Franchising is a popular way for entrepreneurs in South Africa to enter the food and hospitality industry. Among the many well-known brands, Nando’s stands out as one of the most successful and recognizable names, both locally and internationally. With its flame-grilled chicken and unique peri-peri recipes, the brand has built a loyal customer base. Many aspiring business owners are curious about what it takes to start a Nando’s franchise and, more importantly, how much it costs to make such an investment.
Initial Costs
Opening a Nando’s franchise requires a significant upfront financial commitment. The initial franchise fee is one of the first expenses. This fee gives new franchisees the right to operate under Nando’s name, as well as access to its training programs, operational systems, and brand reputation. The fee itself is only one part of the equation, however, as the setup of a fully operational restaurant is much more costly.
The setup costs include expenses such as securing premises, designing and fitting out the restaurant, purchasing kitchen equipment, furniture, and signage. Because Nando’s restaurants are typically located in high-traffic areas like shopping malls and busy streets, rental deposits and building expenses can be substantial. In most cases, the total upfront investment to open a Nando’s restaurant ranges from R5.25 million to R7.05 million or more, depending on location, size, and local construction costs.
Ongoing Fees
Once the restaurant is up and running, franchisees are responsible for ongoing payments to the franchisor. These include royalty fees that are calculated as a percentage of monthly turnover. These royalties cover continued support from the franchisor, including training, operational advice, and access to the brand’s supply chain.
Another ongoing expense is the marketing contribution. Nando’s invests heavily in national and regional advertising campaigns, and every franchise contributes a percentage of their turnover to help fund these initiatives. This ensures that the brand maintains its strong presence in the market and continues to attract loyal customers.
Franchisees also need to budget for operational expenses such as staff salaries, utility bills, and the costs of purchasing stock and ingredients through approved suppliers. These ongoing costs are critical to keeping the restaurant functioning smoothly and in line with the brand’s standards.
Working Capital
Beyond the initial and ongoing fees, one of the most important aspects of opening a Nando’s franchise is having enough working capital. Restaurants often take time to build a steady customer base, even with a strong brand name behind them. Having sufficient funds to cover salaries, rent, and operating expenses during the first several months is essential. The amount of working capital needed will depend on the location and size of the restaurant, but it can easily add another significant amount to the overall investment.
Additional Considerations
There are also other factors that can influence the cost of starting a Nando’s franchise. Each restaurant must meet strict brand guidelines in terms of design and customer experience, which means there is limited flexibility when it comes to reducing setup costs. In addition, prime locations can come with higher rentals, which add to the financial demands. Insurance, licenses, and compliance with health and safety regulations also contribute to the total expenses.
Because the cost of opening a Nando’s is so high, potential franchisees need to demonstrate not only financial capacity but also business management skills. The company looks for partners who can maintain its reputation for quality food and excellent customer service.
Conclusion
Starting a Nando’s franchise in South Africa is a major financial commitment that requires careful planning and significant investment. The total cost typically falls in the multi-million rand range, with initial expenses for the franchise fee and restaurant setup, followed by ongoing royalties, marketing contributions, and operational costs. On top of this, franchisees must ensure they have enough working capital to sustain the business in its early months. While the cost may be high, the reward of joining one of South Africa’s most successful and beloved food brands can be worthwhile for entrepreneurs who are prepared to commit both financially and operationally.
