According to the latest survey from the Franchise Association of South Africa (FASA), 39% of franchisors have businesses in Africa, outside South African borders. This is equivalent to 1 775 stores in the SA franchise population. Most of these franchises are found in the neighbouring countries of Namibia, Botswana, Zambia, eSwatini, Lesotho and with growth noted in Ethiopia and Kenya.
Riaan Fouche, Chief Operating Officer for Franchising at FNB Business says, “More than 90% of franchise businesses in Africa are homegrown South African brands. There is huge appetite for bigger franchise brands in the retail, fuel and fast food sectors.”
He unpacks factors to consider before expanding a franchise to the rest of Africa:
- Due diligence – understand if there is a need and market for the products and services that you are planning to offer. A one size fits all approach is certainly not ideal, as what works in South Africa may not necessarily work in-country. Therefore, greater emphasis should be placed on understanding the different dynamics of a country such as culture, attitude and the needs of locals, amongst other factors.
- Local partnerships – consider partnering with companies or consultants that truly understand and have a proven track record in successfully helping businesses to expand into African markets. They will help you understand the market, competition, pricing strategy, supply chain, sourcing of local suppliers, payment methods and infrastructure etc.
- Choose the right location – location is the heart beat of a thriving franchise, choosing the wrong location would not only have a negative