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Market Potential for Franchising in Africa

BY Kendal Tyre
May 26, 2011

While some African countries do not yet have the economic and legal infrastructures in place sufficient to encourage substantial U.S. franchise growth, several African countries are demonstrating that they have the market size, growth, opportunities, and developing laws to support franchise development that would be attractive to forward-thinking, established franchisors and entrepreneurs looking for new investments. A short update follows.

Legal Infrastructure

A common roadblock to an increased U.S.-based franchisor presence in Africa is the perceived and, in many circumstances, real lack of a legal infrastructure to support franchising in many African countries. Recently, African countries have addressed this concern by drafting and enacting legislation specific to franchising. South Africa and Tunisia have enacted franchise legislation that includes mandated pre-sale disclosure for franchise operations. Tunisia recently passed legislation that dictates the terms that must be contained in franchise agreements. Nigeria has established laws to require registration of agreements containing the exchange of intellectual property. Soon, other African countries will follow suit.

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