South African fast-food franchises operating under American brands are set to face major financial strain following the implementation of new 30% US tariffs. A move triggered by President Donald Trump’s administration as part of its evolving global trade strategy.
While industries like vehicle manufacturing and agriculture have already braced for impact, the fast food sector with global giants like McDonald’s, Burger King, and Starbucks is becoming an unexpected casualty. Despite sourcing many ingredients locally, these franchises import key branded items to maintain consistency and quality across international markets. These imported items, now subject to steep duties, may drive up operational costs significantly.
“US-based franchises operating in South Africa may struggle to keep pricing competitive,” said a Nedbank Retail Services spokesperson. “This may force franchise owners to either absorb the cost or compromise brand uniformity by sourcing locally.”
Franchises like McDonald’s, which entered South Africa through President Cyril Ramaphosa’s Shanduka Group post-apartheid, became synonymous with urban growth and modern convenience. However, the tariff shock now threatens to stall the sector’s momentum.
The weakening rand only exacerbates the issue. Franchise royalties paid in US dollars are now more expensive, and cost pressures may force brands to scale back expansion plans, limit menu offerings, or increase prices.
Local Brands Assured to Capitalise
As American franchises tighten belts, homegrown South African brands such as Nando’s, Chicken Licken, Spur, Steers, and Wimpy are positioned to grab more market share. These brands, deeply rooted in local culture and sourcing practices, are better insulated from global trade disruptions.
Nedbank notes that some local franchises are already revising long-term plans and product strategies to take advantage of the gap left by their US counterparts.
“South African businesses are known for their resilience,” said Nedbank Retail Services. “This moment could be a turning point where proudly South African brands redefine the local fast food landscape.”
With tariffs set to take effect on Thursday, 7 August 2025, the real challenge lies ahead: can US-linked SA franchises adapt quickly enough to survive and can local brands seize the moment?
