Franchising is set to become one of Africa’s strongest economic growth engines as businesses increasingly look beyond domestic markets, according to Standard Bank, which says the proven business model is well positioned to capitalise on rising consumer demand, digital transformation and regional trade integration.
The banking group believes franchising is creating new opportunities for entrepreneurs by offering established business models that reduce startup risks while accelerating business expansion, employment generation and the formalisation of informal economies.
Speaking on the sector’s growing impact, Andre Beck, Head of Franchising for Business and Commercial Banking at Standard Bank South Africa, said franchising has already become a significant contributor to South Africa’s economy. “Franchising is playing a critical role in formalising informal economies, enabling job creation, and unlocking access to capital for entrepreneurs.”
According to Beck, the franchise sector contributes approximately 15% of South Africa’s Gross Domestic Product (GDP), demonstrating the model’s economic significance. He added that the next opportunity lies in replicating this success across the African continent by improving access to finance and creating a more supportive environment for entrepreneurs.
Consumer Trends Creating New Franchise Opportunities
Standard Bank noted that evolving consumer behaviour is reshaping opportunities across multiple franchise sectors, particularly retail and foodservice.
Retail businesses are increasingly benefiting from consumers’ demand for convenience and affordability, with online shopping, click-and-collect services and home delivery continuing to gain momentum. At the same time, retailers are adopting artificial intelligence (AI) and machine learning to improve operational efficiency, personalise customer experiences and optimise inventory management.
Consumer preferences are also shifting towards healthier food choices, locally sourced products and environmentally sustainable packaging, creating opportunities for franchise brands capable of adapting to these trends.
Within the foodservice industry, quick-service restaurants (QSRs), takeaway concepts and delivery-focused business models continue to outperform traditional dine-in formats as consumers prioritise speed, convenience and value. Social media platforms and online customer reviews are also becoming increasingly influential in purchasing decisions, further encouraging franchise operators to invest in digital engagement.
Highlighting the advantages of franchising for aspiring business owners, Beck said: “Franchising offers a proven and structured pathway for entrepreneurs to enter the formal economy with reduced risk. Across Africa, we are seeing how well-supported franchise models can accelerate job creation, skills development and sustainable business growth.”
Cross-Border Expansion to Define Africa’s Next Growth Chapter
Standard Bank believes the strengthening of intra-African trade is opening new avenues for franchise expansion beyond national borders.
The bank cited research from McKinsey & Company, which projects that Africa’s consumer class will reach approximately 1.1 billion people by 2030, supported by one of the world’s fastest rates of urbanisation. This expanding consumer base is expected to fuel long-term demand across sectors including retail, foodservice, education, healthcare and business services.
Joret Olivier, Executive Head of Enterprise Banking for Africa Regions and Offshore at Standard Bank, said franchising is particularly suited to regional expansion because successful business concepts can be replicated and adapted across diverse African markets. “Africa’s economic future will be driven by businesses that can grow across borders. Franchising is uniquely positioned to achieve this, given its replicable and adaptable model.”
Challenges Remain Despite Positive Outlook
While optimistic about the sector’s future, Standard Bank acknowledged that franchise businesses continue to face several structural challenges.
These include rising labour and operating costs, supply chain disruptions, infrastructure limitations, growing competition and rapidly changing consumer expectations around affordability, sustainability and digital commerce.
In many African markets, inconsistent regulatory frameworks, limited access to specialised franchise financing and shortages of skilled talent continue to restrict growth.
Nevertheless, the bank believes stronger collaboration between governments, financial institutions and the private sector can help address these barriers and unlock the next stage of franchise-led economic development across Africa.
Africa’s franchise industry has been steadily expanding beyond traditional markets such as South Africa, with growing activity in countries including Kenya, Nigeria, Ghana, Egypt and Morocco. The implementation of the African Continental Free Trade Area (AfCFTA) is expected to further accelerate cross-border franchise expansion by improving market access and reducing trade barriers. Industry experts increasingly view franchising as a strategic tool for creating employment, supporting small business development and driving sustainable economic growth across the continent.
