It’s a new year and it’s time to follow up on that new year’s resolution and get into business. One of the best ways to get into business is to purchase a franchise. Franchising is a great choice if you are a first-time business owner. The only thing to figure out is which franchise to buy in 2025. The answer is that you will make your descision on the most succesful ones. Here’s the franchises to watch.
The franchise sector in South Africa is very profitable. The sector is a major player in South Africa’s economy, generating an estimated R90 billion in turnover in 2023. This is a 36% increase from 2019 and is equivalent to at least 15% of the country’s gross domestic profit (GDP).
The success of the franchising sector only showcases why franchising is a successful model for entrepreneurs. It also shows that there is significant dedication in the franchisors and franchisees to make it work.
Let’s take a look at the five franchises you should consider investing in in 2025.
The Importance of Franchising
Before we get into the franchising opportunities, we need to look at why franchising is so important. Some of the factors that make franchising so important are:
- As mentioned before, franchising contributes substantially to South Africa’s economy and overall GDP.
- Franchisors and franchisees provide employment opportunities to many South Africans.
- The franchising model allows for skills to be passed down and helps to build a more skilled workforce.
These three factors only slightly emphasise the importance of franchising. Now, let’s look at the five best franchises to consider investing in.
Top Five Franchises For 2025
Pret A Manger
Pret A Manger is a British sandwich and coffee shop franchise. The company will open its first store in South Africa this year in Melrose Arch and Rosebank Mall (The Zone). The company brings to South Africa a menu filled with fresh food and organic coffee.
The organic food shop also brings to South Africa more franchising options, but it’s not yet known when franchising will be available in South Africa.
McDonald’s
McDonald’s remains one of the best franchises to buy in South Africa. There are currently over three hundred and seventy franchises across the country. These only underline just how popular the brand is, which means it’s very profitable for franchisees.
To open your own McDonald’s franchise you will need between R 4 million and R 6 million. Additionally, you will need an unencumbered cash contribution of 35% (between R 1,4 million to R 2,1 million).
Total investment in your McDonald’s franchise is dependent on location, store size, styling and pre-operation expenses.
Kentucky Fried Chicken (KFC)
KFC remains the most popular franchise in South Africa. In the country, there are over a thousand KFCs which only shows how much South Africans love the store and its brand. If you are considering a franchise, KFC is a great option because it almost guarantees that you will get customers.
To purchase a KFC franchise you will need R6 million in capital. The total amount of the franchise depends on factors such as location, store size and operational requirements.
Chicken Licken
Chicken Licken has become a South African staple. The fast-food restaurant is one of the most successful franchises in South Africa, having over two hundred and eight franchises in the country.
To purchase a Chicken Licken franchise you will need R 4,8 million with an initial franchise fee of R 180 000. Also, the company takes a royalty fee (6%) and advertising fee (6%). These fees make up 12% of your franchisee’s turnover.
SPAR
Grocery store Spar is one of the most profitable franchises in South Africa. The company’s franchise offering has three options mainly; buying an existing store, converting your store into a Spar store, or developing/ building your own store.
SPAR has over a thousand stores and formats in the country. Additionally, the company has over 800 TOPS at SPAR liquor stores and over a hundred and thirty pharmacies.
The start-up costs for buying an existing store are:
- KWIKSPAR from R 5 million.
- SPAR from R 8 million.
- SUPERSPAR from R 10 million.
The existing store price requires a 40% unencumbered contribution from you.
If you do not want to franchise a SPAR store, the company also owns the Build IT and Save Mor brands. These brands are also available for franchising.
These franchises are not the only ones you should consider, however, if you want good profits, these are the best.
To speak to someone who knows the industry, visit SME Advice to connect with one of our experts.
