Entering the fast food industry via franchising is often seen as an attractive option for entrepreneurs. A well-known brand already established in local markets, proven operational systems, and customer recognition can significantly reduce risk compared to starting a completely new business. In South Africa, Chicken Licken is one such major brand. Known for its fried chicken, strong branding and extensive footprint, the franchise has been drawing interest from investors who want to ride the wave of fast food demand. However, such an opportunity requires a substantial financial commitment. Understanding the full costs — not just the headline numbers — is essential before making the leap.
The Brand and Market Position
Chicken Licken was founded in Johannesburg in 1981. Over time it has grown into one of South Africa’s leading fried chicken and quick-service restaurant franchises. Its offerings combine fried chicken, hot wings, side dishes, and sauces, with a marketing style that has resonated well locally. The brand remains competitive in a market crowded with both global chains and local fast food players. As with any strong franchise, Chicken Licken’s success depends not only on its product but on quality control, location, supply chains and customer service. For potential franchisees, this means that securing a good site, adhering to brand standards, and being involved in daily operations are often part of the requirement.
Upfront Investment Costs
To open a Chicken Licken standard store in South Africa, the estimated investment is from around R4,800,000. For a “Fly-Thru” drive-through format, the cost rises, with a minimum of about R6,800,000 depending on size, location, landlord contributions and fit-out. These figures cover the full cost of getting a restaurant ready to open, including site build or renovation, equipment, décor, signage, initial stock, legal and licensing fees. The upfront franchise fee is approximately R180,000, which gives the right to operate under the Chicken Licken brand and access its operational systems and initial support.
Ongoing Fees and Financial Responsibilities
Once the store is open, there are continuing costs to factor in. Chicken Licken charges a royalty fee of about 6% of turnover. Alongside that is an advertising or marketing contribution of another 6%, meaning total ongoing fees amount to roughly 12% of turnover. Beyond these fees, the business holder must cover recurrent expenses like staff salaries, utilities, rent or lease, maintenance of equipment, insurance, and restocking costs. A key financial requirement is that Chicken Licken expects a portion of the investment to come from unencumbered or liquid funds. Roughly 50% of the capital required must be contributed by the franchisee up front, without relying entirely on financing or loans.
Other Important Considerations
Selecting the right location is critical. A store in a busy urban area or inside a shopping mall will cost more for rent or lease, but potentially generate much higher revenues. Sites in smaller towns or suburbs may cost less but also attract lower volumes of walk-in traffic. Fit-out standards, local building codes, refrigeration and kitchen equipment quality, and signage specifications all affect upfront costs. Another key factor is management capability. Chicken Licken expects franchisees to have business acumen and to be hands-on. Training is provided, but the success of the outlet will depend largely on how well the franchisee manages staff, controls costs, and maintains service quality.
Financial Projections and Return Potential
Given the level of investment, the return on investment will depend heavily on sales volume, location, operational efficiency and cost control. A high-traffic area can yield revenues that allow faster payback of the investment, while a lower-traffic area may result in a longer break-even period. Profit margins after all expenses including royalties and fees can be reasonable, but one should account for 12% of turnover going out in royalties and marketing, plus high fixed costs. For many franchisees, recovery of the initial capital may take several years. Because Chicken Licken is a strong brand, with established supply chains and marketing reach, these factors help mitigate risk, but they do not eliminate it.
Conclusion
Starting a Chicken Licken franchise in South Africa is a significant financial commitment. The cost of a standard store begins at about R4,800,000, while drive-through models start around R6,800,000, plus an upfront franchise fee of roughly R180,000. Ongoing fees take about 12% of turnover in royalties and marketing. For those who have the required capital, experience, and a prime site, Chicken Licken offers a proven business model and strong brand presence. But success depends on careful planning, realistic financial forecasting, strong execution and proper site selection. It is not a small undertaking, but for the right investor it can be a rewarding one.
