5 of SA’s best performing home-grown food franchises
A recent survey conducted by research company Research IQ for the Franchise Association of South Africa (Fasa) revealed that the franchising sector in South Africa remains relatively strong, generating R302 billion for the economy last year and employing more than 300 000 people; the food industry accounts for 22% of that figure and just under 40% of total consumer food service sales in South Africa.
The market is characterised by three major players, which are Spur Corporation (Spur and Panarottis), Famous Brands (Wimpy Steers and Debonairs), and Taste Holdings (Domino’s Pizza, Fish and Chips Co. and Scooters Pizza).
The food franchising industry is booming and shows no evidence of slowing down, but the burning question is why is this industry doing so well?
The fast-growing food industry
Jeremy Lang, regional manager of Business Partners Limited says there are three reasons for this. Firstly, South Africa’s growing middle-class, secondly, there is less time in the day which makes fast food a more appealing option, and lastly, the convenience and easy access to the stores, both physically and online.
“Many franchises are also adjusting their menu to better suit the market with less disposable income, such as R20 meals – an offer which did not exist before,” Lang says.
Here are South Africa’s top five home-grown franchises by their market share:
The first Steers fast food outlet was opened in 1960 by Greek-South African entrepreneur, George Halamandaris, who got the idea for a steakhouse after holidaying in the United States.
Stats: According to Famous Brand’s annual report, Steers has an 8% market share of the fast food industry and 18% of all burger brands. There are 522 stores in South Africa and 43 international stores.
Established in 1981, Chicken Licken’s ‘Soul Food’ chain is the second largest fast food brand in South Africa behind KFC.
Stats: There are 247 outlets in South Africa and according to the Wall Street Journal, the food chain holds a 5% market share of South Africa’s fast food market, tying with McDonalds. The journal also reports that Chicken Licken is the largest non-American-owned fried chicken franchise in the world.
Debonairs was founded in 1991 by varsity student, Craig Mckenzie, who ha started a small pizza delivery business.
Stats: Delivery turned out to be a smart move as Debonairs is now the number one pizza franchise in South Africa. There are 500 Debonairs stores in South Africa and according to the South African Customer Satisfaction Index (SAcsi) released early this year, the franchise holds a 3.6% market share in the fast food industry.
Nando’s was started in 1987 by Portuguese-South African entrepreneurs, Robert and Fernando (Nando for short).
Stats: The group has grown rapidly as SAcsi reports Nando’s holding at 3.5% market share of the fast food industry. The chain’s presence is not limited to just South Africa, they are on five continents around the world, with 1,000 outlets in 30 countries, and over 300 in South Africa. According to CNBC Africa, Nando’s is South Africa’s most successful restaurant group export.
The Spur steakhouse franchise is a distinctly family-orientated brand, which was established over 40 years ago, and is recognised both locally and internationally.
Stats: According to Wall Street Journal’s market ratings, Spur is a market leader in the steakhouse arena. The restaurant holds a market share of 3.26% in the food industry with 479 outlets globally, 429 of which are in South Africa.