Free State Development Corporation

Franchise Development Fund

Objectives Of The Fund

  • To actively promote franchise businesses in the Free State.
  • Targeting entrepreneurs from previously disadvantaged groups, with the view of promoting Broad Based Black Economic Empowerment.

Financing Policy

Maximum Loan

  • Based on the capital needs, but shall not exceed R5 000 000 per investment.


  • Franchise fee
  • Financing of Vehicles/Automobiles for private use and/or commuter services is explicitly excluded;
  • Purchase/payment of non-income generating assets or expenditure;
  • Debt financing.

Loan Repayment terms

  • 60 to 72 months maximum

Interest Rate (Fluctuating)

  • The interest rate charged will be based on the prevailing prime rate plus 1%

Grace Period

  • The grace period will depend on the nature of a project, which in the case of a new business shall not exceed six months from date of the first disbursement.
  • The interest charged during the grace period shall be capitalized.
  • In case of an existing business the grace period may not exceed one month from date of first disbursement.

Own Contribution

  • Not required



  • A 100% security cover is desirable; however, a minimum cover of 60% may be considered depending on the product and capital required. Viability and risk of the venture shall also be considered for the purpose of determining the security cover.

The following fees and costs shall be payable by all applicants:

  • Initiation fees equal to 2% or R2 500 plus VAT(whichever is lesser) of the approved loan amounts exceeding R50 000, is payable before implementation and disbursement of the loan. (To be capitalised if requested by client).
  • Security registration costs shall be borne by the client and may be capitalised.


  • The borrower must be covered by the FDC group credit insurance scheme for projects limited to a maximum capital exposure covered by the FDC group credit insurance scheme (the premium to be included in the monthly instalment); or cession of own life cover policy on total exposure.
  • Comprehensive insurance to be ceded to the FDC.

FDC Head Office

33 Kellner Street

Tel: 051 4000 800
Email: \

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Fast Facts

  • Capital: Bloemfontein
  • Languages: 64.4% Sesotho
    Languages: 11.9% Afrikaans, 9.1% isiXhosa
  • Population density: 23 people per km²
  • Area 129, 480 km²
  • Share of total SA area 10.6%

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