Local and international businesses are pursuing franchise opportunities in Ethiopia, while industry representatives say clearer legal protections and stronger intellectual property safeguards are needed to support the sector’s development.
The opportunities and challenges were highlighted at the African Franchise Expo in Addis Ababa, where companies presented expansion plans and sought partnerships with prospective investors.
Brooke Mamo, manager of the expo, said franchise arrangements in Ethiopia currently rely on contracts prepared through lawyers rather than a dedicated franchise law.
The event aims to help local businesses establish their brands domestically before expanding into other African countries and international markets. Following its first edition in Addis Ababa, organisers expect to hold the next expo in Nairobi, Kenya, followed by a third in Kigali, Rwanda.
AI-CHA Ice Cream and Tea said more than 25 Ethiopians had each paid 3.2 million birr for franchise packages.
Maramawit Aklilu, a marketing specialist at AI-CHA Ethiopia, said the company entered the Ethiopian market six months ago and expects its first outlets to open within two months.
She described AI-CHA as an international brand based in Indonesia, with headquarters in Malaysia. Its franchise package includes a licence, 14 machines and an initial one-month supply of inputs.
Prospective franchisees must provide at least 10 square metres of retail space. According to Maramawit, the company does not charge royalty fees and supplies its branded products, while operators provide items such as ice, milk and lemons.
She said the company also maintains a minimum distance of two kilometres between outlets to limit competition among franchisees.
Ethiopian businesses are also exploring franchising, although some are still developing their operating models and contractual arrangements.
Etsegenet Melaku, marketing manager of BGS Poultry Farm, said the company operates seven chicken restaurants and four supermarkets in Addis Ababa.
BGS raises poultry on its own farm, processes products at its slaughterhouse and supplies its restaurants through an integrated production and distribution system.
The company plans to expand its supermarket network to 10 outlets. However, it intends to begin franchising its restaurant business only after establishing 10 company-managed restaurants.
Etsegenet said BGS is assessing market demand and preparing legal arrangements before setting eligibility criteria for franchise partners.
Naflet Hotels is also seeking investors to support its expansion. Marketing manager Meskerem Benti said the company began operating in Adama four years ago and is developing additional hotels in Addis Ababa and Zeway.
The company is targeting individual and institutional investors in Ethiopia and elsewhere in Africa, including owners of existing hotel buildings, developers with projects under construction and investors interested in building new properties.
Franchise and intellectual property lawyer Meskerem Derso (PhD) said securing intellectual property rights should be a priority for businesses planning to franchise.
She said franchising allows owners to commercialise their ideas, expand their brands and generate income, but requires appropriate protection for trademarks, creative works and trade secrets.
Although Ethiopia lacks a standalone franchise law, businesses can draw on existing civil and commercial laws, contractual provisions, investment legislation, tax laws and intellectual property regulations when establishing agreements, she said.
Meskerem encouraged Ethiopian companies to consider opportunities in other African markets, pointing to the African Continental Free Trade Area as a framework for reaching customers across the continent. However, she stressed that businesses should secure ownership and protection of their intellectual property before entering franchise arrangements.
Addis Alemayehu, chairman of Kazana Group, said franchising offers entrepreneurs a route into business using an established brand, operating model and procedures rather than building an enterprise entirely from scratch.
He said adopting tested systems can reduce some of the work and risks associated with starting a business.
The discussions underscored growing commercial interest in franchising, alongside the need for clear agreements defining brand ownership, operating responsibilities and the rights of both businesses and investors.
