Johannesburg - Famous Brands has signed a 10-year licensing agreement with French global bakery-café brand PAUL in a deal that the local company hopes will complement its strategy of fortifying its position in the premium end of the food service market.
The group, which has a presence in 41 countries and over 800 restaurants, would hopefully have the first outlet up and running in South Africa in the next nine months, Famous Brands chief executive Kevin Hedderwick said yesterday.
In terms of the 10-year licence agreement with PAUL, Famous Brands will open five restaurants within a five-year period in three trading formats.
The first flagship PAUL restaurant is scheduled to open by the end of next year.
“The licence agreement talks about opening five stores in five years is, by our standards, quite pedestrian. It will take us probably the next few months to get the first one off the ground,” Hedderwick said.
“I think, PAUL is going to have limited capability to grow, but given our Famous Brands technique I would be disappointed if we opened five shops in five years, it’s not our style.”
He said he would be happier with between 10 and 15 shops in a five-year period and further growth would be driven by demand.
Internationally, PAUL has partnered with operators across Europe, Africa, Asia, America and the Middle East.
Hedderwick said in the South African context, there wasn’t another bakery-café operating in the space that PAUL occupied, and as such, Famous Brands had an opportunity to be the first movers in this category, with the most recognisable French bakery-café brand in the world.
“It is a global brand, it’s a brand that a lot of South Africans who travel can associate with. So if you look at our brand portfolio this can quite easily stand on its own,” he said.
He said efforts would be made to source as much local content as possible but that the deal came with stipulations of buying some products directly from PAUL to retain the brand’s tradition and flavour.
Famous Brands shares on the JSE gained 0.75 percent yesterday to close at R135, valuing the company at R13.5 billion.
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