The franchise industry is important for economic growth in South Africa as it contributed 15% of the country’s GDP in 2022.Two surveys conducted in the franchise industry show it is still going strong despite the challenges of the past few years.
The time the franchise has been operating showed that three in four franchises fell into the more experienced range of 10+ years, with the average age of the business 21 years, proving the resilience and stability of the franchise sector in South Africa to provide long-term investment opportunities. The estimated turnover generated for 2023 was R999 billion, a 36% increase over the 2019 figure of R734 billion, again reflecting the increased number of large franchisors participating in the survey.
Female ownership remained steady at 30% in 2023, possibly due to the multiple roles women had to play over the past four years, especially during Covid which may have restricted their entrepreneurial ambitions. “This sector is one of the most dynamic and visible due to its spread throughout the country through well-recognised brands in twelve different sectors but is not recognized enough by government for its entrepreneurial endeavours, offering viable business opportunities, training staff in a range of industries and creating both direct and indirect jobs.”
The cost involved in operating a franchise system were perceived to be the main challenge facing the interviewed franchisors . Breaking down this response, it was noted that inflation was the major aspect mentioned in this regard , followed by high/expensive rentals and the slow economy .