- South Africa’s bar and restaurant trade generates annual income within the tens of millions.
- Much of this flows by way of established bar and restaurant manufacturers, lots of that are in the stores and run as franchises.
- But they don’t seem to be low cost – you’ll be able to anticipate to pay tens of millions for a recognised bar franchise like Tiger’s Milk or News Café, and ongoing royalties of as much as 9%.
- For extra monetary information, go to the News24 Business front page.
South Africa’s bar and pub scene has modified considerably in recent times – notably in relation to nationwide franchises.
What was as soon as a market dominated by a handful of conventional pubs and bars has seen the road blurred between bar, pub, and restaurant – to create a safer jack-of-all-trades mannequin.
Many South African bars now are inclined to look extra like eating places – doing quieter commerce throughout daylight and ramping up with reside music, DJs, and drinks specials within the evenings.
They additionally are inclined to serve easy meals like burgers and pizzas all through the day and late into the night – a transfer that seemingly will increase the attraction and potential income versus the times of grabbing a number of night pints on the bar.
It’s a transfer that appears to be paying off for some franchisors. The bar, restaurant, and canteen trade is forecast to see income of over R100 million in 2023 – and South Africans have a problematic love for alcohol that is additional driving income within the liquor commerce.
The hybrid mannequin might enhance potential income for particular person shops – however including full-service kitchens, extensive menus, and greater flooring house additionally will increase institution prices.
It’s not one thing that seems to have restricted the rollout of some bar franchises.
Newer franchises that exploit this hybrid mannequin, like Life & Brand’s Tiger’s Milk, and to a lesser extent La Parada, have seen important enlargement in recent times. Industry stalwarts, like News Cafe and Cubaña, have misplaced a number of branches in recent times however remained in any other case steady with nationwide retailer networks.
Here’s how a lot it prices to open a bar or pub franchise like Tiger’s Milk, La Parada, Rhapsody’s, News Cafe, Cubaña, Bossa, or Brazen Head:
The Brazen Head
The Brazen Head is likely one of the few remaining Irish pub-style franchises obtainable in South Africa. The first Brazen Head franchise retailer opened in 2003, and though progress has been muted, there are actually 5 branches, primarily in Johannesburg’s northern suburbs and East Rand.
The pub presents quite a lot of related meals and drinks for night leisure, with some shops branching out into lunch and breakfast, too.
Cost to open a Brazen Head franchise: A brand new Brazen Head franchise requires a R120 000 franchise payment and advisable capital of R150 000. Establishing a department prices an estimated R2.4 to R3.5 million. Franchisees should pay ongoing promoting, advertising and marketing, and administration charges totalling 7% of turnover.
Tiger’s Milk
Tiger’s Milk began as a single retailer in Cape Town’s Muizenberg and has seen fast enlargement in recent times. There are actually greater than 20 branches situated all through the nation, with a robust give attention to what they name “dude food” and a variety of alcohol merchandise.
Much of their enlargement has come by way of a franchising mannequin overseen by Life & Brand, who additionally promote comparable franchises within the restaurant house.
Cost to open a Tiger’s Milk franchise: A brand new Tiger’s Milk franchise requires an preliminary franchise payment of R400 000, and constructing out a brand new department prices roughly R15 000 per sq. metre. Once established, franchisees should pay 8% of month-to-month turnover in the direction of administration and advertising and marketing charges. In complete, franchisees will want between R6 and R8 million to purchase a brand new Tiger’s Milk retailer.
La Parada
La Parada is a tapas bar that began on Cape Town’s Long Street and has since expanded to 9 shops in Johannesburg, Cape Town, and Durban. Like Tiger’s Milk, it now falls underneath restaurant franchising firm Life & Brand, with comparable costings to its portfolio stablemates.
La Parada takes a barely extra subtle strategy than Tiger’s Milk, providing quite a lot of South African-inspired tapas dishes in a few of the nation’s well-heeled neighbourhoods.
Cost to open a La Parada franchise: A brand new La Parada department requires an preliminary franchise payment of R400 000 and prices an estimated R15 000 per sq. metre. Franchisees should additionally pay 8% of month-to-month turnover in the direction of advertising and marketing and administration. La Parada franchisees should have between R4.5 and R7 million obtainable to construct a brand new department.
Rhapsody’s
Rhapsody’s is a foods and drinks franchise that goals to supply a “natural ambience which is lively yet effortless”. They’ve received simply three South African branches, in Centurion, Klerksdorp, and Sunnyside, and three others in neighbouring nations, however they’re seeking to broaden their footprint by way of a franchising mannequin.
The shops are available in two codecs, a standard restaurant and Rhapsody’s lounge, which have comparable per sq. metre setup prices. Restaurants are a lot bigger and require a larger employees complement, growing prices.
Cost to open a Rhapsody’s franchise: A brand new Rhapsody’s restaurant or lounge prices R10 000 to R12 000 per sq. metre. The most measurement of a restaurant is about 650 sq. metres, whereas lounges are smaller at about 450 sq. metres.
Bossa
Bossa is an off-the-cuff restaurant with a easy and numerous drinks menu that focuses on serving to folks “unwind from a hard day at the office”. The franchise is now 23 years outdated and kinds itself as a spot for the entire household.
There are 17 shops within the group, targeted primarily across the Western Cape however with branches in Gauteng, Freestate, and Mpumalanga. They’re searching for new franchisees to run shops in all 9 provinces.
Cost to open a Bossa franchise: Bossa fees a franchise payment of R175 000, excluding VAT. Depending on the complexity of the construct, a brand new retailer prices roughly R6 million. Bossa fees 7% of web turnover for franchise and advertising and marketing.
News Cafe
News Cafe is a longtime South African bar franchise serving meals all through the day. The model is owned by Fournews, which counts Moyo, Brooklyn Brothers, Senhor Jorge, and Soul Souvlaki in its portfolio. At final rely, there have been 16 News Cafe branches all through South Africa, however its main focus is on Gauteng, with shops in suburbs like Midrand, Rivonia, Rosebank, and Sandton.
Cost to open a News Cafe franchise: News Cafe fees roughly R5.95 million in arrange prices for a brand new franchise. Franchisees should additionally pay month-to-month charges totalling 9% of turnover for royalties and advertising and marketing.
Cubaña
Cubaña considers itself a social cafe. They serve numerous Cuban-inspired dishes, together with breakfasts, however focus totally on after-dark actions with cocktails and alcoholic drinks.
The first department was established in 2001, and there are actually 11 shops in its portfolio strategically situated all through South Africa.
Cost to open a Cubaña franchise: Cubaña doesn’t publish franchise charges on its web site and didn’t reply to requests for info previous to publication. However, historic prices place a brand new Cubaña within the area of R10 million, with ongoing advertising and marketing and administration charges at 8% of turnover.
