Franchise Trends and Scope in Africa in 2026

With the Franchise Association of South Africa’s 2026 National Conference and Expo kicking off in Johannesburg today , there is growing evidence that franchising in the country is setting a solid platform for small business growth, not only in South Africa, but across Africa.

South African Franchise Landscape

South Africa’s franchising sector is the most developed in Africa, contributing an estimated 15% to GDP (R999 billion turnover in 2023) and employing around 500,000 people across 14+ sectors (e.g., fast food, retail, automotive). It has seen resilience post-COVID, with a 36% turnover increase from 2019.

• Number of Franchise Systems (Brands/Concepts): in total there were 727 as of 2023 (down from 813 in 2019 and 811 in 2020, due to pandemic closures and consolidation). About 73% are locally developed, while 27% are international franchise businesses (e.g., McDonald’s, Starbucks).
• Number of Individual Franchises (Outlets/Stores): about 68,463 as of 2023 (a 43% surge from the 47,923 in 2019, driven by expansion of larger brands). 91% are franchisee-owned.
• Number of Franchise Owners (Franchisees): Directly tied to outlets, as most are owner-operated. Estimates peg around 68,463 individual franchisees (matching the outlet count, though some own multiple). Ownership diversity has improved: Previously disadvantaged groups hold 48% (up from 20% in 2019), with black ownership at 21% (up from 11%). White ownership dropped to 52% among franchisors and 48% among franchisees. Women and youth involvement is growing, but still under 50% in key roles.
• Trends into 2025-2026: Multi-unit ownership is rising, with brands favoring existing successful franchisees for new locations (e.g., in retail and QSR sectors). This aligns with your insight on concentration—larger systems dominate growth, potentially limiting new entrants. 39% of SA brands operate internationally (mostly in SADC countries).

A View From ABSA Bank About the Future of Franchising

James Noble, Sector Executive: Wholesale, Retail and Franchising at Absa Business Banking, underlines the importance of growing this sector to the economy of South Africa and the wider continent.

If franchise business owners want to scale up and stay ahead of the pack in their retail areas, they must embrace new technology and innovation, or risk being overtaken as the modes of doing business change globally and AI emerges as a critical tool to succeed. 

While the franchise business sector already contributes R1 trillion to the South African economy, there’s optimism for even further growth. Those who succeed will be adaptable, open to data-driven decisions and willing to tailor their business towards a better user experience in an ever-changing trading environment. Being able to contribute towards reconfiguring established best practice when needed – often at a dizzying speed – will be a key driver of maintaining competitiveness, helping brands illustrate their resourcefulness and demonstrating they will not be left behind. A good example of this was during the Covid-19 pandemic when South Africa saw which retailers were quick off the mark to mobilise their same day grocery and retail home deliveries. It was abundantly clear which retailers dithered and were left behind. The early adapters improved their models and are still ahead of the pack. Those who came late to the party may have difficulty catching up. 

AI Adoption For Future Success

Noble notes that It’s inevitable that AI capability will play a far more significant role in driving successful business going forward. Smart business owners know that loyalty programmes steer customer behaviour. To this end, AI is already starting to identify specific customer needs and spending patterns, and tailoring discount vouchers and loyalty points based on what these customers normally purchase. Using predictive demand capabilities, AI will streamline business by analysing past data to predict future orders, for example. Another way AI will contribute will be in solving the often-lengthy times taken for fast food deliveries, a big crunch point for many businesses.

Again, the innovators will be the ones that corner the market in their fields. For instance, we are already seeing the rise of dark kitchens here, where many fast-food outlets are clustered together in an unbranded location under an umbrella shell, so that home deliveries can reach customers faster and smarter. It’s a brilliant solution concept which works well. No one wants a cold takeout, delivered late because the outlet is all the way across town.  

“While the notion exists that AI will deprive people of jobs, this could be balanced by more franchises being established. The FASA 2023 Franchise Survey, sponsored by Absa, indicates that within the sector, each new franchise business brings the potential of eight to 10 new jobs”. “Crucially, for every 14 direct jobs, seven indirect jobs are created in supply chains and support services. Many of these represent material prospects for economic empowerment for women, youth, black owned business and emerging markets in townships and rural communities” Noble states. 

Regional Breakdown in South Africa

The FASA data reflects growing confidence for penetration into underserved markets. Predictably, Gauteng still has the largest amount of franchise outlets at 41%, with 16% in the Western Cape, 12% in KwaZulu-Natal, and the other provinces with a combined 31%. 

The data FASA has mined reveals that as of 2023 there were 68,463 franchisees operating across 727 franchise systems. There was a healthy 43% increase in franchisees operating franchise systems since 2019. Approximately half a million direct jobs were created, representing 4.7% of national employment.

It’s encouraging that according to FASA, 89% of franchisees achieve break even within the first year, up from 69% in 2019. That’s firm testimony to the positive business prospects franchising offers right now. 

Africa’s Franchise Landscape (Continent-Wide)

Data is scarcer and more fragmented, as franchising is underdeveloped outside SA (which dominates with ~80%+ of the continent’s activity). No centralized body like FASA tracks Africa-wide stats, but estimates from Afreximbank, African Development Bank, and industry reports give a picture. The African franchise market is valued at ~$94 billion (2022-2024 est.), with a $7.51 billion financing gap hindering growth. Global franchising hit $133 billion in 2024, projected to $307 billion by 2033, but Africa’s share is small (~2-5%, mostly SA).

• Number of Franchise Systems: No precise total, but SA’s 727 form the bulk. Other hubs: Kenya (~200-300 systems, 12% growth 2020-2025); Nigeria (~150-200); Egypt, Morocco, Ghana (~100 each). Continent-wide estimate: 1,500-2,000 systems (rough, based on regional reports; e.g., East Africa ~400, North Africa ~300).
• Number of Individual Franchises (Outlets): ~100,000-150,000 (extrapolated; SA’s 68,463 is ~50-70%). Kenya: ~5,000-10,000 outlets; Nigeria: ~3,000-5,000.
• Number of Franchise Owners (Franchisees): Similar to outlets, ~100,000-150,000 owners. Concentration is high in urban areas; multi-unit ownership common in mature markets like SA, but less data elsewhere. Ownership often skewed toward elites or foreign investors due to high entry barriers.
• Trends: Growth in Kenya (urbanization-driven), Ghana, Egypt. AfCFTA could boost intra-African franchising, but infrastructure gaps limit spread. Financing issues exacerbate concentration, as banks favor established owners.

Is Franchising a Solution to Growing the SME Market?

Partially yes, but it may not be a silver bullet. While Franchising is a solid tool for SME growth it does come with some with caveats:

• Pros for SMEs: Lower risk entry (proven models reduce failure; FASA notes 89% break-even in year 1). Drives job creation (500K in SA) and inclusion (rising PDI ownership). In Africa, it could “revolutionize entrepreneurship” via AfCFTA, filling gaps in retail/services.
• Cons: Concentration limits broad access; restrictions on product or service offerings can curb flexibility; high fees/royalties (5-10%) squeezes margins. For true SME scaling, franchises should pair with flexible financing (e.g., Afreximbank programs) and policy reforms to reduce favouritism or concentration of ownership.

The longevity and sustainability of businesses in the franchise sector are overall far greater than that of independent businesses. A solid illustration of that is that 80% of franchise businesses are successful beyond three years, whereas 80% of independent SMEs have failed in this period.