Top 5 Restaurant Franchise Projections for 2024

What is a franchise business? In short, a franchise business is a business relationship between the brand owner (franchisor) and the party using that brand (franchisee) by paying a certain fee.

Franchisees can choose and operate a franchise business that already has many loyal customers and a well-known brand, making it easier to focus on developing their business.

Franchise businesses – including restaurant franchises – still have great potential for growth in Indonesia. According to data from the Ministry of Trade of the Republic of Indonesia, from 2012 to 2022, there was a total increase of 231 franchises.

Of these, 107 were local franchises, while the remaining 124 were foreign franchises. In total, there are more than 1100 franchises operating in Indonesia, with one of the sectors contributing the largest percentage being franchises in the F&B sector.

Restaurant franchises can be an option for culinary entrepreneurs who want to start a business but don't want to start from scratch. However, it's important to note that franchise businesses require significant capital and have their own risks, so make sure you have enough capital and knowledge & strategies for partnership business development.

According to the International Trade Administration, full-service restaurants still account for 83% of total sales in the F&B sector, followed by fast food at 6%, cafes & bars at 5.5%, street food at 4.4%, and self-service cafes at 1%.

So, what are some popular and growing restaurant franchises in 2023?

1. Kopi Kenangan & Janji Jiwa

Source: kopikenangan.com

Based on data from Snapcart, 79% of Indonesians are coffee consumers, with the majority consuming coffee at least once a day. However, most Indonesians (63%) choose to buy coffee at coffee shops/cafes on weekdays.

This indicates a significant opportunity to open a franchise restaurant in the form of a coffee shop or cafe.

In 2024, Statista predicts a 4.9% increase in the coffee market volume. The coffee market in Indonesia continues to grow with increasing demand for specialty coffee focusing on sustainable farming practices.

Kopi Kenangan is one of Indonesia's pride coffee franchises that continues to grow and has begun to enter the global coffee market. In October 2022, Kopi Kenangan opened its first international outlet in Malaysia. According to data from the Indonesia Business Report in 2023, Kopi Kenangan already has 850 outlets spread across 64 cities in Indonesia.

In addition to Kopi Kenangan, Janji Jiwa coffee holds a promising position, according to Snapcart, as the most consumed ready-to-drink coffee brand in cafes by the Indonesian public, with a percentage of 50%, followed by Starbucks at 50%.

2. Mixue

Source: wikipedia.com

Mixue Indonesia, under the license of PT Zhisheng Pacific Trading, adopts the concept of ice cream and tea at affordable prices, which has quickly captured the hearts of Indonesians.

Its rapid outlet growth over a span of 2 years proves Mixue's position as a competitor in the dessert sector that local restaurant franchise players should be aware of.

Mixue's continuous menu innovation has propelled its growth to over 1000 outlets in Indonesia within just 2 years. Mixue has successfully utilized online platforms to market its products and reach a wider customer base.

3. Sabana Fried Chicken

Source: sabanaku.com

Fried chicken remains one of the favorite foods of Indonesians in 2023. Fried chicken restaurants or outlets can easily be found, ranging from street food stalls to restaurants in large malls.

One local fried chicken franchise that you can consider to generate profits and continue to grow is Sabana Fried Chicken. Founded in 2006 under PT Sumber Berkah Niaga, it already has more than 2000 outlets across Indonesia.

Amidst the tough competition in the fried chicken franchise market, Sabana maintains its position by ensuring the quality of its products. Sabana collaborates directly with farmers to ensure the freshness of raw materials, which in turn affects the consistency of the taste of its fried chicken products.

4. Subway

Source: kumparan.com

According to Mordor Intelligence, international restaurant franchises like Subway are the fastest-growing segment based on outlet type.

The predicted Compound Annual Growth Rate (CAGR) for this segment for the years 2023 is 13.76%. This significant growth rate is predicted to come from Subway's successful marketing through social media.

Subway, which entered Indonesia in 2021, has grown rapidly with the addition of branches in many areas.

By the end of Q1 in 2023, PT Map Boga Adiperkasa Tbk, which oversees Subway, opened its 63rd outlet in Bali. Subway continues to innovate to provide a variety of healthy menu options and expand its outlet reach to widen its marketing reach.

The American fast-food restaurant specializing in sandwiches has experienced a global sales increase of 12.1% year on year (yoy).

5. RAFI

Source: babarafi.com

The RAFI franchise covers the brands Kebab Turki Baba Rafi, Container Kebab, Kebab Kitchen, Smokey Kebab, and Baba Rafi Cafe. According to Bisnis.com, there were already 88 new RAFI franchise outlets added from December 2022 to early November 2023.

Based on financial reports released by the Indonesia Stock Exchange (IDX) in August 2023, the revenue of RAFI franchises (PT Sari Kreasi Boga Tbk) skyrocketed by 356.91% in the first half of 2023. Furthermore, based on statements from the CEO of RAFI, the growth forecast for the Baba Rafi brand in 2024 could reach 5-10% due to political factors.

Next year, the sales projection for Kebab Baba Rafi could see an increase in demand for logistics needs during the elections. The positive profile of RAFI franchises and the wide-open growth opportunities could be a consideration for you to collaborate in opening a Baba Rafi kebab franchise.

After seeing the 5 restaurant franchises that could be on your list to start a culinary business without having to build it from scratch, are you interested in exploring and researching further?

If you need additional capital to open your dream franchise, ESB has a capital solution through ESB Capital, which offers unsecured loans with reasonable interest rates. Let's solidify your strategies and goals to build a successful restaurant franchise business!