When operating under an already established company’s name, products and services can be a very lucrative venture. Hence, in this simple guide, we are going to present an educative model to our readers on how to start a franchise business in South Africa.
So, we entreat you to keep reading because the following chapters of this article consist of a detailed piece of information on how to start your franchise business.
Choosing a good brand and product are the key tools to your success in the franchise business, so there’s the need to conduct extensive research into the choice of franchise you wish to settle for.
The following information is a guide on how to start, run and manage your franchise business in South Africa.
Table of Contents
What You Need To Start A Franchise Business In South Africa
To make your franchise business dream a reality, consider meeting the following requirements:
1. Business Plan: build a good business plan, the franchise business can be costly depending on your choice of a franchise, so it is important to build a good business plan that coincides with your startup capital
2. Choose a Franchise: make the right choice of a franchise with a high marketing demand to help fast-move the business
Market Research: make extensive research into the market of your choice of franchise.
Meet the franchisor and seek more information on how products are selling on the market.
You can also meet already established franchisees and make inquiries into the market status of the franchise you’ve chosen to invest in
3. Business Location: make the right choice of business location that is easy to locate and accessible by customers
Learning how to spot a good location is vital for your business’s success. Therefore location must be chosen using the marketing status of the area.
4. Find a Lease Retail Space: after spotting a potential location, search for the available retail space for your business, and your business premises must be spacious enough to host and serve customers
5. Staffing and Staff Training: hiring qualified staff, consider work ethics, commitment, and loyalty towards your business
The staff helping you to operate your franchise business are the sole determinants to whether customers will keep coming or recommend you to friends and families.
6. Target Market: knowing your target market is very important. It will help you know what customers want and why they want it
7. Registration of Business: Register your business with the Companies and Intellectual Property Commission (CIPC) for your business certification
Also, you must register with the South African Revenue Service (SARS) for your taxation.
8. Franchise Agreement: sign a franchise agreement with the franchisor, to make a legal acquisition of the franchise
9. Advertisement/Marketing: choose the effective ways of advertising your franchise, which includes local newspapers, SMS, Social media, flyers, and business cards
How Much Does It Cost To Start A Franchise Business In South Africa
Different franchise business comes with different startup cost, and the franchise business is capital intensive to establish which means you have to be fully grounded in finances to be able to set up, run and manage a franchise in South Africa.
Setting up a franchise business can cost as high as R4 – 6 million in South Africa and as low as R500,000 – 1 million.
Is The Franchise Business Profitable In South Africa
In the franchise business, you’re not yet building a brand from scratch. The brand of the franchise already exists with a high marketing demand.
Your work is to locate a good thriving business location and start making a profit in the name, logo, and other documentation of the franchisor.
The franchise business is one of the lucrative businesses to establish in South Africa and comes with an estimated monthly salary of about R30,000 – 80,000.
Best Places To Start A Franchise Business In South Africa
The franchise business can be operated at many locations but for a handsome profit, consider the following locations:
1. Places with higher foot and vehicular traffic
2. Along main roads
3. Business centers
4. Commercial areas
How To Make Your Franchise Business Successful In South Africa
If you want to run a successful franchise business in South Africa, it is required to consider the following factors:
1. Good customer relationship is required
2. A good and effective marketing strategy
3. Affordable pricing of products
4. Right choice of staff with good work ethics keeps customers coming for more of your service
5. Commitment and hard work
Challenges Of The Franchise Business In South Africa
Below are some of the challenges faced in the franchise business in South Africa:
1. High startup cost
2. The risk involved in investing a huge sum of money
3. Sticking to certain rules from the franchisor
4. Long and though approval from the franchisor
Benefits Of Setting Up A Franchise Business In South Africa
The following are some of the benefits gained on setting up a franchise business in South Africa:
1. It comes with a reward of handsome profit
2. Generates income for the government
3. Creation of jobs
4. It helps bring highly-rated products onto the local market
That is the information we can provide on how to start a franchise business in South Africa.