 950 000<\/td>\nR100 000<\/td>\n8%<\/td>\n<\/tr>\n
Scooter’s Pizza<\/td>\nR \u00a0 950 000<\/td>\n<\/td>\n12%<\/td>\n<\/tr>\n
Pizza Perfect<\/td>\nR \u00a0 830 000<\/td>\nR 65 000<\/td>\n9%<\/td>\n<\/tr>\n
1+1 Pizza<\/td>\nR \u00a0 800 000<\/td>\n<\/td>\n7%<\/td>\n<\/tr>\n
Zebro’s Chicken<\/td>\nR \u00a0 756 000<\/td>\nR 75 000<\/td>\n4%<\/td>\n<\/tr>\n
London Pie<\/td>\nR \u00a0 675 750<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
King Pie<\/td>\nR \u00a0 550 000<\/td>\nR 54 000<\/td>\n<\/td>\n<\/tr>\n
Fish & Chip Co.<\/td>\nR \u00a0 525 439<\/td>\nR120 000<\/td>\nR4 400<\/td>\n<\/tr>\n
Chesa Nyama<\/td>\nR \u00a0 499 000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

* Potential Pizza Hut franchisees must be able to put up R25 million to potentially open up 10 franchises over time<\/small><\/p>\n

More on\u00a0food<\/h3>\n

Biggest fast food chains in South Africa<\/a><\/strong><\/p>\n

The most fattening fast-food meals in SA<\/a><\/strong><\/p>\n

The best jobs in the world<\/a><\/strong><\/p>\n

A R1,600 meal prepared by South Africa\u2019s best chef<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Fast food chains in South Africa offer many franchising opportunities for those looking to start a business – if you have the money to buy in.<\/p>\n","protected":false},"author":10,"featured_media":88604,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872,9876],"tags":[9399,9904,26,9890],"class_list":["post-88582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-lifestyle","tag-fast-food","tag-franchise","tag-headline","tag-krispy-kreme"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/88582","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=88582"}],"version-history":[{"count":19,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/88582\/revisions"}],"predecessor-version":[{"id":88784,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/88582\/revisions\/88784"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/88604"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=88582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=88582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=88582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}