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Food and Beverages

Operators in the restaurant and take-away franchise sector have weathered the financial downturn better than their independent counterparts, pointing to some of the strengths of franchising as a system of business.  Participants in the market benefited from the high level of support on offer from franchisors, and from the brand recognition and perceived value-for-money that franchised outlets offer consumers.  However the downside, participants in the franchise industry face challenges in accessing finance which may have been exacerbated during the recession owing to caution on the part of the banks.  Moving out of the recession, the sector is on the brink of having to deal with the implications of the new Consumer protection Act which may be at odds with the manner in which the sector is designed to function.  Within this context of strengths and challenges, there has been much corporate activity in South Africa’s restaurant and take-away franchise environment, with major player Famous Brand having acquired several new franchise systems in the recent months. 

Size of the Industry in South Africa

Franchize Directions , a consultancy working in the local franchise sector, shows that by early  2010, South Africa’s franchising sector as a whole had 551 franchised systems operating through 29 204 outlets.  The sector contributes about 11.8% GDP and employs close to 500 000 people.  112 new franchise concepts and 2 286 new outlets were create and opened up until 2010.  South Africa’s retail sales remain moderate in comparison to UK 30% retail sales and US over 50% retail sales. 

KwaZulu-Natal

KwaZulu-Natal houses only two major restaurant and takeaway franchise groups that being Java Brands and Retsol.  Despite this, KwaZulu-Natal  has prominent franchise outlets which include Wimpy, Steers, Debonairs Pizza, Mugg and Bean, Spur, Panarottis Scooters and Maxi’s and Kentucky.  There are other smaller brands like Simply Fish, John Dory’s and Cape Town Fish company.  Nando’s  has almost 70 outlets in KZN representing one-quarter of the company’s total number of outlets. 

More information regarding Restaurants and Franchising is available: Contact Fathima Amra, Sector manager: fathima@tikzn.co.za