| Mon 2 Aug 2010, 7:30 | | FBR - Famous Brands Limited - Famous Brands satisfies burning desire with Peri |
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FBR
FBR
FBR - Famous Brands Limited - Famous Brands satisfies burning desire with Peri
Peri flame grilled chicken deal
FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
Share code: FBR ISIN code: ZAE000053328
("the company")
PRESS INFORMATION
FAMOUS BRANDS SATISFIES BURNING DESIRE WITH PERI PERI FLAME GRILLED CHICKEN DEAL
Johannesburg, Monday, 02 August, 2010: After an exhaustive decade-long search,
Famous Brands has finally secured its entry into the mainstream chicken
category, with the acquisition of a peri peri flame grilled chicken offering,
`Giramundo`, Portuguese for `around the world`. The transaction has an
effective date of 1 August 2010.
Famous Brands CEO, Kevin Hedderwick says, "Filling the gap in our brand
portfolio with a mainstream chicken offering has been a major priority for the
Group over many years; however, the barriers to entry in this category are high
and the market is one dominated by three major existing players, two of which
compete in the deep fried category, and the other flame grilled. We have over
the past few years researched and robustly examined a number of existing brands,
but to date none have met our requirements - either the price has been
unrealistic or the product has not been capable of achieving our best-in-class
philosophy whereby we occupy either the number one or two position in its
category."
He adds, "The Giramundo transaction ticks all the boxes in terms of our
acquisition criteria and Group strategy. Key to the acquisition is the low cost
of entry and limited associated risks. Famous Brands will invest R1.2 million
in the business to re-engineer and enhance the existing intellectual property
and cover operational costs for the first two years. Of major importance is the
product`s flame grilled positioning - a category within the chicken market that
is showing strong growth. In addition, the product itself has performed
brilliantly in our market research in terms of presentation and taste. Flame
grilled product has gained wide acclaim as a healthy alternative to deep fried
chicken."
The Giramundo business, which was started by husband and wife team, Buti and
Maki Van der Merwe in Alexandra in 2007, currently comprises a retail outlet
situated in Bramley, three container outlets in Alexandra, Thembisa and Soweto,
and a production facility also situated in Bramley. The business currently
employs around 40 people. The operation produces a range of chicken on the bone
and boneless options, including chicken burgers and chicken livers, prepared
with Giramundo`s unique peri peri sauce.
In terms of the agreement, Famous Brands will acquire a 51% controlling stake in
the newly constituted business. Partner Buti Van der Merwe will be retained as
a consultant to collaborate on refining and improving the intellectual property
that he has developed since launching the brand. The Group will also take on
the manufacturing and distribution operations currently conducted at Giramundo`s
Bramley facility.
From the outset, Giramundo will have full access to Famous Brands` comprehensive
business model which includes franchising expertise, manufacturing, distribution
and logistics infrastructure, new business development assistance and an
immediate route to market. Critical to the growth of the business is Famous
Brands` renowned brand-building expertise.
"Effectively we have a brilliant product in terms of flavour and ingredients,
and the upside we will add is to repackage the brand so it is suited to the
Quick Service Restaurant franchise model," comments Hedderwick.
He notes that the Group has already identified sites and franchisees for two new
outlets in Kokstad and Nelspruit, which should commence trading by November
2010.
Significantly, in addition to the potential presented by a network of new
Giramundo stores, is the opportunity to roll out this brand to the Group`s
existing 1500 South African franchisees as well as its petroleum partners. 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. Hedderwick says, "Our franchise and strategic alliance partners
will be ecstatic with this acquisition, because it adds another vital component
to their offering."
"Our vision is to make Giramundo`s a serious contender in the mainstream chicken
category. With this transaction we believe that we have the opportunity to take
a very appealing product and develop it further to become a strong challenger
brand within the flame grilled peri peri chicken market in South Africa," says
Hedderwick.
Giramundo founder, Buti Van der Merwe says, "Giramundo means `around the world`
and that is my ambition for this business - my biggest dream is to achieve
Giramundo`s true growth potential. By partnering with Famous Brands I know that
we can do that. Their expertise and achievements in the food services industry
is incomparable." He adds, "Over the past 18 months I have had numerous
approaches from other corporates and venture capitalists, which I`ve considered,
and I`m satisfied that I have chosen the best possible partner."
Hedderwick notes, "A joint venture has a lot of advantage for us in that we
retain the original skills set and gain valuable insight into this market. It
is also Famous Brands` first real BEE project in terms of franchising and
franchised brands."
Hedderwick says that in addition to empowering the Van der Merwe`s business,
this acquisition will afford many other potential entrepreneurs an opportunity
to access the lucrative and growing chicken category at a set-up cost which is
very attractive. "We have set ourselves the objective whereby a typical 70 - 90
square meter Quick Service trading format will not cost more than R1 million,"
says Hedderwick.
"Against the odds, this humble chicken restaurant has built a formidable
reputation in its surrounds. I am confident that the combination of this superb
quality product and Famous Brands` core competence of building brands in the
food service arena will ensure that Giramundo`s will become one of the Group`s
mainstream brands. The prospects are compelling," Hedderwick concludes.
ends
Notes to editors:
The Group`s brand portfolio includes Steers (516) , Wimpy including UK (651),
Debonairs Pizza (309), FishAways (107), Mugg & Bean (109), tashas (5), House of
Coffees (24), Brazilian Cafe (44) and Blacksteer (10). The Group also
manufactures and supplies its franchisees and the retail trade with a wide range
of meat, sauce, bakery, ice cream, fruit juice and mineral water products.
For further information:
Kevin Hedderwick Del-Maree English
Chief Executive Officer Investor Communications
Famous Brands Ltd Mobile: 083 395 8608
Telephone: 011 651 5812
Famous Brands JSE code: FBR
Famous Brands` website: www.famousbrands.co.za
Date: 02/08/2010 07:30:01 Produced by the JSE SENS Department.
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