South Africa’s Franchise Boom: What You Need to Know

South Africa is emerging as one of the most dynamic franchise markets on the continent, driven by strong figures and rapidly growing sectors. A closer look at a key ecosystem for franchise networks in Africa.

South Africa’s Franchise Boom: What You Need to Know

South Africa is positioning itself as an exceptionally dynamic and resilient franchise market, serving as a major gateway for international brands into Africa. The sector is experiencing strong growth, making a significant contribution to the country’s economy.

Key Figures and Sector Growth

Recent data from the Franchise Association of South Africa (FASA) highlight the robustness of the industry:

  • Economic Impact: In 2023, the franchise sector’s revenue reached approximately ZAR 999 billion (around €50 billion), marking a 36% increase compared to 2019. This represents about 15% of South Africa’s total GDP.
  • Number of Franchisees: The total number of franchisees has grown remarkably, reaching 68,463 in 2023, a 43% increase since 2019.
  • Employment: The sector is a major employer, with nearly 500,000 people working in franchises.
  • Longevity: Stability is a key feature, with a large majority of franchisors (77%) and franchisees (53%) operating for over ten years.

Leading Sectors and Brand Examples

Several sectors are experiencing notable growth and offer expansion opportunities for franchise networks, both local and international.

1. Fast Food and Food Services

This sector is the largest and most popular in the South African franchise landscape. Consumer demand for fast-food brands, both local and international, is very strong.

  • KFC: By far the most popular fast-food franchise, with over 1,000 outlets across the country.
  • Nando's: An iconic South African brand that has successfully expanded internationally.
  • Chicken Licken: Another major local player with strong performance, boasting over 208 franchises.
  • Burger King: The brand has pursued aggressive expansion, gaining market share.
  • SPAR: The supermarket sector is also growing, with brands like SPAR diversifying into convenience stores, liquor stores (Tops at SPAR), and pharmacies.

2. Services and Retail

This sector is booming, covering a wide range of services for consumers and businesses.

  • Automotive Services: Franchises in this field, from repair services to gas stations, are in high demand.
  • Business Services (B2B): A high-growth sector encompassing business coaching, accounting services, and consulting firms.
  • Health and Beauty: The wellness and beauty industry continues to grow, offering opportunities for hair salons, spas, and personal care franchises.
  • Real Estate: Brands like Just Property, focused on rental and property management, are well-established with over 98 offices.

3. Education and Training

With growing demand for quality educational solutions, franchises in this sector are multiplying.

  • Tutor Doctor: A global franchise with a strong presence in South Africa, offering in-home tutoring services.
  • Other Education Franchises: From early childhood learning systems to e-learning platforms, this sector meets parents’ needs to equip children with essential skills for the future.

4. Low-Cost and Social Franchising

A growing franchise model focuses on low initial investment concepts and social franchising. These models aim to create entrepreneurial opportunities for a broader audience and provide basic services in underserved areas.

  • Examples: Small cleaning franchises, local service initiatives, or projects providing access to clean water or solar energy.

Trends and Growth Drivers

  • Development of Local Concepts: Contrary to perception, the majority (72%) of franchises in South Africa are local concepts, created and developed domestically, demonstrating the strength of South African entrepreneurship.
  • Regional Expansion: Nearly 39% of local brands have expanded into neighboring countries (Botswana, Lesotho, Eswatini, Namibia), confirming South Africa’s role as a regional hub.
  • Skills Transfer: The franchise model is an excellent vehicle for skills development and training, a major asset for the country.
  • Optimism and Resilience: Despite economic uncertainties, the sector has shown resilience. FASA has noted growing optimism regarding the rapid profitability of new franchises, with 89% of franchisors expecting a return on investment within the first year.

Note : For a detailed look at the legal framework and regulations governing franchising in South Africa, read our comprehensive article: Understanding Franchise Regulation in South Africa: A Comprehensive Legal Overview.

By the editorial team of AfricaFranchise.com