Famous Brands has successfully launched a Steers and Debonairs combo in Malaysia, marking the group’s entry into the market, which it is quite optimistic about.

This, despite the group’s other international operations in the UK, the Middle East and Africa struggling in the past financial year.

For the full year ending February 2026, Famous Brands recorded solid results, with revenue jumping to R8.74 billion, up from R8.28 billion the year prior.

Operating profits were up to R956.6 million for the year (from R916.1 million in 2025), with headline earnings recorded at R584 million (up from R520 million the year prior).

The group declared a final dividend of 220 cents per share (2025: 195 cents per share) to the
amount of R220.4 million.

This, it said, reflected its stable financial position, despite the challenging economic environment.

According to the group’s results, much of its success is tied to South Africa, where most of its restaurants and franchises operate.

The group has a total of 3,043 restaurants across South Africa, the SADC region, the Rest of Africa and Middle East (AME), and the United Kingdom.

The restaurants are split among its Leading brands (Steers, Debonairs, Fishaways, Wimpy, etc), Signature brands (LUPA, Mythos, Salsa, Turn n Tender, etc) and other brands segments.

The leading brands segment focuses on mainstream quick-service and casual dining brands and generated the bulk of the group’s restaurant revenue in South Africa at R1.03 billion (2025: R969.3 million).

The Signature segment consists of niche brands and generated R201.8 million in revenue, a marginal increase from R198.3 million in 2025.

In terms of profitability, however, the contrast is stark, with Leading brands generating R541.85 million in operating profit, and Signature brands posting a R10.59 million loss.

While overall segment revenue increased marginally, core franchise-related income declined, including franchise and marketing fees.

The segment also experienced higher operational costs against the backdrop of poorer economic conditions in South Africa.

These include elevated food and fuel prices and supply chain disruptions, which disproportionately affect niche and casual dining brands where consumers may be more price sensitive.

Despite this, the group said that it remains optimistic about the business, noting that it has made a concerted effort to address areas of non-performance.

“This should be evident in our 2027 results. We are confident in our growth prospects across formats, technology and menu development.”

Expanding beyond South Africa

One of the more notable areas for prospective growth is the company’s expansion plans, particularly in new markets.

It said that investment is being directed towards delivery channels, smaller-format restaurants, and drive-thrus to meet sustained demand for convenience.

“Our restaurant pipeline is healthy, with interest from both new and existing franchise partners,” it noted.

“Expansion in the SADC and AME regions will be pursued through a measured and targeted approach, focusing on selected priority markets.”

The group said it has restructured its AME management team to reduce costs, including bringing its Dubai operations back to South Africa.

However, it is really bullish on prospects in Malaysia, following the opening of a combo Steers and Debonairs Pizza restaurant in December 2025.

This was done in partnership with MESRA, a wholly owned subsidiary of PETRONAS Dagangan Berhad, it said.

Entering the new markets and expansion will be tested by strained international operations, especially in the United Kingdom.

The group suffered an operating loss in the UK Wimpy segment, which amounted to R9.5 million for the 2026 financial year, compared to a R7.1 million profit in 2025.

Revenue for the UK segment fell by approximately 9.4% to R119.2 million, down from R131.6 million in the prior year.

This was primarily driven by declining revenue and a difficult macroeconomic environment, it said.

Similar pain was felt in the Rest of Africa and Middle East region, where the group suffered a R34.8 million operating loss—however, this was narrowed from the R42.7 million loss the year before.

Source: BusinessTech – www.businesstech.co.za

The post Two Of South Africa’s Most Popular Fast-Food Brands Going International. appeared first on SA Franchise Brands.

Franchise ownership remains one of the most effective routes into sustainable entrepreneurship. With over 45 years of experience in SME financing, Business Partners Limited has introduced the Basadi-Women Growth Fund to support women entrepreneurs through franchise-based business ownership.

The fund is designed to empower women-led businesses by offering finance ranging from R250 000 up to R5 million. A key focus of the fund is start-up franchise finance, providing women entrepreneurs with the capital needed to launch within established franchise systems.

Funding can cover up to 100% of the costs required to start and set up a franchise, including franchise fees, fit-out costs, equipment, and initial working capital. In addition, the fund can be used for property acquisition, asset or equipment finance, acquisitions or takeovers, replacement finance, and ongoing working capital needs related to franchise operations.

Through the Basadi-Women Growth Fund, Business Partners Limited is enabling women to build scalable and sustainable businesses by leveraging the structure, support and proven models offered by franchise ownership.

For more information and to apply, visit – https://www.businesspartners.co.za/basadi-women-growth-fund/

The post Empowering Female Franchise Owners: Fund For Women Entrepreneurs. appeared first on SA Franchise Brands.

One of the most common and costly mistakes in franchising starts with a single phrase: “selling franchises.”

At first glance, it sounds harmless. After all, franchisors want to grow, and growth means bringing in new franchisees. But the language we use shapes the way we think, and when the mindset becomes about selling, the focus shifts to persuasion, pressure, and closing the deal.

That’s where the risk begins.

When prospective franchisees are sold an opportunity rather than educated about the responsibility, they often enter the relationship with unrealistic expectations. They hear about the rewards, but not always the realities. They imagine freedom, flexibility, and financial success without fully understanding the discipline, commitment, and accountability required.

Then reality arrives.

The long hours. The operational standards. The financial pressure. The hard work of building a business. And when that reality doesn’t match the sales narrative, disappointment quickly turns into frustration. Frustration turns into conflict. And conflict can damage both the franchisee and the brand.

Professional franchising takes a very different approach. It doesn’t focus on selling; it focuses on recruiting the right fit. Franchise recruitment should be a two-way assessment. Yes, the prospective franchisee is evaluating the brand, but the franchisor should be evaluating them just as carefully.

Are they aligned with the brand’s values?

Do they understand what the business really demands?

Do they have the mindset, resources, and commitment to succeed?

Great franchisors know that every new franchisee is more than a sale, they are a long-term business partner. That means the goal is not to convince someone to buy. The goal is to help the right person make the right decision. Sometimes that means saying “no.” And that’s not a missed sale, it’s a smart business decision.

The strongest franchise networks aren’t built by aggressive sales tactics. They’re built through careful selection, honest conversations, and mutual commitment.

So, stop asking, “How do we sell more franchises?”

Start asking, “How do we recruit better franchisees?”

That mindset shift changes everything.

It’s Not Who You Know, It’s Who Knows You™

CEO – SA FRANCHISE BRANDS

The post Why “Selling Franchises” Is The Wrong Mindset. appeared first on SA Franchise Brands.

Plato Coffee is set to open its first store in the UK in April of this year, with the coffee chain undergoing a massive expansion since its start in a shipping container in Centurion.

CEO Stephan Bredell said that Plato will open a new store in London at the following address: Bishopsgate, 8–9 Norton Folgate, E1 6DB

Bredell said that the new store will open on 7 April 2026. It will mark the franchise’s first foray out of Africa.

The franchise has over 100 stores across South Africa. It has already expanded out of South Africa, opening a store in Harare, Zimbabwe, in November last year.

Plato has undergone a massive expansion since it was opened by Stephan and his brother Petrus, who started the brand in a container store in Centurion.

Their first store was traded under an informal licence. The brothers would capitalise on the growing foot traffic during the COVID-19 lockdown periods.

The brothers’ expansion plan across South Africa differed from most coffee chains, with a greater focus on underserved areas, including lifestyle centres and smaller towns.

They quickly built a loyal customer base and created a recognisable brand without relying heavily on advertising.

Many customers shared their positive experiences online, helping boost the brand’s visibility. Many were drawn to some of the outlets’ long operating hours, which helped meet the varying needs of its clientele.

The chain’s clean, simple aesthetic held it apart, with stores also having a more intimate, community-focused character than its competitors.

In 2022, Plato introduced a franchise model, helping it expand to over 100 locations and hire 500 employees.

“People often think Plato is an overnight success, but I know better. What looks like momentum today was built on years of blood noses, heartaches, tough lessons, and many failures, long before the model finally clicked,” said Stephan.

“Plato isn’t just a 6-year story; it’s closer to a 20-year journey of learning, refining, testing and staying in the game long enough when things didn’t make sense.”

Not just stores

Plato Founders, Stephan and Petrus Bredell

Outside the store expansion, Plato has also undertaken a series of initiatives, including opening its own academy on Canterbury Street in District Six, Cape Town.

The academy serves as a training centre for franchise partners, baristas and the wider public.

The academy offers barista courses, workshops, classes on latte art, and other practical training for coffee lovers.

“From foundational barista training to latte art workshops and sensory experiences, each session is crafted to elevate your understanding and appreciation of coffee,” said Bredell.

The academy also features a showroom for professional coffee equipment, serving as a meeting point for professionals and casual coffee lovers.

While being a coffee retailer, Plato is also making an interesting play in loyalty, partnering with Yoco.

Plato was the first company in South Africa to roll out Yoyo’s bank card-linked loyalty system, where customers automatically earn rewards every time they tap to pay, with no other loyalty card needed.

Customers earn 5% cashback, which is reflected in their Plato app. The cashback can then be used at any Plato store in South Africa.

Rewards are embedded in the payment process, so customers only need to pay with their card or smart wallet at the payment terminal.

Source: BusinessTech – www.businesstech.co.za

The post Popular South African Coffee Company Launching In The UK. appeared first on SA Franchise Brands.

Seattle Coffee Company was started by Americans in London, and has quickly grown to over 300 locations in South Africa.

Seattle was founded in London by husband-and-wife team Alley and Scott Svenson, who wanted to bring the experience of speciality coffee brands from their hometown of Seattle.

The company was introduced to South Africa by friends Pete and Barry, who opened the first store in Cavendish, Cape Town, in 1997.

The South African entity now remains independent of any international parent company and runs as a local family-run business.

Food Lover’s Market acquired a majority stake in the business in 2015, but it continues to operate independently.

Speaking with BusinessTech, Jared Jabour, Managing Director of Seattle, broke down the business’s expansion plans

The group now has 325 locations across South Africa, with more stores set to open in the coming years.

Jabour said that the group plans to open 40 locations in the current financial year, which ends in February 2026 (2026 financial year).

The group also plans to open another 40 stores in each of the 2027 and 2028 financial years.

Jabour said that its current locations vary from cafes to convenience stores across the country, with the group having strong relationships with Sasol and Ashtron/Caltex.

In addition to its South African operations, the company also has locations in Namibia and Zimbabwe, with its first store opening this year to great success.

Seattle plans to open new locations in Swakopmund and Walvis Bay, Namibia, soon, with all prior locations having been in Windhoek.

Jabour added that many landlords have been knocking on Seattle’s doors to expand their presence in South Africa and its neighbouring countries.

However, the majority of its locations are company-owned, which means that the company acts with caution as it needs to build cash before expanding.

Jabour said that training, building infrastructure, and creating the supply chain are not easy endeavours.

The group has a franchise model with its regional partners, who have the right to expand Seattle in certain regions.

While the company has rights in the Western Cape, inland South Africa and Namibia, regional partners are present in Kimberly, Knysna, KZN, Mpumalanga and Zimbabwe.

Price relief potentially on the cards

Coffee has experienced some of the most significant price increases over the last couple of years, with September 2025 recording an improved inflation rate of 9.0%.

Coffee prices have risen amid adverse weather conditions, increasing production costs and stronger global demand.

Jabour said that Seattle speaks directly with its suppliers to understand the conditions facing farmers, and he believes that cost pressures should start to ease.

From his perspective, he believes that cost pressures should start easing in the coming year.

He said that cost pressures are starting to stabilise, but warned that other shocks are still possible.

Even if input costs do start declining, Jabour said that customers are unlikely to see the cost changes immediately, as retailers act with caution.

While coffee is the group’s dominant category, Jabour said that the company is expanding into other products, including smoothies with long shelf lives.

Although the company is keeping an eye on the growing trend of Matcha, he said that the company is not quick to move on trends, as it likes to perfect its offerings before going to market.

Seattle Coffee Co. Images

Source: BusinessTech – www.businesstech.co.za

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Most franchisor–franchisee conflict doesn’t begin with poor performance, market conditions, or even financial pressure. It begins much earlier, with unmet or misaligned expectations.

Franchisees often enter a system expecting consistent, hands-on support, powerful national marketing, and fast brand expansion. Franchisors, on the other hand, expect franchisees to be self-driven, financially disciplined, and operationally capable from day one. Neither side is inherently wrong, but when these expectations are not explicitly defined and reinforced, friction is inevitable.

Silence is the real culprit.

When expectations are assumed rather than communicated, both parties begin to fill in the gaps with their own interpretations. Franchisees may feel abandoned when support is less intensive than anticipated. Franchisors may grow frustrated when franchisees fail to meet performance standards they believed were clearly understood. Over time, this disconnect erodes trust which is the foundation of any successful franchise relationship.

Expectation-setting is often treated as part of the sales process, something to help close deals and onboard new franchisees. This is a critical mistake. It is not a sales function; it is a leadership function.

Strong franchise systems recognise that clarity upfront prevents conflict later. They invest time and effort in educating prospective franchisees not just on the opportunity, but on the reality. They communicate what success requires: the hours, the discipline, the financial resilience, and the operational standards. They are equally transparent about what the franchisor will provide, what support looks like in practice, and what falls outside their scope of responsibility.

This level of clarity may slow down recruitment, but it dramatically improves alignment. And alignment is what sustains long-term growth.

Franchise relationships don’t fail because of a lack of opportunity, they fail because of a lack of shared understanding. The most effective franchisors don’t leave this to chance. They lead with clarity, reinforce expectations through training, and maintain open, consistent communication.

Because in franchising, silence is never neutral, it is destructive.

Clarity prevents conflict.

It’s Not Who You Know, It’s Who Knows You™

CEO – SA FRANCHISE BRANDS

The post The Silent Franchisor – Franchisee Relationship Killer. appeared first on SA Franchise Brands.

Younger entrepreneurs are reshaping the franchising landscape, bringing technology fluency, a desire for purpose-driven work and a fresh approach to business ownership.

Opinions expressed by Entrepreneur contributors are their own.

Key Takeaways

• More young entrepreneurs are pursuing franchise ownership earlier in their careers compared to generations before them. This surge is driven by a number of factors.
• Franchisors that modernize training, streamline operations and provide clear growth paths can attract and empower this next generation of leaders.

Franchising has always been a pathway for people seeking a proven business model, an established brand and a long-term financial opportunity. However, in recent years, we’ve seen a dramatic shift in who is seizing this opportunity. More young entrepreneurs — particularly Gen Z and younger millennials — are pursuing franchise ownership earlier in their careers compared to generations before them. What was once considered a late-stage career move has become a launchpad for ambitious young business owners.

I’ve seen firsthand just how quickly younger owners are entering and excelling in this industry, with their motivations, skillsets and expectations reshaping franchising. Every brand needs to be ready for this shift in ownership as younger franchisees are seeking entrepreneurial endeavors. In fact, in a 2020 survey by WP Engine and the Center for Generational Kinetics, nearly two-thirds of Gen Z (62%) said they have started or want to start their own business.

Here’s what’s driving the surge of youth in franchising and what franchise brands and young entrepreneurs should both know.

Why younger entrepreneurs are choosing franchising

A safer on-ramp to business ownership

Starting a business from scratch can be overwhelming, especially for someone in their 20s or early 30s. Younger entrepreneurs are increasingly drawn to franchising because it provides a structured, lower-risk pathway into business ownership through pre-established systems — like marketing, operational frameworks, training and support — already built into the model.

For those without decades of industry experience, franchising offers a roadmap by eliminating guesswork, shortening the learning curve and giving younger owners the confidence that they aren’t navigating their journey alone.

A desire for flexibility and autonomy

Younger generations have redefined what they want from their work lives. Flexibility and autonomy matter more than ever. Many want to build something of their own, but not at the expense of their lifestyle goals.

Franchising offers a unique balance: the stability and backing of an established brand, combined with the freedom to own and operate a business on their terms. In service-based industries like commercial cleaning, franchise owners can control their schedules, scale at their own pace and manage teams with a high degree of independence.

Better access to capital

Historically, funding was a major barrier for younger entrepreneurs, but today, that challenge is minimized. Small-business loans, SBA programs and franchise-friendly financing options are making it easier for first-time business owners to access capital.

As financing becomes more accessible, we’re seeing more franchise candidates in their 20s and 30s making the leap — especially in lower-cost franchise systems where the initial investment is more within reach.

Digital natives are built for today’s franchise landscape

Nowadays, technology touches every part of the franchising experience, from marketing, scheduling, staffing and operations, to communication, customer experience and more. Younger entrepreneurs, having grown up with much of this technology, are uniquely equipped to thrive in this environment.

Tech as a competitive advantage

Younger franchise owners tend to embrace operational software, automation tools, CRM platforms and digital marketing at a pace that often outperforms more traditional owners. Their experience and familiarity with technology encourage them to leverage data and trends to improve efficiency and customer satisfaction.

At Image One USA, we’ve seen younger franchisees quickly adopt our technology systems — from inspection platforms to real-time customer communication apps — with enthusiasm. Their comfort with digital tools helps them hit the ground running.

Purpose and community matter more than ever

For many young entrepreneurs, owning a business isn’t just about income; it’s about alignment with values.

Younger business owners want to feel connected to what they do. They care about sustainability, ethical practices and meaningful impact. Those franchises that demonstrate strong values and community involvement will have a major advantage in attracting young talent.

Built-in mentorship and support

Younger entrepreneurs actively seek mentorship and hands-on guidance. Franchising provides a built-in support network, from training and operations to peer groups and ongoing coaching.

A collaborative support model can resonate strongly with younger owners who are looking for transparency, open communication and strong leadership from their franchisor — and they perform better because of it.

What this shift means for franchise brands

The growing youth movement in franchising is exciting, but it also requires franchisors to evolve. Younger entrepreneurs learn differently, expecting digital resources, multimedia modules and clear, accessible documentation. Franchise systems that still rely solely on in-person instruction or paper manuals risk alienating this demographic.

Technology must also be seamless, as brands with outdated operational systems will be immediately noticed by younger candidates. Franchisors should prioritize regular audits of their tech stack to ensure that communication, data management and operational tools are intuitive and efficient for those who will use them.

Equally important is communication. Younger owners value transparency and authenticity, and they expect real-time access to information. Brands that use digital message boards, shared workspaces and franchisee portals to maintain open lines of communication will earn their trust.

Finally, franchisors must recognize that clear growth paths matter. Many young franchisees are thinking well beyond single-unit ownership, looking for opportunities to scale, take on leadership roles and build long-term business portfolios. Brands that highlight and support these pathways will easily stand out in a competitive market.

The future of franchising is being built by young people

Younger entrepreneurs are bringing innovation, passion and a fresh approach to franchising. Their comfort with technology, desire for meaningful work and willingness to embrace structured business models make them a powerful force shaping the future of the industry.

For franchisors, this generational shift is an opportunity — not a challenge. Brands that modernize their systems, invest in support and align with the values of younger owners will thrive.

As someone who has spent decades in franchising, I’m more encouraged than ever by the next generation. They’re committed, capable and ready to lead. The surge of youth in franchising isn’t just a trend; it’s the beginning of a new era of entrepreneurship.

Source: Entrepreneur – www.entrepreneur.com

The post Why Young Entrepreneurs Are Flocking To Franchising — And What It Means For Your Brand. appeared first on SA Franchise Brands.

South Africa’s economy showed signs of improvement in 2025, but for most businesses the environment remains tight. Consumers are under pressure, growth is uneven, and even established retailers are reassessing their competitive strategies.

Karen Keylock, Head of Retail Services at Nedbank Commercial Banking. Image supplied

Yet in the midst of this cautious recovery, one model continues to demonstrate resilience: franchising.

Franchising is often discussed as a business format. I would argue it is something far more powerful. Done correctly, it is a system that converts entrepreneurial ambition into scalable, job-creating enterprises — and that makes it a meaningful lever for national growth.

Structure turns ambition into scale

South Africa does not lack entrepreneurial energy. What it often lacks is structure. Independent start-ups frequently struggle under the weight of rising costs, compliance complexity, and inconsistent consumer demand.

Franchising addresses this gap. It provides a proven operating model, brand equity, established systems, and ongoing support. But more importantly, it gives entrepreneurs a framework within which they can focus on execution rather than experimentation.

Through Nedbank’s franchiser mentorship sessions — hosted in partnership with franchise coaches and industry experts — one message consistently emerges: franchising works, provided it is done right.

The difference between average and exceptional franchise systems rarely lies in the product. It lies in the people.

People are the real multiplier

Strong franchise systems are built on aligned operators. Over time, a clear pattern has emerged: resilience, integrity, and passion for the brand are far more predictive of success than technical expertise alone.

The advice often shared in mentorship forums is simple but powerful: hire the values, then teach the skills.

Franchisees who believe in the brand stay longer, deliver consistent customer experiences, and often grow into multi-unit operators. That is where real economic impact begins to compound. A stable store in a small town creates jobs. A multi-unit owner creates many more.

When operators are aligned and committed, franchising does more than replicate stores — it replicates opportunity.

AI as an enabler, not a replacement

However, people alone are not enough. The modern franchise network also needs the right tools.

Artificial intelligence is becoming an increasingly important enabler across franchise systems — not as a substitute for leadership or judgment, but as a way to strengthen decision-making. From demand forecasting and compliance management to reducing manual administration and improving financial clarity, AI allows franchisees to focus on growth rather than firefighting.

In a pressured economy, clarity is power. Operators who understand their numbers make better decisions. Systems that anticipate demand perform more consistently. And consistent performance builds resilience.

Partnership drives performance

The most successful franchise networks share another common trait: strong partnerships.

Thriving systems are built on regular engagement, open communication, clear expectations, ongoing training, and recognition of strong performance. Franchisees who feel supported are more likely to reinvest, expand, and create stable employment.

Financial institutions also have a role that extends beyond funding. Franchisers repeatedly emphasise that what they value most is not simply capital, but a financial partner who understands their operating model, recognises their pressures, and backs their long-term ambition.

Alignment between franchiser, franchisee, and financial partner creates momentum. Without it, growth stalls.

A national growth engine

In uncertain economic cycles, many independent businesses struggle to survive. Well-structured franchise systems, by contrast, are designed to withstand pressure. They combine brand equity, operational discipline, trained operators, and increasingly, intelligent tools.

This is franchising’s broader contribution to South Africa. It builds businesses that stay open through volatility. It creates employment across metros and smaller towns. It keeps money circulating in local communities.

If we are serious about unlocking South Africa’s entrepreneurial potential, we must recognise franchising not as a niche sector, but as a scalable growth engine.

When strong operators, disciplined systems, enabling technology, and supportive financial partners align, franchising does more than grow brands. It builds resilience. It builds jobs. And ultimately, it helps build South Africa.

Source: BizCommunity – www.bizcommunity.com

The post Franchising Emerges As South Africa’s Unlikely Economic Saviour. appeared first on SA Franchise Brands.

For a franchise, choosing the right site is one of the most important decisions it will make and getting it wrong can cost millions in lost revenue. This is a reality faced by many franchises across South Africa today. The consequences can be severe, weakens a brands turnover, splitting its customer base, cannibalise nearby store revenue, and slowing growth across the entire network.

That is why expansion should never be based on gut feel, traffic at a traffic light, or a property developer’s sales pitch. It should be based on facts.

GeoScope’s approach helps brands decide where to locate stores and expand their franchises by using demographic, lifestyle, shopping mall, retail outlet and consumer data rather than simply using guesswork.

The reality is that customers do not always shop at the closest outlet. They shop where it is easiest, fastest, safest, or most convenient to access.

That is why franchise planning must ask those more difficult questions – where are the best customers located to help stores reach their income targets, where are the strongest opportunities to open new outlets that can reach revenue maturity quickly, and which retail nodes attract the customers are most likely to maximise a stores performance?

What makes this even more powerful for franchise brands is GeoScope’s unique South African data. Its 2024 demographic estimates show where people live at a neighbourhood level, while income and LSM data help brands understand local buying power and the type of customer each area can realistically support.

GeoMAPS consumer behaviour data adds another essential layer by showing what people buy, where they shop, and how much they spend. For franchise brands, this enables better site selection, sharper customer targeting, improved product fit, more focused marketing campaigns and a far greater chance of opening in the right place the first time.

Just as importantly, township data helps franchises identify opportunities that are often overlooked when decisions are based only on limited insights. Many franchises want growth, but real growth comes from knowing where demand is rising, where underserved customers are located, and where the brand is most likely to succeed.

GeoScope provides franchise brands with the data they need to make informed decisions about where to locate new stores and for more advanced planning it also offers gap analysis or white spot studies. This gives franchises a practical way to grow with less risk and more confidence.

Before you open your next outlet, make sure your data is working as hard as your brand is. Let GeoScope help you build your franchise brand on insight, not instinct.

It’s Not Who You Know, It’s Who Knows You™

CEO – SA FRANCHISE BRANDS

The post Why Franchise Growth Starts With Smarter Data-Driven Site Selection. appeared first on SA Franchise Brands.

Multi-unit franchising is expanding across South Africa, with growth no longer limited to the restaurant sector. Franchisees in grocery, liquor, retail and education are increasingly considering adding more outlets, but industry specialists warn that success with one store does not guarantee success with several.

Source: Pexels

Henk Botha, franchise specialist at FNB South Africa, says established brands are increasingly favouring existing operators when awarding new outlets. While this creates opportunities, he says expansion should be approached with the same level of scrutiny as entering franchising for the first time.

One of the main decisions facing franchisees is whether to grow within their current brand or move into another. Botha says cross-brand expansion is often restricted by franchise agreements, which typically limit outside business interests. Franchisors generally require owner-operators to remain focused on their brand and may only approve additional ventures if they do not compete for market share or management attention.

He adds that expansion works best when businesses complement each other. Examples include grocery operators adding liquor outlets or hardware retailers introducing tool hire services, where customer bases and operations align.

Even within a single brand, location strategy is a key risk. Opening outlets too close together can result in stores competing for the same customers, reducing overall growth while increasing debt and operating costs. This can become problematic from a funding perspective if revenue gains do not match higher financial commitments.

Funding new outlets using profits from existing stores also carries risk. Supporting a struggling new store can quickly erode the performance of stronger outlets, particularly when franchisees take over underperforming locations. While some operational issues can be fixed, turnarounds may take longer and cost more than expected.

Cash flow pressure is a major consideration. Botha says a lower purchase price does not offset the ongoing strain of an unprofitable business, and walking away from an apparently attractive deal can sometimes be the better financial decision.

He notes that managing multiple outlets also requires a shift in role. While some franchisees can oversee up to six or seven outlets, beyond that point formal management structures, administrative support and stronger operational systems become necessary.

According to Botha, sustainable multi-unit growth depends on operational readiness, financial capacity and strategic alignment. Without these, expansion can turn a strong single outlet into a financially stressed group of stores.

Source: BizCommunity – www.bizcommunity.com

The post Multi-Unit Franchising Grows, But Expansion Risks Rising, Says FNB Specialist. appeared first on SA Franchise Brands.