Famous Brands moves into Africa

IN LINE with its strategy to expand in Africa, Famous Brands has awarded a master licence agreement for Milky Lane in Namibia.

“The brand (Milky Lane) has the potential to support at least 10 restaurants in the region,” says Famous Brands.

The group acquired the franchise agreements, trademarks and intellectual property of Milky Lane and Juicy Lucy from Java Brands for R30,95m March last year.

There is one Milky Lane in Windhoek. Another restaurant will be opened in Swakopmund next month. The master licence for the brand in Namibia was awarded yesterday to De Wet Oosthuizen, a business partner who has had a long relationship with the group.

Famous Brands’ master licence agreements afford the licensee the right to serve as the group’s agent in a territory, in terms of which they manage the business on behalf of the group in exchange for a royalty payment for intellectual property rights and business systems.

Mr Oosthuizen began his relationship with Famous Brands in 1997 when he acquired a Steers franchise in Windhoek in Namibia. In 2003, he won the Namibian master licence for the Steers and Debonairs Pizza brands and, in 2006, the licence for FishAways.

He now owns four Steers restaurants, three Debonairs Pizza restaurants, and two FishAways restaurants in the country.

Mr Oosthuizen says the Milky Lane opportunity will create jobs and help to keep Namibia in step with global trends.

“It is fantastic to be part of and have the support of the leading franchise group in Africa.

“Namibia’s hot summer climate and short winter lends itself to a vibrant ice-cream culture,” Mr Oosthuizen says.

Famous Brands established its brand in Namibia in the early 1990s. It has plans to grow the base of Steers, Debonairs Pizza and FishAways in the country by a further 13 stores by next month.

“The stable economy, linked currency, steady tourism flow and ease of access from a travel perspective make it an attractive market,” says Darren Hele, Famous Brands’ chief operating officer for franchising.

Namibia is not the only African country on which the group has set its sights.

“In the immediate short term we have a business model where we plan to open 47 restaurants outside of SA,” says the group’s CEO, Kevin Hedderwick.

According to Euromonitor International, six of the 10 fastest- growing economies in the world this year will be African. Rising disposable incomes due to strong economic growth are bolstering growing domestic markets in Africa, and an emerging middle class in the middle-income countries is developing as a result.

“As disposable incomes are increasing away from subsistence levels, opportunities for nonessential consumption goods are rising,” says the market researcher.

Famous Brands has a dedicated focus on Africa by virtue of having divided the territory into three categories: West Africa, Southern Africa, and central Africa, each with its own country manager.

“We’ve been in Africa for 12 years, we are not like those guys who just started there yesterday, we’ve paid our school fees — it is a tough place to trade.

“Our philosophy about Africa is to think narrow and deep rather than wide. So we go into existing countries, and work that country very hard,” Mr Hedderwick says.

Famous Brands operates in 15 African countries, including Zambia, Ghana and Nigeria.

“The consumer boom in Africa presents a compelling opportunity. Urbanisation and the convenience element are driving QSR (quick service restaurant) growth,” says Lydia Harris, an emerging markets analyst at Walton Capital.

Spur Corporation says its international expansion will focus specifically on Africa, with franchised Spur restaurants planned for Lagos, Lusaka, Nairobi and Gaborone.

Yum! Brands, the parent of KFC, plans to introduce the brand to new markets such as Angola, Malawi, Tanzania, Uganda, Zimbabwe, the Democratic Republic of Congo and Madagascar.