Mr Freddy Makgato, CEO of the Franchise Association of South Africa

Mr. Makgato, South Africa’s franchise industry continues to lead the African continent with a 15% contribution to national GDP and nearly 500,000 direct jobs. As we approach the FASA 2026 conference, we would like to explore with you the perspectives of this flagship industry and its driving role for the entire continent.

THE EXCEPTIONAL PERFORMANCE OF SOUTH AFRICAN FRANCHISING

Continental Record – With a 15% GDP contribution and R999 billion in revenue in 2023, South Africa positions itself as the undisputed leader of franchising in Africa. In your view, what factors explain this historical dominance?

South Africa’s position as the undisputed leader of franchising in Africa is not a result of chance, but rather a testament to the resilience, adaptability, and high standards of our business community. The figures you mention—a 15% contribution to national GDP and an annual turnover reaching R999 billion in 2023—underscore the sector’s vital role as an economic engine.

In my view, several key factors explain this historical dominance:

• Proven Resilience in the Face of Adversity: Our sector has shown remarkable tenacity, especially through the challenges of the past few years. Despite the COVID-19 pandemic, civil unrest in 2021, and persistent energy constraints (load-shedding), the industry achieved a 36% turnover increase from 2019 to 2023.
• Established Professional Standards: South Africa was one of the first countries globally to adopt a formal Code of Ethics and Business Practices for franchising. This commitment to ethical conduct, championed by FASA for over 45 years, has built the trust necessary for sustainable growth.
• A Mature Financial and Regulatory Ecosystem: We benefit from a world-class financial sector and a robust, independent legal system that rigorously enforces business and intellectual property laws. This stability provides a secure environment for both local and international brands to thrive.
• A Solution to Economic Challenges: In a country with high unemployment, franchising offers a « systemised success » model that lowers the risk of failure compared to independent startups. It provides a structured pathway for entrepreneurship and skills transfer.
• Home-Grown Innovation: While international brands are present, approximately 90% of South African franchises are home-grown. Our local brands – like Nando’s – have not only dominated locally but have successfully used South Africa as a springboard to expand across the continent and globally.
• Commitment to Transformation: We have seen significant progress in transformation, with ownership by previously disadvantaged individuals increasing from 20% in 2019 to 48% in 2023. This inclusivity ensures the sector remains relevant and integrated into the broader South African economy.

As we look toward our 2026 National Conference & Expo on 19 February our theme  – « Building the South African Economy through Franchising » – reflects our continued commitment to leveraging this model for inclusive growth and national development.

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Remarkable Resilience – Despite post-pandemic challenges, your sector showed 36% growth between 2019 and 2023. How did South African franchising achieve this performance while other sectors struggled to recover?

The remarkable resilience of the South African franchising sector, which saw a 36% growth between 2019 and 2023 despite the post-pandemic climate, is a testament to the fundamental strength of the franchise business model. While other sectors struggled, franchising achieved this performance by leaning into its core advantages:

• « Systemised Success » and Risk Mitigation: At its heart, franchising is about providing a proven « business-in-a-box ». This model offers intensive education, skills development, and ongoing training, which significantly lowers the risk of failure compared to independent startups, especially during volatile economic periods.
• Rapid Adaptation to Operational Challenges: Our franchisors and franchisees demonstrated incredible agility in navigating persistent energy constraints, such as load-shedding, by quickly adopting renewable energy solutions and sustainable operational practices to maintain business continuity.
• A Commitment to Transformation and Inclusivity: The sector’s growth has been fuelled by a deliberate move toward « Inclusive Entrepreneurship ». By targeting women, youth, and SME participation, we have unlocked a new wave of entrepreneurs, with over 70% of employees now coming from previously disadvantaged groups.
• The Power of the Multiplier Effect: Franchising acts as a powerful catalyst for large-scale job creation. For every 14 direct jobs created within the sector, another seven are generated in the broader supply chain. This interconnectedness helped sustain the sector even when individual components of the economy were under pressure.
• Strong Local Roots: With 88% of our systems being homegrown brands, South African franchising is deeply attuned to local market dynamics. This allowed for more responsive innovations in customer experience and supply chain management compared to models more reliant on international fluctuations.
• Collaborative Ecosystem Support: The industry benefits from a robust support network, including financial institutions like Absa and Nedbank, and government agencies like SEDFA and the various SETAs, which provide tailored financial solutions and skills development funding even during downturns.

As we look toward the 2026 National Conference & Expo, themed « Building the South African Economy through Franchising, » we will continue to explore these pillars of resilience to ensure our sector remains the premier engine for inclusive growth in the country.

 

Multi-unit Model – Unlike other African markets, 68,463 franchise units are predominantly operated by multi-unit franchisees. Is this model exportable to other African countries?

The South African multi-unit franchise model is not only exportable but is already serving as the blueprint for regional expansion across the continent.

In South Africa, the fact that a significant portion of our nearly 70,000 franchise units are operated by multi-unit franchisees is a major strength. This shift—where experienced operators manage multiple sites—has become a cornerstone of our market’s stability and is highly applicable to other African countries for several reasons:

• Mitigating Regional Risks: Expanding into new African markets involves navigating diverse regulatory and operational landscapes. The multi-unit model allows for « Area Developers » or « Master Franchisees » who possess the local knowledge and capital to scale a brand quickly while maintaining high standards.
• Operational Efficiency and Economies of Scale: Multi-unit operators can centralise administrative functions, supply chain management, and training across several locations. This reduces overhead costs, making the business more resilient in markets where infrastructure or logistics may be challenging.
• Proven Success as an Export:Approximately 90% of our systems are homegrown, and many of these have successfully used the multi-unit model to expand into countries like Botswana, Namibia, and beyond. They demonstrate that when you have a « systemised success » model, it can be replicated across borders, which several of our members have done extremely successfully.
• A Solution for Capital Constraints: While single-unit ownership is great for micro-entrepreneurship, multi-unit franchising attracts significant investment and professional management, which are often what new markets need to build a robust retail or service ecosystem rapidly.
• Focus of the 2026 Conference: This is a key topic for our upcoming National Conference & Expo (19 February 2026). One of our core themes is « Regional Expansion & Africa Market Access, » where we will specifically explore how to unlock cross-border growth by exporting these successful South African structures.

While we must avoid a « one-size-fits-all » approach and respect local market nuances, the South African multi-unit model provides the professional framework and risk-mitigation strategies necessary for franchising to thrive across the continent.

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

INCLUSIVE ENTREPRENEURSHIP: A MODEL FOR AFRICA

Successful Transformation – The proportion of franchisees from previously disadvantaged groups increased from 20% to 48% in four years. What were the key strategies behind this transformation?

The significant shift in franchisee ownership—from 20% to 48% in just four years—is one of our sector’s proudest achievements. This transformation did not happen in isolation; it was the result of a deliberate, multi-pronged strategy to democratise business ownership in South Africa.

As CEO of FASA, I believe the following strategies were instrumental in driving this change:

• Innovations in Franchise Finance: Access to capital has historically been the greatest barrier for previously disadvantaged individuals. To bridge this gap, we worked closely with financial institutions like Absa, Masisizane Fund and Nedbank to create tailored lending products that recognise the lower risk profile of a proven franchise model.
• Alternative Ownership Models: Many franchisors moved away from the « all-or-nothing » capital requirement. We have seen a rise in joint ventures, co-ownership models, and vendor financing. These allow high-potential, low-capital candidates (particularly women and youth) to buy into full ownership gradually as they prove their operational success.
• The Rise of Micro and Social Franchising: We have championed the expansion of franchising into less capital-intensive sectors. By developing micro-franchise concepts and applying the model to social services in townships and rural areas, we have lowered the entry point for new entrepreneurs. Today, 23% of all franchises operate in townships—a major shift from a decade ago.
• Structured Mentorship and Skills Transfer:Transformation is about more than just ownership; it’s about sustainability. Our « business-in-a-box » model provides intensive on-boarding, continuous management training, and operational support. This structured transfer of « know-how » ensures that first-time owners have the same capacity for success as seasoned business veterans.
• Alignment with National Policy (Broad-Based Black Economic Empowerment – B-BBEE): The industry has proactively aligned itself with national transformation goals. By prioritising previously disadvantaged individuals with local community insights, brands have not only met B-BBEE objectives but have also gained a competitive advantage by better understanding their target markets.
• Public-Private Partnerships: Collaborative efforts with government agencies like SEDFA and various SETAs (Wholesale and Retail, Services) have unlocked discretionary grants and funding for skills development, specifically targeting the incubation of PDI-owned businesses.

Our upcoming 2026 National Conference will focus heavily on « Inclusive Entrepreneurship » to ensure we don’t just reach 48%, but continue to grow this number until our sector truly reflects the vibrant diversity of the South African population.

Gender Equality – With 30% of franchise owners being women, how does FASA specifically encourage female entrepreneurship?

Gender equality is not just a target for us at FASA; it is a fundamental pillar of our growth strategy. While women currently represent 30% of franchise owners in South Africa, we are actively working to increase this figure through several targeted initiatives:

• Dedicated Platforms for Advocacy: A key focus of our upcoming 2026 National Conference is « Inclusive Entrepreneurship, » with a specific emphasis on women’s participation. We are proud to feature panellists like Bea Hackula, President of Africa for Africa.
• Promotion of Gender-Responsive Business Models: We are encouraging the development and adoption of franchise models that are specifically designed to be gender-responsive. This involves identifying sectors and operational structures that better align with the unique needs and strengths of female entrepreneurs.
• Lowering Barriers to Entry through Micro-Franchising: By championing micro-franchising and social-franchising initiatives, particularly in townships and rural areas, we are creating more accessible entry points for women who may have the skills but lack the high capital typically required for traditional models.
• Financial Ecosystem Support: We work closely with our partners, such as Absa and Nedbank, to advocate for tailored financial solutions that recognise and support the potential of female-led franchise businesses.
• Skills Development and Capacity Building: Through our collaborations with the Services SETA and the Wholesale & Retail SETA (W&RSETA), we provide funding for training and learning programmes that empower women with the management and operational skills necessary to run successful franchise systems.
• Structured Mentorship: The « business-in-a-box » nature of franchising is inherently supportive of first-time owners. We ensure that our female franchisees have access to intensive education and ongoing training, providing a safety net of professional « know-how » that mitigates the risks of starting a new business.

Our goal is to ensure that the franchise sector remains a leading driver of economic transformation where women can play a central role in « Building the South African Economy ».

 

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Youth and Townships – 23% of franchises now operate in townships. How does this penetration contribute to economic decentralization and opportunity creation for youth?

The penetration of franchising into townships—now accounting for 23% of all units—is a powerful driver of economic decentralisation and a vital entry point for South African youth. By moving beyond traditional urban hubs, the sector is actively « bringing the economy to the people » rather than forcing people to travel to the economy.

From my perspective as CEO of FASA, this shift contributes to opportunity creation for youth in several specific ways:

• Lowering the Barrier to Entry via Micro-Franchising: We are championing « micro-franchising » models that require significantly less capital than traditional full-service outlets. These models are specifically designed for township entrepreneurs, allowing youth with limited savings to own a business that follows the systems of an established brand.
• Transitioning from Informal to Formal Economy: Townships have massive informal economies worth an estimated R900 billion. Franchising provides a « structured pathway » to formalisation, offering young entrepreneurs the management systems, compliance training, and brand recognition they need to turn a « side-hustle » into a sustainable, scalable business.
• Localised Job Creation and the Multiplier Effect: Franchises in townships create jobs exactly where they are needed most. For every 14 direct jobs created in a local outlet, an additional seven are generated in the broader supply chain. This keeps capital circulating within the community rather than leaking out to major cities.
• Skills Development and « Management-in-a-Box »: High youth unemployment (above 46%) is often exacerbated by a lack of formal business experience. Franchising acts as a « finishing school » for management, offering intensive education and ongoing training that builds the technical and operational skills young people need to lead.
• Decentralisation of Services: By bringing quality goods and services—from education and healthcare to retail—directly into townships, we improve the local quality of life and create niche service-sector opportunities that young South Africans are increasingly interested in, such as hair care, tech-based services, and education.

At our 2026 National Conference, we will specifically host a session titled « Inclusive Entrepreneurship: Women, Youth, and SME Participation » to further explore how we can double this township penetration and ensure that « self-starters » are given the institutional support they need to thrive.

 

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

FASA 2026 CONFERENCE: SETTING THE COURSE FOR THE FUTURE

Strategic Theme – « Building the South African Economy through Franchising »: How does this 2026 edition mark a break from previous conferences?

The 2026 National Conference & Expo, themed « Building the South African Economy through Franchising, » represents a fundamental strategic shift for FASA. While previous editions often focused on « The Road to Recovery » or internal sector resilience, the 2026 edition is designed as a Call to Action for Economic Transformation.

This year marks a break from the past in several critical ways:

• From Internal Resilience to National Catalyst: Past conferences focused on how the sector was « holding its own » against headwinds like the pandemic and load-shedding. In contrast, the 2026 conference repositions franchising as a primary solution to South Africa’s structural economic challenges—aiming to move the sector’s GDP contribution from 15% toward a goal of 18–20% to drive national recovery.
• Beyond Discussion to « Strategic Introspection »: I have stated that this edition must transcend traditional industry talk. It is designed as a moment of « strategic introspection » where we fundamentally rethink the collaboration between business, government, and civil society to unlock the sector’s full potential for the entire country.
• Emphasis on High-Tech and Future Resilience: While we have always discussed innovation, 2026 introduces a much sharper focus on Digital Transformation and AI Integration. We are moving the conversation from basic digital adoption to how artificial intelligence and cybersecurity can specifically strengthen multi-unit systems.
• A « Comprehensive Agenda for Growth »: The 2026 programme is more holistic than previous years, explicitly linking operational excellence with ESG (Environmental, Social, and Governance) compliance. We are acknowledging that for a franchise to be a builder of the economy, it must be sustainable and ethically aligned with global standards.
• Focus on Continental Leadership: The 2026 edition places a new premium on Regional Expansion & Africa Market Access. We are no longer just looking at the South African market in isolation but are positioning our homegrown systems as the blueprint for continental economic development.

Ultimately, the 2026 conference is not just an industry gathering; it is a strategic turning point intended to align the franchise business model with national economic priorities like youth employment and SME empowerment

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Innovation and Technology – AI, digital transformation, and cybersecurity feature on the program. How is South African franchising adapting to the technological revolution? And ‘Why now? Why could Boksburg 2026 be the “Big Bang” of African franchising, just as Davos became the meeting place for the global economy? Will those who miss this event miss the boat of history?

South African franchising is actively adapting to the technological revolution by shifting from basic digital adoption to integrating advanced systems that enhance operational excellence and security. As the sector contributes 15% to the national GDP, the 2026 conference highlights a critical move toward « future-readiness ».

How South African Franchising is Adapting?

The industry is embracing high-tech solutions to navigate a complex business environment and maintain a competitive edge:

• Artificial Intelligence and Digital Innovation: Franchises are exploring AI to revolutionise operations, specifically in areas like hyper-personalised customer experiences, digital marketing consistency across multiple locations, and predictive analytics for business intelligence.
• Supply Chain and Efficiency: Technology is being used for supply chain optimisation and inventory management, allowing local franchises to serve domestic markets effectively while competing globally.
• Digital Security and Cybersecurity: As multi-unit systems become more integrated, there is a heightened focus on cybersecurity to protect physical and digital assets, as well as brand integrity.
• Sustainability through Tech: To mitigate the challenges of load-shedding, the sector is adopting renewable energy technologies, such as solar power, to ensure sustainable and cost-effective operations.

Why the FASA Conference and Expo 2026 is the « Big Bang » of African Franchising?

• A Convergence of Power: This event brings together a rare assembly of government officials (including the Minister of Trade, Industry and Competition), financial giants like Absa and Nedbank, and Pan-African entrepreneurship leaders to align on a single goal: building the economy.
• Strategic Introspection: Unlike previous years, this conference is a moment of « strategic introspection » intended to fundamentally rethink how franchising can serve as the country’s—and the continent’s—premier engine for inclusive growth.
• Blueprint for Africa: With 88% of our systems being homegrown, South Africa is using this platform to showcase replicable models that can be exported across African markets, creating a « sovereign » economic ecosystem.

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Missing the « Boat of History »

Those who miss this event risk missing the definitive shift toward a formalised, tech-driven, and inclusive African franchise landscape. The 2026 conference is designed to unlock the « next wave » of entrepreneurship; failing to participate means missing out on the critical policy frameworks, financial access, and technological insights that will define the next decade of growth. This is the moment where the sector moves from being a business model to a national economic strategy—to be absent is to be left behind as the « boat » of African economic sovereignty sets sail.

Sustainability and ESG – With the adoption of renewable energy to address load-shedding, is franchising becoming a model of energy resilience for Africa?

I believe that South African franchising is not just adapting to energy challenges; it is actively pioneering a blueprint for energy resilience that can be replicated across the continent.

Our sector has reached a turning point where sustainability and ESG (Environmental, Social, and Governance) compliance are no longer optional « add-ons » but are central to operational excellence. Here is how franchising is becoming a model of resilience:

• Proactive Mitigation of Load-Shedding: To combat the persistent challenges of energy constraints, franchises are rapidly adopting renewable energy solutions, particularly solar power. This transition ensures business continuity in a way that independent small businesses often struggle to achieve alone.
• The Power of Systemic Adoption:When a major franchise brand adopts a green energy strategy, it isn’t just one store changing—it is potentially hundreds of units across the country implementing the same sustainable standards. This « multiplier effect » accelerates the transition to a greener economy.
• ESG as a Competitive Advantage: We are seeing a shift where ESG compliance is becoming a key differentiator for investment. Franchisors are increasingly tracking sustainability metrics to enhance stakeholder accountability and brand integrity.
• Cost Reduction through Sustainability: Beyond environmental benefits, the move toward renewable energy is a strategic cost-reduction measure. By lowering long-term energy costs, franchises become more resilient against the rising price of traditional utilities.
• Education and Knowledge Transfer: Through our « business-in-a-box » model, we provide franchisees with the technical « know-how » and professional frameworks needed to implement complex energy systems. This lowers the barrier for individual entrepreneurs to adopt sustainable technology.

At our 2026 National Conference, a dedicated session titled « Building Resilient Franchise Systems: Technology, Security, Sustainability & Growth » will feature experts to discuss how we can further integrate solar adoption into our operational DNA.

Franchising is proving that through collective action and proven systems, we can build an energy-secure future for businesses across Africa.

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

TOWARD A PAN-AFRICAN VISION

Continental Leadership – As the African leader, what responsibility does FASA feel to support franchise development in other African countries?

As the oldest and most established franchise body on the continent, FASA views its role as a « continental torchbearer » with a profound responsibility to foster ethical business practices far beyond South Africa’s borders. We recognise that the future of the African economy is inextricably linked to our collective ability to replicate success.

Our commitment to supporting franchise development across Africa is reflected in three strategic pillars:

• Pioneering Pan-African Collaboration: FASA spearheaded the formation of the Pan-African Franchise Federation (PAFF) to bring together franchise associations from across the continent. Our goal is to create a unified voice that promotes franchising as a primary vehicle for poverty alleviation and wealth creation in Africa.
• Advisory and Ethical Stewardship: We play a crucial advisory role in helping other African nations—including Egypt, Ethiopia, Mauritius, Tanzania, and Nigeria—set up their own ethical franchising frameworks. By sharing our Code of Ethics, which was one of the first in the world, we help ensure that as franchising grows in Africa, it does so with integrity and consumer protection at its core.
• Facilitating Market Access: A core focus of our 2026 National Conference and Expo is « Regional Expansion & Africa Market Access ». We are positioning South Africa as the « springboard » for international brands entering Africa and for our own homegrown brands to expand northward. We are working to connect local franchisors with regional opportunities, helping them navigate the diverse regulatory landscapes of our neighbouring countries.

We believe that franchising is the most effective « knowledge transfer » mechanism available today. By supporting the development of sustainable, systemised businesses across the continent, we aren’t just expanding brands—we are helping to build a more resilient and self-sufficient African economy. Those who join us at our Conference and Expo on 19n February 2026 will be at the forefront of this historic shift toward a truly Pan-African franchise ecosystem.

 

Regional Partnerships – Beyond South Africa, what are your projects for collaboration with other African franchise associations to create a harmonized continental ecosystem?

I view our role at FASA as a « continental torchbearer » with a profound responsibility to foster ethical business practices and economic growth far beyond our borders. Our collaborative projects are aimed at creating a harmonised African franchise ecosystem through three strategic pillars:

• The Pan-African Franchise Federation (PAFF):FASA spearheaded the formation of the PAFF to bring together franchise associations from across the continent—including Egypt, Ethiopia, Mauritius, Tanzania, and Nigeria. This body serves as a unified platform to promote the franchise business format as a primary vehicle for poverty alleviation and wealth creation throughout Africa.
• Ethical Stewardship and Regulatory Advisory: We play a crucial advisory role in helping other African nations establish their own ethical franchising frameworks. By sharing our Code of Ethics—one of the first in the world to be government-gazetted—we provide a blueprint for a compliant and professional industry that protects both franchisors and consumers.
• Regional Expansion and Market Access: A core focus of our 2026 National Conference and Expo is regional expansion & Africa market access ». We are working to facilitate cross-border growth for local homegrown brands (which make up 88% of our systems) by helping them navigate diverse regulatory landscapes and connecting them with regional investment partners.
• Skills and Knowledge Transfer: Through seminars held in association with partners, our leaders have been active in promoting the principles of franchising across the continent. We view franchising as the ultimate « knowledge transfer » mechanism that can bridge the skills gap for Africa’s growing middle class.

By joining us at our Conference and Expo on 19 February 2026, stakeholders will be part of a « strategic introspection » intended to move franchising from a South African success story to a foundational cornerstone of continental prosperity. Those who attend will be at the forefront of building a truly integrated and innovative African economy.

Register for the FASA Conference now at https://www.online-rsvp.co.za/FASAConference/

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

AfCFTA and Franchising – How could the African Continental Free Trade Agreement transform the franchising landscape at continental scale?

The African Continental Free Trade Agreement (AfCFTA) is a historic game-changer that will fundamentally shift franchising from a series of isolated national markets into a single, integrated African economic powerhouse.

As the leader of the continent’s most mature franchise sector, I see AfCFTA transforming the landscape in several critical ways:

• Creating a Unified Market of 1.3 Billion People: By eliminating tariffs on 90% of goods and reducing non-tariff barriers, AfCFTA allows South African homegrown brands—which make up 88% of our systems—to scale with unprecedented speed. This turns « cross-border expansion » from a complex regulatory hurdle into a streamlined growth strategy.
• Harmonising Standards and Intellectual Property: One of the greatest challenges in African franchising has been the lack of consistent legal protections for brands. AfCFTA’s protocols on Intellectual Property and Investment provide a stable framework that protects the « secret sauce » of a franchise, encouraging more entrepreneurs to invest in the model.
• Streamlining Supply Chains: Franchising relies on the consistent delivery of high-quality inputs (food, products, or technology). AfCFTA will allow franchisors to source materials across borders without prohibitive duties, making the « business-in-a-box » model more cost-effective and resilient against global supply chain shocks.
• Facilitating the Movement of « Know-How »: Franchising is essentially the export of professional skills and management systems. The agreement’s focus on the free movement of business people will make it easier for our master franchisees to provide the hands-on training and mentorship necessary to ensure operational excellence in new markets.
• Boosting Intra-African Investment: With the support of institutions like Afreximbank, AfCFTA will unlock new financial mechanisms specifically for franchising, recognising it as the most effective tool for SME development and formalising the continent’s massive informal economy.

At our 2026 National Conference & Expo, we have a dedicated session on « Regional Expansion & Africa Market Access ». We will explore how AfCFTA can turn Boksburg 2026 into the starting point for a new era of « Sovereign African Brands » that dominate the continent and eventually the global stage.

Register for the FASA Conference now at https://www.online-rsvp.co.za/FASAConference/

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Upcoming Challenges – What are the three main challenges that the African franchise industry will need to address in the next five years?

In the next five years, the African franchise industry faces three primary challenges that will shape its ability to drive sustainable growth:

• Access to Affordable Capital: A persistent « funding gap » remains the most significant barrier. Potential franchisees often struggle to secure appropriately priced capital, hindered by high interest rates and the high equity contributions typically required by established brands.
• Infrastructure and Energy Constraints: Unreliable electricity (notably load-shedding in South Africa) and poor logistics infrastructure increase operational costs and threaten business continuity. Addressing these through renewable energy adoption and resilient supply chain management is critical for the sector’s long-term stability.
• Regulatory Complexity and Standardisation: Navigating inconsistent legal frameworks and a « deficit of trust » between trading partners on the continent hampers cross-border growth. To fully leverage agreements like the AfCFTA, the industry must harmonise standards, streamline red tape, and strengthen the enforcement of intellectual property rights.

FASA CEO Freddy Makgato interview SA franchise strategies inclusion tech AfCFTA

Message to Young African Entrepreneurs – What message would you like to convey to young Africans considering franchising as an entrepreneurial pathway?

My message to young African entrepreneurs is simple: Franchising is the ultimate « shortcut » to business mastery. While the dream of starting something from scratch is noble, the high failure rate of independent startups is a major hurdle for our continent’s youth. Franchising offers you a « systemised success » model—a proven business-in-a-box that allows you to be in business for yourself, but not by yourself.

Key reasons to consider this pathway:

• Skills over Capital: You don’t need a decades-long track record to start; the franchisor provides the training, operational systems, and brand power that would otherwise take years to build.
• Mitigated Risk: You are adopting a model that has already navigated market challenges, energy constraints, and supply chain hurdles.
• Scalability: As we see in South Africa, young entrepreneurs are increasingly moving from single-unit to multi-unit ownership, allowing them to create significant local employment.

The future of the African economy under AfCFTA will be built on professional, scalable brands. If you are a self-starter who values structure and proven results, franchising is your vehicle to move from the informal economy to becoming a major player in the formal sector.

I invite you to join us at the 2026 National Conference & Expo on 19 February. We have dedicated sessions on Inclusive Entrepreneurship specifically designed to show you how to unlock funding and find the right brand to kickstart your journey. Don’t just watch history happen—build it.

Register for the FASA Conference now at https://www.online-rsvp.co.za/FASAConference/

 

Vision 2030 – Where do you see African franchising by 2030, and what role will South Africa play in this evolution?

By 2030, I envision African franchising evolving from a collection of emerging markets into a fully integrated, tech-driven economic powerhouse. Driven by the AfCFTA, the continent will see the rise of « Sovereign African Brands » that dominate local markets and compete globally.

In this evolution, South Africa will play three pivotal roles:

• The Continental Hub: As the most mature market, South Africa will serve as the primary gateway for international investment and the « springboard » for brands expanding into the rest of Africa.
• The Ethical Standard-Setter: Through FASA and the Pan-African Franchise Federation (PAFF), we will lead the harmonisation of ethical codes and professional standards, ensuring sustainable and transparent growth across all member states.
• The Innovation Lab: South Africa will continue to pioneer « inclusive entrepreneurship » models—such as micro-franchising and solar-integrated operations—providing the blueprint for solving youth unemployment and energy challenges across the continent.

Our goal is to move the franchise sector’s contribution beyond 15% of GDP, making it the definitive engine for a self-sufficient and prosperous Africa. We invite you to witness the start of this journey at the 2026 National Conference & Expo.

Register for the FASA Conference now at https://www.online-rsvp.co.za/FASAConference/

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