South African brands headed to MENA

April 10, 2014 | By RetailME Bureau

South African brands Steers, Wimpy, Debonairs Pizza and Mugg & Bean are headed to the Middle East and North Africa (MENA), following a master license agreement between South African restaurant franchise group Famous Brands and Lebanese-based food service company Xcelium, which runs quick-service brands such as Chicken Now and Dino’s Little Italy.

The deal will see a roll-out of 38 restaurants across Saudi Arabia, Lebanon, Morocco, Iran and Egypt within five years. With market capitalisation of $984 million and regarded as the ‘big daddy’ of South African franchising, Famous Brands is pushing into fast-growing markets such as Nigeria and India. Currently, Famous Brands has a small footprint in the MENA region, with three Debonairs Pizza restaurants in Dubai, four in udan and one Steers restaurant in Sudan.

“The opportunity to grow our network in these regions is significant. Though some international brands have already penetrated certain of these markets, consumer demand and aspirations remain relatively underserviced,” he said. While chains such as Burger King and KFC have a presence, local eateries and informal indigenous restaurants still account for the lion’s share of consumer spend. “Our strategic advantage is early-to-market or first-mover status,” says Mark Hedderwick, managing executive, Famous Brands, Africa region.

In terms of the specific brands selected for roll out, Kevin Hedderwick, CEO of Famous Brands is confident that Debonairs Pizza will have universal appeal. Yasser Zein, CEO of Xcelium says the partnership would strengthen the company’s position in acquiring prime retail sites.

“All these countries have a big appetite for quick service restaurants and fast food, and given that Famous Brands is expanding well north of our borders, the experience they had in Africa will stand them in very good stead,” say Chris Gilmour, analyst at South Africa’s Absa Investments.

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