Want to Know How Much It Costs to Open a Chicken Franchise?
It is no secret that South Africans are undoubtedly one of the world’s largest consumers of chicken. South Africans eat a great amount of chicken and chicken related products per year and Much of this feasting happens in our homes but is purchased from our many Chicken Quick Service Restaurants.
No wonder Chicken Fast Food Restaurants in South Africa and franchise opportunities in this industry are in popular demand.
If you have thought of opening your own stand-alone chicken restaurant or take-away, you may have thought of the competition you would have with big giants in the game. Price is always the deciding factor and these franchises cost a pretty penny, for good reason though!
We have to say that the number 1 most common question we get under our ‘Ask The Experts’ section is “How do I buy a KFC?” or “How do I buy a Chicken Licken?”, so we thought we should address this with a concise answer and some alternative options talking to our Franchise Expert Eric Parker and combining some interesting information on the sector and your favourite chicken franchises.
The costs to open one of your favourite chicken franchises in 2021
Chicken Licken opened in 1981 with a tight internal cost structure to provide delicious chicken offerings to people anywhere in Africa. According to the Sunday Times 2007 Survey, Chicken Licken was the second-biggest fast-food brand in South Africa.
A Chicken Licken Store costs approximately R4 800 000*.
The Fly-Thru costs a minimum of R6 800 000*, dependent on the landlord contributions and which store you choose to build as well as which store best suits the area.
The initial franchise fee is R180000* with a Royalty fee of 6% and Advertising cost of 6% (that account for 12% of the franchise’s turnover).
Chicken Licken does not provide finance, though financial organisations normally require that the applicant provide approximately 50% of the loan.
*Not known if VAT is included
KFC, a subsidiary of Yum! Brands, Inc. is a global quick-service restaurant brand with a rich history of global success and innovation serving great tasting chicken across several global territories.
Unfortunately, KFC is not likely to increase its number of restaurants any time soon, Yum International has stated that the company is not currently looking for new franchisees. However, existing KFC franchisees may elect to sell their franchise, and it is, therefore, possible to become a new KFC franchisee by purchasing an existing KFC business. There are stringent protocols that would need to be in place for this avenue of investment.
According to the latest found franchise information available from KFC, new franchise owners could expect to pay around R6 000 000 for a new franchise (which aren’t available at this stage). With the only option to now buy a franchise from a current owner wanting to sell, prospective franchisees can expect this fee to increase or decrease marginally depending on several factors such as location and demand.
So, long story short, KFCs aren’t available to new franchisees in South Africa.
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. Nando’s currently only offers franchises in South Africa and Australia.
The total average establishment costs (excluding VAT) for a Drive-Thru is R7 050 000 and an Inline store is R5 250 000.
If these brands are out of your budget or league, then take a look at these great chicken franchise opportunities
Chicken Xpress is quickly becoming a popular chicken franchise in each new community they enter. Their goal is to provide delicious food served in inspirational and comfortable CX stores, employing loyal staff that absolutely love the brand and customers; all while making a difference to each community across the country.
Chicken Xpress has an estimated total investment of R1 657 749 (excluding VAT).
Royalty fees are 5% of turnover with a marketing fee of 1,5% of the turnover, (excluding VAT)
The Galito’s story began with the first restaurant opening in Nelspruit, Mpumalanga in 1996. With a powerful combination of great tasting chicken, passionate service, and pride, Galito’s quickly became the Lowveld favourite! There are Galito’s franchises popping up across the country and the total estimated investment amount for a Galito’s store ranges between R1500 000* and R2 000 000*
Over 22 years of franchising experience enables Galito’s to offer complete franchisee support, providing a turnkey solution – from site selection to staff recruitment and training.
Galito’s offer various franchise model options such as, Counter Service, Galipods, Food Court, Drive-Thru and the Full-Service model.
A Royalty of 5 % with a brand development contribution of 4 % of turnover is payable monthly to the franchisor.
Potential applicants need to have a minimum of 50% of the total cost of the store as unencumbered funds (money not secured by any creditor), before securing a business loan for the balance of the required setup cost. R300 000* is recommended for operating capital.
A Galito’s restaurant enjoys a gross profit of 56% + with expected Return on Sales (ROS) ranging from 15% – 20%, turnovers of R300 000* to R600 000* + respectively.
*Not known if VAT is included
Mochachos initially opened its first store in 1994 and for over 26 years, the brand has enjoyed the patronage of South Africans nationally from all demographic and socio-economic sectors.
The initial/joining fee of a Mochachos franchise is R199 000 (excluding VAT) – this varies according to territories in which the store opens.
The estimated set-up cost is from R1 900 000 (excluding VAT). The set-up cost varies due to the size, condition of the premises and landlord rental deposits/requirements.
The Royalty fee is 8% of your store’s gross sales or a clearly defined minimum, defined payment whichever is the greater.
Franchisees must have at least 60% unencumbered funds and the balance may be applied for from various banking institutions.
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