Fast Food Industry In South Africa In Danger Of Failing

Just when you think established fast food brands are here to stay, news of significant decline in earnings of major fast food chains in South Africa comes as a surprise. According to Leonardo Gonzalez Dellan, a restaurateur and entrepreneur, this is something that should also be monitored in Latin America because the tastes of the consumers are changing in terms of fast food menu options.

For the past ten years, investors who are looking to franchise businesses would turn to fast food because of the quick and huge return. In the country, the average cost of a franchise is between R500,000 and R6 million. This industry is also considered to be the king in terms of franchise.

Last year, the data from the franchising department showed that there are a total of 854 franchisors while there are more than 40,000 franchisees. There are 343,000 job opportunities created because of these franchises and it generated sales amounting to R587 billion. This is responsible for 13.3 per cent of the total GDP of the country. In 2014, it only covers 9.7 per cent of the GDP.

There is trouble in paradise as new report coming from the Franchising Association of South Africa or FASA revealed that income generated from takeaway stores and fast food outlets have considerably declines in the first six months of 2018. This has not happened for so many years already.

This put a lot of pressure on the fast food industry according to FASA and the only saving grace at the moment is the appearance of the online delivery services where it is possible for customers to order food without having to leave their homes, even in shops that do not offer delivery.

According to FASA, the advancement in technology will be the main reason why the fast food industry will continue to thrive for many years. Particularly in South Africa, it is important for fast food chains to have an orderly system that makes it possible for consumers to order online and have their orders delivered to them for convenience. Leonardo Gonzalez Dellan added that the same impact has been provided by technology to restaurants as food delivery service is becoming a staple anywhere else in the world.