Franchise opportunities across different sectors
Because franchising can be adapted to almost any business sector, the range of franchise opportunities is extensive. A lot depends on whether the offer is a turn-key operation with retail outlets or a man-in-a-van service franchise or a franchise that can be run from home. The return on investment is often linked to the cost of the franchise; a hot-dog trailer may be affordable but the returns are not as high as a high-end restaurant which will cost in the millions to set up and has the potential for high turnovers – so prospective franchisees must always bear this in mind.
Automotive Products & Services
This sector spans a wide array of products and services with many manufacturers securing distribution of their products through franchised fitment and/or retail facilities including auto mechanics, auto body repair, glass repair, battery and tyre replacement, cleaning and valet services and vehicle sales and maintenance. The recession over the past years has meant that this sector has done well as drivers are keeping their vehicles longer and need aftermarket products and services to keep their cars in optimum condition and running well.
In the Automotive Products & Services sector, franchises can range from R1 to R5 million depending on the specialized services they offer. Franchises that target specifics like selling new and reconditioned batteries have franchise opportunities ranging from R500 000 to R1 million.
Building, Office & Home Services
As one of the oldest franchise sectors to be established in South Africa, there has been exponential growth in this sector over the decades with 92% of this sector boasting home-grown concepts. Franchises include concepts such as building services, renovation services, paving & painting services, exterior improvements, kitchen manufacturers, home renovators, tool-hire companies, electrical maintenance and energy-saving concepts. This is a sector that has the potential to grow and incorporate smaller ‘man-in-a-van’ services that are both efficient and affordable.
The price range of franchises varies; if you invest in a comprehensive tool hire concept or a specialized offering like a specialist building franchise you will require an investment of between R2 – R4 million but there are some affordable concepts ranging from R200 000 to R700 000 in renovation, décor and home services.
Business to Business Services
Business-to-business is a fast growing sector that provides services such as business coaches and brokers, accounting services, courier services, printing & signage, business &, recruitment services, financial services and travel services. Established in the main from the 1980’s to the 2000’s in response to a growing need to outsource specialized business services, this sector continues to see growth in recessionary times as businesses downsize and outsource and the nature of business changes as a result of the pandemic and the future in 4IR.
An affordable franchise category that covers a variety of business services including courier, copy & print, digital, accounting and HR services ranging in price from R500 000 to R1 million.
Childcare, Education & Training
These franchises specialize in the full spectrum of education and training from early learning development systems and creative skills to assisting primary and high-school learners in subjects ranging from English to Math’s. Children-specific franchises are becoming increasingly popular as parents are investing more and more in the physical and mental well-being of their children.
Adult education and training franchises focus on everything from computer-based skills to life-skills training.
One of the most affordable franchise categories as it does not necessarily require a turn-key operation with premises, the options range from as low as R50 000 for a children’s skills, exercise and play option to the more specialized developmental and adult education options which range up to R600 000.
Health, Beauty & Body Culture
The growth in the market for health, beauty and body products and services has been met by significant growth in the number of franchises and outlets in this category over the past twenty-five years. This is also the category that appeals the most to women and where one finds specialist female concepts such as beauty salons, hair salons, nail bars and spas. Gym and fitness franchises, personal training and diet and health clinics also fall into this category.
The price range of franchises in this sector depends on the brand equity and nature of the business. A hair salon/barber and beauty salon concept ranges from R1 million whilst exercise franchises can cost more depending on the infrastructure required.
Personal & Professional Services
A small category with huge potential, the personal and professional services sector comprises services offered with specialized skills, knowledge and resources not necessarily available to an individual or a company. Personal services include specialist services such as shoe repair, dry-cleaning and valet services, pet grooming and even funeral services. Internationally, transport and chauffeur services are becoming viable franchise options, as are professional services such as specialized senior care, health-care and lifestyle management services.
Most concepts in this category – which range from assisted nursing to shoe repair and dry-cleaning to pet-grooming – cost from R300 000 whilst a funeral franchise will require an investment of close to R3 million.
Real Estate Services
This sector enjoyed unprecedented growth during the boom housing market which was when most of the franchised companies were established and by virtue of the franchised model, this area has grown and enjoys ongoing success. Opportunities in real estate include peripheral services including business brokerage, property consulting, home-financing, leasing and home inspections.
Franchise opportunities exist to buy into well-known real estate brands and these range from R500 000 to R1.5 million according to potential market share and size of territory. This sector does, however, require that estate agents are fully qualified and registered in order to operate.
Restaurant & Quick Service Restaurant Sector
By far the biggest and most popular of the franchise sectors, having started in South Africa in the 1960’s and with eating out such a popular pastime, it’s no wonder that food and restaurant franchises make up the biggest sector in franchising. The choice is wide – from a full sit-down restaurant to a Quick Service outlet which is a blend between fast-food and casual dining to a fast food franchise to pub concepts, specialized food concepts to even food trucks – with the price varying from a couple of hundred thousand into the millions.
The more well-known the brand, including the international brands, the higher the cost as they offer a prime opportunity in key positions with sophisticated support systems. There are a number of smaller, emerging concepts that are up-and-coming and affordable from around R1 million in the take-out (QSR) sectors that include chicken, fish and pizza options.
Retailing & Fast Moving Consumer Goods (FMCG)
The second biggest sector in franchising, the retail sector contributes the most in the labour market employing the highest number of people. As these franchises occupy key trading points in shopping malls and high streets, their brand equity and recognition is high. Franchises range from those in the Fast Moving Consumer Goods (FMCGs), supermarkets, liquor stores and convenience stores to cellular retail, fashion, accessories and apparel; hardware, furniture and second hand stores.
As most of these concepts require large premises and are sophisticated retail outlets, the set up costs are high – ranging from R300,000 to up to R20 million but there are some affordable opportunities in the smaller DIY stores or water supply stores ranging from R300 through to R1.2 million.
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