Famous Brands is exploring opportunities in Nigeria, which is “well positioned” for South African companies, and the company will focus on Zimbabwe and Mauritius if it continues to push into Africa.
The company’s chief executive, Kevin Hedderwick, recently said that Nigeria was “better positioned now for South African companies than ever before as the political situation has settled”.
The quick service restaurant group has three Debonairs Pizza outlets in Nigeria, which is home to 160 million people.
Hedderwick said these outlets were performing well due to the economic recovery, “but to have three outlets after 10 years is hardly a home run”.
Debonairs could do a lot better, he said, adding that Steers and the group’s new chicken brand, Giramundos, could also do well in Nigeria.
But an existing operator in Nigeria was required to build the business there, he said.
Speaking about South African companies entering Nigeria, Hedderwick said: “If you find the right strategic partner you can do well.”
According to its 2011 annual report, Famous Brands has more than 120 outlets in 16 African countries, most of which are either Debonairs Pizza, Steers or Wimpy stores.
They are managed by local partners through master licence agreements. Countries in which such agreements had worked well included Mauritius, Kenya, Botswana and Namibia, Hedderwick said.
Famous Brands’ international operations include 131 Wimpy outlets in the UK.
The group intends testing Steers in the UK before the end of the year, while it operates more than 1 600 outlets in South Africa.
In terms of Africa, Hedderwick said Famous Brands was looking at introducing new products and brands into markets on the continent that had stable economies. These plans included taking a fresh look at Zimbabwe, where it had 10 Steers outlets and intended to expand its presence within the next 14 months.
In Mauritius an agreement with Gaeten Ning, who already has a master licence from the group for Swaziland and Mozambique, has resulted in Famous Brands’ footprint on the island expanding quickly.
Ning operates Debonairs Pizza, Steers, Wimpy, Mugg & Bean, FishAways and Black Steer. When the agreement was signed late last year, Ning intended to double his existing store network from seven to 14 outlets in the next two years, with a full roll-out to 20 stores in the medium term, it was previously reported.
But Hedderwick said that by the end of the year the group expected to increase its number of outlets from 17 to 25.
Absa Investments equity analyst Chris Gilmour said the group’s strategy in Africa was certainly a sensible one as a “big demand” existed for their products, such as pizza, which was not common fare in some African countries.
It was a great strategy, he said, particularly as consumer facing industries in Africa were growing fast as the middle class expanded and now accounted for a third of the continent’s gross regional product.