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SA's Food Franchising Sector Among 'Best in the World'

18 Jun 2018 - You may not have heard of Fournews, but you probably know its brands: Moyo restaurants, News Cafe, Krispy Kreme Doughnuts, Brooklyn Brothers, Senhor Peri Peri, Hello Tomato and Soul Souvlaki. A separate division, Fournews Logistics, manufactures and distributes food items to the franchise operations.

News Cafe is the largest and most established of the brands. What's unique about Fournews is the niche nature of its brands, each catering to a particular gap in the market. News Cafe serves a predominantly black upper middle class clientele, with its blend of cocktail bar and premium food menus. Moyo is well known for putting African cuisine on the map, has been an iconic destination for tourists, and creates a family-friendly atmosphere with live music and face painting.

Senhor Peri Peri offers a mix of Portuguese and Mozambican-themed dishes that have been around since 1992 (originally through Calisto's Portuguese Restaurants and Senhor Calisto's fast food outlets; Fournews acquired a significant stake in the Calisto's franchise in September 2016). Krispy Kreme Doughnuts is the newest of the group's brands. It was introduced to SA from the US by John Khoury, founder of Europa, and Gerry Thomas, who is MD of Krispy Kreme. The rest of the Fournews brands are home-grown. Brooklyn Brothers offers a high-end New York diner experience, including hotdogs, wings and burgers. Hello Tomato is a New York inspired Italian-American themed franchise offering pasta and thin-crusted pizza. The Greek street-food theme of the Soul Souvlaki franchise rounds off the Mediterranean experience.

The group was founded by the five directors: chief financial officer Evan Florias, Krispy Kreme marketing director Nick Eleftheriadis, brand director Michael Deftereos, logistics director Lambros Argirys, and Stavros Florias, who is no longer an active director. Manny Nichas, manager for new business, was one of the directors of Ocean Basket and held the CEO post for 13 years before leaving to run his private business interests.

There�s a trove of franchising experience in the group. Argirys started PostNet in SA, while his father launched the House of Coffees brand. Deftereos was previously MD of Headline Leisure Management (a division of Fournews), a specialist outsourced food and beverage company operating within casinos, hotels and airports.

With seven brands already in the portfolio, is there room for more?

�For now we have enough brands,� says Nichas. �We want to build on the brands we already have, expand the number of franchised outlets, and strengthen our support and logistics.�

The franchise route is the fastest way to expand, but success is measured by the strength of the brand and customer loyalty. Nichas says franchised food outlets must be refurbished every five to seven years to remain relevant. This involves sprucing up the image and customer experience, and redesigning the menu.

Food is as much a creature of fashion as clothes. Customer tastes are constantly evolving � Tomahawk steaks, craft beers and food bowls comprising a mix of fresh and healthy ingredients are in hot demand these days. Customers are more discerning than in the past and want fresh, healthy ingredients in all dishes.

The dining experience is just as important as the menu and levels of service. Music and lighting are critical to the experience. In many regards New Cafe has set the pace for creating an edgy, vibrant environment for socialising and dining, which is probably why it has won the award for best cocktail bar in SA 19 years in a row.

It�s an established fact that SA�s food franchising sector is up there with the best in the world in terms of quality, branding and franchisee support. Nando�s and Steers are instantly recognisable in many of the capitals of Europe and Africa, and if you travel to Dar es Salaam, Lusaka, Nairobi, Gaborone or Windhoek, you will likely detect the warm, familiar colours of a News Cafe.

These are hard times for franchise operators. Nichas says three factors account for the overall squeeze on consumer spending in franchised food outlets: �The key factor here is the weakness of the economy. There�s less money to spend in all areas. Secondly, those franchisors that do not rebirth their brands are suffering. Look at the store closures surrounding Edgars and Stuttafords. We pay very close attention to this and this is why we are revamping our Moyo brand into Moyo Urban, and News Cafe has undergone a brand re-imaging.

�A third factor that is hitting the franchise sector is the cost of leases in shopping malls. These continue to escalate no matter how the centre or the economy is performing. On the other hand, if you want to succeed, you must have the very best locations to attract foot traffic.�


Moneyweb