Franchising Opportunities in South Africa

Franchising opportunities in South Africa are numerous. From food and marketing to car manufacturing. As a small business owner, you can skip the stress of starting your own business by purchasing a franchise.

Franchising in South Africa is overseen by the Franchise Association of South Africa. The organisation is responsible for the ethical roll-out of franchising in South Africa.

In this article, we look at some of the franchising opportunities available in South Africa.

1. Honchos Flame Grilled Chicken

Established in 2005, Honchos is a popular food franchise in South Africa. The franchise has over 90 stores in South Africa, Botswana, Lesotho and Eswatini.

The cost of a Honchos franchise depends on the type of store you want to open. A small compact store will cost you R 1,82 million. This includes R 200 000 in opening stock, R 120 000 for training purposes and R 1,5 million to R 1,85 million as establishment costs.

A traditional store will cost you up to R 2,24 million. This includes R 250 000 in opening stock costs, R 140 000 for training purposes and an upfront fee of R 180 000.

Note: Costs will vary depending on size, equipment supplier, staff etc. Costs do not include things like inverters.

2. Legends Barbershop

Legends Barbershop is a popular brand that is growing quickly in South Africa. The barbershop specialises in many things including haircuts, beard shaving and trimming, and other grooming services. The company also has products such as hair care products and grooming supplies for sale.

To purchase a Legends Barbershop franchise, you will need an initial R 100 000 investment capital. As part of the cost there is also a marketing fee of 2% and a royalty fee of 10%.

As the franchisee, you are responsible for the 2-week initial on-the-job training for potential employees. The business premise must be approximately 60m² in area and be able to accommodate 6-10 barbers’ chairs, a counter and a reception area.

3. Pizza Perfect

Pizza Perfect is a popular pizza shop with over 100 outlets in South Africa. The business offers clay oven pizza, pasta and subs for takeout and delivery. Some stores also have a chicken meal offer available.

To purchase a Pizza Perfect franchise, you will need R 1,35 million. A franchise with a chicken offering costs R 1,45 million. The recommended working capital is R 600 000, and upfront fee is R 75 000.

Note: A R10 000 application fee is required for a Pizza Perfect franchise. There is also a 7% royalty fee.

4. OBC Better Butchery

Initially called OBC Chicken, the store began trading in 1987 in Gauteng. Since then, the company has grown to over 90 stores in South Africa and 6 liquor stores within Gauteng.

The costs of opening an OBC Better Butchery are between R 8 million and R 10 million depending on the store size. The company also offers training to new staff by the OBC Operations team in accordance with the OBC operations manual.

Note: The recommended working capital to start an OBC Better Butchery store is R 1,5 million.

5. Doves

Doves is one of the largest funerals directing companies in Southern Africa. The Doves Group has 160 branches all over South Africa. The company provides insurance, funeral services and related products.

The cost of establishing a Doves franchise is R 2,9 million. This includes a 3% marketing fee, 8% management fees, and a R 375 000 recommended working capital.

Note: Doves requires an upfront fee of R 150 000 to establish a franchise.

These are some of the most notable franchises available for purchase in South Africa. There are many others like McDonald’s, KFC, Chicken Lickin etc., which can be a great business opportunity for you.

To ensure your franchise journey is going smoothly, here are some organisations which can help you with franchise funding:

Banks – Most traditional banks have franchise funding. Ensure that your credit score is good, you have a comprehensive business plan, and you are able to pay back the loan.

Masisizane Fund – The Masisizane Fund is an initiative of Old Mutual. The fund provides enterprise development funding to small, medium and micro enterprises (SMMEs).

National Empowerment Fund (NEF) – The NEF provides funding for franchises as a loan. The funding is limited to R 10 million and you must be BEE certified.

The time to start a franchise is today! Visit the SME South Africa website for more information.