Starting your own business is not the only way to become an entrepreneur. There are existing businesses that you can acquire, these are called franchises. There are some top franchises in South Africa that you can consider.
Franchises are businesses where the owner licenses its operations. This includes the business’s products, branding, and knowledge. In exchange for this, you pay a franchise fee.
Some of the most profitable franchises in South Africa include fast-food stores like KFC, and McDonald’s. Other franchises include retail stores like Pick n Pay and Spar. KFC is the largest franchise in South Africa with around 1000 outlets in the country.
In this article, we will list some of the top franchises to look at in South Africa.
1. KFC
The most popular fast-food restaurant in South Africa is a great franchising option. Yum! Brands which owns KFC has said it is not looking for new franchisees, however, you can buy one from someone else.
To own a KFC franchise, you will need a maximum total investment of R 6 million. But, buying it from someone else can bring the price down. The total investment can also vary depending on location, size and operational requirements.
2. Chicken Licken
Another popular fast-food store in South Africa, Chicken Licken, is growing in numbers around the country. The brand has two franchise options: a normal Chicken Licken store or a Chicken Licken ‘Fly-Thru’ store.
A normal Chicken Licken store will cost you R 4,8 million. The Fly-Thru costs R 6,8 million. Purchasing a Chicken Licken store depends on factors such as landlord contributions, which store you choose to build and which store is best suited for the area. The initial franchise fee is R 180 000.
Chicken Licken takes a royalty fee of 6%, and an advertising share of 6%. This accounts for 12% of the franchise’s turnover.
3. McDonald’s
American fast-food franchise McDonald’s is the most popular food chain in the world. There are close to 400 restaurants in South Africa. To own a McDonald’s franchise, it will cost you between R 4 million and R 6 million. The 35% unencumbered cash contribution is between R 1,4 million and R 2,1 million.
The total investment depends on various factors. These factors include the location of the restaurant, its size, its appearance, and any initial expenses that may arise.
4. Food Lover’s Market
Fresh produce retailer Food Lover’s Market Group also has franchising options. The group consists of Food Lover’s Market, Food Lover’s Eateries, Freshstop convenience stores, Seattle Coffee Company, Market Liquors, Diamond’s Discount Liquors and FVC International.
To set up a Food Lover’s Market you will need between R 8 million and R 12 million. The owner contribution fee is 2% and the marketing contribution is 0,5% of turnover. The initial agreement term is set at 10 years.
5. Sorbet
Salon and nail bar store Sorbet is a popular franchise option with over 200 stores across South Africa. The Sorbet Group encompasses Sorbet Salons, Sorbet Nailbars, Sorbet Hairbars, Sorbet MAN and Candi&Co. stores.
To own a Sorbet franchise, you will need between R 2,4 million to R 3,5 million. A new salon will cost R 2,4 million, a hybrid store is R 3,5 million, Hairbar is R 2,5 million, and a Sorbet Man store is R 2,5 million.
Excluded from set-up costs are air-conditioning and extraction, sprinklers, shop fronts, CCTV, and alarm systems.
6. Levingers
Dry clean and shoe clinic company Levingers has been operating for over 41 years in South Africa. You can open a new Levingers store or buy an existing one. The minimum cost for investing in a franchise is R 500 000.
You can apply for franchising on the website. Simply fill in the form and a Levingers representative will get back to you.
7. CleanMe
CleanME is an eco-friendly franchise that offers services such as car wash, truck wash and laundry. The franchise buy-in cost begins at R 375 000.
The franchising process is straightforward. You will need to sign a non-disclosure agreement, apply, have a site visit, and present your business case.
Once your application has been approved, you will sign a contract and can begin trading within one month. Franchising with the company has benefits such as being off the grid (no loadshedding), and a turnkey solution.
These are just some of the franchises available in South Africa. There are many others in industries such as funeral services, car services, and salons amongst many others.
For more information on franchises, visit the SME South Africa website. For in-depth business advice, book an appointment with one of our experts.
