SA’s Franchise Industry is on the Rise in Time for the Holiday Season

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Spur is one of the restaurants that introduced a drive-thru option.

The franchise sector in South Africa is showing signs of recovery after a difficult period marred by Covid-19, the July unrest and slow economic growth.

FNB data shows the industry’s recovery, which comes just in time for the holiday season, is being led by quick-service restaurants.

Henk Botha, Foodservice Specialist at FNB Franchising, said: “Early data from FNB shows the fast food industry has recovered better than expected, but performance was slightly affected by the July turmoil in the market. Gauteng and KwaZulu-Natal. ”

Botha explained that restaurants as well as cafes and take-out improved by more than 200% between March and May 2021, but South Africa’s tight lockdown in 2020 had an impact on trade by 50%. %.

Restaurants and cafes also recorded an 88% recovery rate between March and May 2021.

The restaurant industry may have been one of the hardest-hit industries in South Africa, but it has resisted despite uncertainty over the continuing impact of the pandemic, as new variants of the virus are discovered, he said.

As for self-driving restaurants, Botha said they have made a full recovery and have, in some areas, exceeded pre-pandemic levels. He added that an agile response and innovation from outlets protected them from some of the impact of the pandemic. Some restaurants that previously did not have drive-thru added the service, while online ordering and delivery platforms cushioned the blow even further.

“The franchise industry’s business model and its ability to innovate and adapt over time has proven to be effective over the years, with the sector contributing 13.9% of the country’s GDP in 2019,” Botha said. .

But the industry will still face the challenge of restrictions linked to the pandemic, people who eat less in restaurants and a tough economy.

“The existence prospects of restaurants and fast food establishments depend on their ability to increase their income by being price sensitive, creating a safe business environment, creating different peak hours and investing in take-out. and delivery, online ordering and player creation – through the platform, ”he said.

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