Discusses opportunities for U.S. franchisers and legal requirements in the market.
Last Published: 8/11/2017

Generally, the Nigeria is considered a potential franchise market of over one hundred billion dollars in annual revenue across both products and services and a major growth market for U.S. franchise concepts and franchise development services.  This situation offers U.S. franchisors the opportunity for a first-mover advantage, using their wealth of experience and the economic impact of franchising to the U.S. economy.
 
At this time, several major U.S. brands are present in the Nigerian market, but there is significant room for new market entrants.  Current market size, judging by active industry sectors such as quick service restaurants (fast food), ICT training and consulting services, production/distribution of beverages, personal and business development services, transportation, and oil/gas distribution, is estimated to be about $25 billion (in products and services).
 
Aside from Coca-Cola and Pepsi, which have been in Nigeria for over 50 years, KFC was the first major U.S. food brand to open outlets in Nigeria, and the most recent is Tutor Doctor.  Many more companies are exploring the market, and many South African and European brands are establishing a presence in Nigeria too.  This growth trend is expected to continue over the foreseeable future and in fact is already having a spillover effect on other industry sectors.  International brands include Kentucky Fried Chicken, Avis Car Rental, Crestcom (Trainers to the World), Fastrackids, Tutor Doctor (Home Tutoring), Precision Tune Auto Care Center, Signorama, Computer Troubleshooters, WSI - Internet Consulting and Education, NIIT, Hawthorn Suites, Johnny Rockets, Dominos, Cold Stone Creamery, Curves, and Hard Rock Cafe. 
 
The industry sectors in which franchising seems to be showing the most promise and growth in Nigeria include fast food, hotel services, professional and service training, fashion, healthcare, oil/gas distribution services, transportation, telecommunications, and distribution services.  Inquiries from industry contacts also suggest a high demand for American-style education and industry-specific training for businesses in diverse sectors including oil and gas.  The success of some indigenous concepts and systems, such as Mr. Biggs, Tastee Chicken, Tantalizers, Chicken Republic, and Peace Mass Transit, has added impetus to the level of interest this method of business expansion is generating in Nigeria.
 
Until now, there was no franchise-specific law in Nigeria, and as a method of marketing and distribution, franchising has been operating under Nigeria's sales law, which derives its operating terms and conditions from British common law.  In 2016, a new Franchise Bill was submitted to the National Assembly, which has passed second reading before the Senate, and it is hoped this would soon be passed into a law governing the franchise sector.  In the meantime, NOTAP (National Office for Technology Acquisition and Promotion, which belongs to the Nigerian Ministry of Science and Technology) remains the sector regulator, but it is reported that their role would be streamlined by the proposed law.
 
NOTAP participates in trade events including international buyer programs such as the annual International Franchise Expo delegation organized by CS Nigeria.  It has a mandate to commercialize institutional research and development with industry.  Additional information or clarification about NOTAP.
 
Each year, CS Nigeria recruits and escorts an official Nigerian delegation to the annual International Franchise Expo organized by the International Franchise Association (IFA) based in Washington, D.C. More information about the International Franchise Expo. Interested U.S. franchisors may utilize the services of CS Nigeria to identify, pre-qualify, and select a competent and reliable master franchisee or area developer for the country.  The Nigerian Franchise Association (NIFA)
works closely with IFA and participates in the association’s trade events.  NIFA is a valuable resource for Nigerian and U.S. companies looking to develop franchise business in Nigeria.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.


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Nigeria Franchising Business Management