Saturday, August 25, 2018

Top 20 fast food franchises that make the most money in South Africa

South Africa’s fast food industry is looking very healthy,
being one of the market sectors that has experienced strong
growth in revenue amid tough economic times in the country.
Not only has the industry experienced growth in the number of
franchises opening up over the past year, revenues across major
brands are also up, while industry analysts report seeing high
demand from those looking for franchising opportunities.
Data published by the Franchise Association of South Africa
(FASA) shows that the sector’s performance remains on an upward
trend.
In 2017, the sector consisted of 845 franchisors and over
40,000 franchisees. It employed about 343,000 people and
generated sales of R587 billion. This equals 13.3% of the
country’s GDP, up from the 9.7% recorded in 2014.
One question that prospective franchisees may want answered,
however, is how much can a franchise make?
While revenues will depend on many factors – location and
market being key influences – many of South Africa’s top fast
food franchises are making bank; and when averaged out across
operations, revenues look to be well worth the start-up costs.
Research from global analytics group Euromonitor, published by
the 
Financial Mail
, shows how revenues across 20 major
fast food franchises in South Africa increased between 2016 and
2017 – with big brands like Deboniars and Burger King posting
double digit growth, and others like KFC coming close.
The table below outlines the growth in revenue, as reported by
Euromonitor, as well as how much money each brand makes per
franchise.
BrandRevenue (2017)Growth (from 2016)Franchises (2017)Revenue per outlet
McDonaldsR4.34 billion5.6%245R17.7 million
Burger KingR623.5 million28.5%61R10.2 million
KFCR8.71 billion9.4%879R9.9 million
NandosR2.33 billion7.1%303R7.7 million
Fish and Chip Co.R810.8 million5.7%164R4.9 million
WimpyR2.02 billion7.5%481R4.2 million
Capitan DoRegosR162.7 million17.6%41R4.0 million
DebonairsR1.49 billion12.5%511R2.9 million
SteersR1.35 billion8.9%561R2.4 million
Roman’s PizzaR474.9 million8.1%210R2.3 million
Barcelo’sR155.5 million9.6%68R2.3 million
Hungry LionR279.4 million10.0%125R2.2 million
Pizza PerfectR194.5 million5.2%101R1.9 million
Sandwich BaronR94.0 million7.1%51R1.8 million
Chicken LickenR422.0 million4.2%240R1.75 million
King PieR435.8 million2.3%253R1.7 million
KauaiR226.6 million8.3%135R1.68 million
FishawaysR375.6 million7.9%226R1.66 million
Pie CityR176.0 million2.8%175R1.0 million
ChesaNyamaR225.5 million8.8%269R838 290
The cost of opening a franchise
Taking the data above into account, it show why so many
consider opening a franchise to be such a good business
opportunity, as the potential revenues can certainly make up
the costs of opening an outlet.
These are the start-up costs for opening some of the biggest
franchises in the country:
  • KFC – from R6 million
  • Nando’s – from R7 million
  • Debonairs – from R2 million
  • Steers – from R1.7 million
  • McDonald’s – from R4 million
  • Chicken Licken – from R4.8 million
  • Roman’s Pizza – from R2.4 million
  • Fish and Chip Co. – from R850,000
Bear in mind that the start-up costs vary, depending on
location and size of the outlet. They are also dependent on the
brand owners and demand. For example, KFC is slow to open new
franchises because of its large number of outlets already in
place.
Other brand owners, exclusively own all franchises, as is the
case with Burger King.

Biggest fast food franchises
BusinessTech 
recently did a count
 of the biggest fast food
franchises in the country. The count reflects reported numbers
and physical stores as they stood in July 2018, while
Euromonitor’s data above reflects counts as they stood in 2017.

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