Business Day (Johannesburg)

South Africa: Famous Brands Buys Small Flame-Grilled Portuguese Chicken Chain

Johannesburg — Famous Brands, the company behind Steer, Wimpy & Mugg & Bean, has plugged a hole in its portfolio - and pits itself squarely against the big roosters of fast-food poultry catering in SA, Nando's and KFC - by buying a small, Alexandra-based flame-grilled Portguese chicken chain with just 4 outlets.

The R1,2m purchase of Giramundo, started by husband and wife team, Buti and Maki Van der Merwe in 2007, gives Famous Brands retail outlets in Bramley, Alexandra, Thembisa and Soweto as well as a production facility. It employs 40 people. It competes squarely in the flame-grilled market that Nando's dominates.

Famous Brands is already planning to expand, however. The company says it will open two new stores, in Kokstad and Nelspruit, by November. There is also the opportunity to establish Giramundo outlets next to Famous Brands' existing franchisees as well as its sites at petrol stations.

"The business model will be based on stand-alone restaurants, and where existing franchisees might have excess retail floor space, a "clip-on" trading format can be installed," the company said in a statement.

Famous Brands only operates through franchised stores, of which it has about 1500 in SA. The Giramundo operation, operated on small sites, will allow a lower-cost entry into the business, CEO Kevin Hedderwick said.

"We have set ourselves the objective whereby a typical 70 - 90 square meter quick-service trading format will not cost more than R1m," he said.

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