Buying a fast food franchise in South Africa is fast becoming one of the most popular ways of investing large sums of money.
The vast popularity of fast food in the South African sector has made it an attractive market for many investors. According to an Insight Survey, “Fast food is experiencing exponential growth with local consumers.”
The fast food industry brings in an estimated R300 billion every year.
A number of factors have contributed to this spike:
- Broadening black middle class- the growing black middle class has more disposable income to spend on fast food.
- Strong dining-out culture- as more people have longer working hours, dining out is often favoured over having a home-cooked meal.
- More women in the labour force- with more women in the labour force, household dynamics have shifted. Fewer women and men have enough time for home-cooked meals.
- More fast food outlets in townships- with more outlets popping up across townships nationwide, fast food has become a lot more accessible.
Euromonitor estimates that the number of consumers in the sector will increase to 12 million people in the next two years. According to analysts, investments in the sector will continue to grow more quickly.
Types of fast food franchises to invest in:
- Fast food, health food, pizza, sandwich shops. Smoothie and juice bars and restaurants.
In South Africa, the most popular fast food franchises to invest in currently, are pizza franchises.
Franchising costs range from R500 000 to as much as R6 million. Set up fees include location, renovation and facility costs. Monthly payments must be made, plus a joining fee.
According to research, the Top South African brand is Steers with 538 stores. Nandos, which has 1000 stores globally, is the 6th biggest fast food chain in South Africa. Start-up costs for this franchise can be as high as R185 000.
KFC, which is the most popular fast food franchise in South Africa, at 828 stores, has the second-highest start-up costs at R5.5 million.