If you are in Namibia and had set your sight on opening a franchise of McDonald’s, Wimpy, Steers, or RocoMamas restaurant, here’s how much it will cost you.
McDonald’s
If you fit the requirements to be a new franchisee, you’ll need to pay between R4 million and R6 million for the privilege. Franchisees must have 35% of this in unencumbered, non-borrowed cash.
McDonald’s also requires that franchisees be “geographically flexible”, in that they cannot guarantee applicants will be able to establish a restaurant in a preferred location. Still, they promise to work alongside the franchisee to find locations most likely to succeed.
RocoMamas
Buying into this burger franchise success story requires a substantial amount of cash, though. According to the company website, you’ll need 60% – up from 50% last year – of the total setup cost of R4.96 million. This is an increase of about R300,000 from 2019. Without this R2.76 million in cash they won’t entertain your application – and the restaurant has previously recommend starting off with a working capital of R120,000.
One benefit of this large upfront payment is slightly lower monthly management fees – as part of the franchise agreement, you’ll also need to pay monthly royalties totalling 7% that covers management services (5%) and marketing (2%).
Steers
The joining fee for a standard Steers is R67,840, excluding VAT. You’ll then need to pay 5% of the overall build cost of the new restaurant, and R43,500 in design fees.
The relatively new drive-through Steers operations are more expensive. The joining fee for these is R73,140, excluding VAT. You’ll also need to pay the standard 5% project fee, but design fees are nearly double – at R85,000.
Additional set up fees for store fitting and kitchen equipment will set you back more – the company estimates that the total initial investment for a standard Steers will be approximately R 1,753,487, excluding VAT, while the drive through is R3,107,258. Working capital and stock cost approximately R480,000.
Franchisees are also required to pay 11 percent of their monthly revenue to the holding company, which is split between royalties and marketing.
Wimpy
New franchisees in 2020 will need to put down R213,500, excluding VAT, in joining and development fees. The cost of kitting out a new Wimpy branch is significantly more – depending on the type of branch you want to open, you can expect to pay between R2.6 million and R3.4 million.- businessinsider
