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The Popularity of Franchising


According to the latest Franchising in South Africa survey, conducted by the Franchise Association of South Africa, there are currently more than 750 different business format franchises operating here right now, generating turnover of R 580 billion and employing in excess of 400,000 people.

These statistics show the importance of franchising to the economy and how franchising presents valuable opportunities for individuals who would like to start their own business and work for themselves, but not by themselves. A variety of different types of franchises exist here now: more than half are in the service sector, a third in the retail sector and there are also a significant amount of van-based ones.

Food and drink industry franchises are the most popular and they make up almost a quarter of franchisors. The report shows that the average initial franchise fee is R 467 000. Similarly there has been a significant decrease in total set-up costs, which have dropped from an average of R 420 000 to R 200 000.

Why Is Franchising a Popular Business Model?

Well, franchise companies have already developed a method of doing business that works well and produces results and will provide their franchisee with ongoing operational support and training.

Franchising in South Africa remains relatively small if we compare it to the UK and the US but undoubtedly it’s a sector with lots of potential for growth in the future. As our disposable income increases, South African consumers have become ever more quality conscious and brand aware and our consumer needs are preferably filled by iconic international franchises that are strongly branded, especially when that’s accompanied by high quality local service.

The franchise industry in South Africa is a vibrant one with a clear capacity to generate wealth and jobs here.

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