Here’s How Much It Costs To Open A McDonald’s Franchise Restaurant In SA

Here’s How Much It Costs To Open A McDonald’s Franchise Restaurant In SA! McDonald’s is one of the most popular and successful fast foods chains in South Africa. Like many other fast food companies in South Africa, McDonald’s has been able to develop its brand through franchising. This allowed the company to give people that have the means and resources a chance for them to own their own business and to strengthen the brand’s value in the country.

Due to the franchise being an already established brand, the cost of buying the franchise is very high, as the company has already invested in brand awareness and people will immediately recognise and trust a franchisee store to deliver the same quality of fast food that any McDonald’s restaurant does, so a franchisee will already have a core McDonald’s customer base that they can start with.

The costs that are involved when one wants to buy a McDonald’s franchise store include a 40% deposit of the total cost when buying a new restaurant and 25% for an existing restaurant. Generally, the company requires a minimum of $500,000 (around R7,5 million) of non-borrowed personal resources for it to consider one for a franchise. While the company requires this payment, it also gives the franchisee an option of repaying the money in instalments over a period of not more than seven years.

When one inks the deal with McDonald’s to open a franchise store, they are also liable to pay ongoing fees such as the 4% service fee which is a taken from the restaurant’s monthly sales and the franchisee will also be required to pay monthly rent.

If the franchisee is successful with their purchase, they also have to have enough capital for the franchise’s equipment and pre-opening costs that can range from R19.2 million to R34,3 million. These amounts are largely influenced by the size of the restaurant facility, area of the country, pre-opening expenses, inventory, selection of kitchen equipment, signage, and style of décor and landscaping.

All these factors need to be taken into consideration when one is choosing to buy a McDonald’s franchise restaurant. One also needs sufficient funds that will be able to purchase the franchise and still be able to successfully launch it, while incurring all these other costs.

By Thomas Chiothamisi