- A Nandos outlet costs as much as E7 million to set up
- King Pie costs E500 000
- A chicken Licken franchise is among the most affordable at E4.8 million
- A KFC franchise will set you off E6 million excluding initiation fees
By Ntokozo Nkambule
News that popular South African fast food outlet RocoMamas opened in Manzini last year led to an aura of excitement around the country. But how much would it cost you to actually bring a fast-food chain to the country? We did a bit of research to find out.
It is important to note that prices aren’t the same across the board. Fast-food chain companies charge different fees. Notable South African fast-food franchises currently operating in the country include Nandos, KFC, Spur Corporation, Steers, Debonairs, Pizza Inn, and Garlitos, Sausage Saloon, among others.
According to BusinessTech, a leading online South African business, and technology publication (11 May 2020 statistics), obtaining a license to operate a McDonalds in South Africa ranges from E4 million to E6 million, depending on the type of restaurant and other factors. BusinessTech notes that an applicant must have a minimum of 35% of the purchase price of a restaurant in non–borrowed cash. Institutional funding can then be sourced to balance the shortfall, but McDonalds does not provide financing or loan guarantees.
Nandos, which is available in the country charges an application fee of E25 000 and a franchise fee of E230 000. The fee includes training of staff, concept, assistance with site selection and evaluation, initial legal costs incurred in the conclusion of the Franchise Agreement, assistance with Lease negotiations, and initial pre-opening assistance. As a franchise owner, you then need approximately E6, 560,000 (plus VAT) for establishment costs when setting up your restaurant.
- McDonalds : E4m – E6 m
- KFC : E6m+
- Nandos E7m
- Debonairs Pizza: E800, 000+
- Fish and Chips E500 000 +
- King Pie : E500, 000+
- Chicken Licken : E3m +
According to the Franchise Association of South Africa (2018 study) the franchise with the biggest revenue was KFC at E8.7 billion followed by McDonalds at E4.4 billion. See below attachment for some notable revenues from some franchises
|Revenue per outlet
- Note this are South African prices/not international. So prices may be more