Top 8 South African Franchises – The Largest Brands In The Sector
The franchise sector in SA consists of a variety of categories, including the three largest categories being fast food and restaurants (26% of the sector), retailing (18%) and building office and home services (10%). When it comes to judging the top franchises in the country, the information in the public domain mostly boils down to number of outlets and group sales, if disclosed as is the case of listed companies. This article will focus on number of outlets as an indicator of large franchise groups.
KFC is the largest franchised group in South Africa with over 960 outlets. The brand has been in South Africa since the 1970s and remains a firm favourite with consumers.
Burt Gunning, a multi-unit franchisee in South Africa, shared some facts indicating the size of the group internationally at the FNB Franchise Summit held in March 2020:
- It is the world’s second-largest restaurant chain (as measured by sales) with over 23,000 locations globally in 142 countries.
- Roughly 10% of outlets are company-owned, and 90% are franchise owned.
- The average KFC store in SA serves 5,000 customers a week (in one store)
- The amount of chips (3,5 tons of chips) sold in one store over a month would fill a room.
- The amount of chicken sold over a month in one store is 9 tons which is the equivalent of 9 x 1 ton bakkie loads.
Steers is the oldest franchise in South Africa, it was founded in 1963 and started franchising in1965. There are currently in the region of 509 stores. The group was listed in 1994 and formed the foundation of the Famous Brands Group, a listed company owning a multitude of brands including Mugg and Bean, Debonairs Pizza, Wimpy and Fish Aways.
Wimpy forms part of the Famous Brands stable and have over 400 stores. The brand started in the UK but became completely South Africanised and well supported for its breakfasts. The first Wimpy store in South Africa opened in 1967. Famous Brands recently bought the last remaining Wimpy stores in the UK.
Debonairs Pizza has about 382 stores. The brand was co-founded by Craig MacKenzie and Andrew Harvey in Pietermaritzburg in 1991, but is now part of the Famous Brands stable. The success of the Debonairs Pizza brand bears testament to the ability of South African franchisors to build robust and attractive franchises. From humble beginnings and a dream to have 50 stores, Craig and Andrew were invited to the opening of the 500th Debonairs store.
Nando’s grew from humble beginnings in Rosettenville in the South of Johannesburg to a multinational franchise with locations in the UK, USA, Canada, Australia, and 84 stores in the rest of Africa alone. It has over 300 stores in South Africa and is much loved for its peri-peri chicken and cheeky advertising campaigns. Nandos only offers franchises in South Africa and Australia.
Spur is a South African institution and largely captured the family dining out market. The brand was founded by Alan Ambor in 1967. Today, Spur Corporation is a listed company owning multiple brands including Panarotti’s, Hussar Grill, and Turn and Tender and has significant shareholding in Rocomama’s, one of the recent rising stars in the South African franchised landscape. Spur alone has 543 stores in SA and77 stores outside SA.
McDonald’s entered the South African market in 1994. It has more than 200 stores in South Africa and was the driving force behind the growth of the drive-through format in South Africa. Worldwide, McDonald’s operates over 30 000 restaurants.
Chicken Licken was born and bred in South Africa. The brand was founded in 1981 and has over 200 stores today. The brand is the biggest non-American fried chicken franchise in the world.
As is evident from this list, which is not exhaustive, the largest franchises in South Africa happen to be fast food and restaurant brands. It may be attributed to the fact that franchising in South Africa started with these brands, they have been around for a long time and have built quite a following. However, there are many brands with around 200 stores in sectors such as retail, beauty and building and home services. The impact of the Corona Virus is especially devastating for food franchises in South Africa, with many restrictions that apply and limit their ability to trade. Buying a franchise is a major decision and Whichfranchise.co.za advises potential franchisees to do their research diligently. For more information, see our website.
Sources: Franchise Association of South Africa research report on franchisors, 2019. Franchising in South Africa (Kurt Illetschko and Eric Parker, 2007), FNB Franchise Summit 2020