SOUTH AFRICA – The American global chain of hamburger fast food restaurants, Burger King has opened its 80th restaurant in Tshwane, Gauteng Province, South Africa surpassing Grand Parade Investments’ (GPI) ambition to reach 75 stores for the iconic food brand.
This is a continuation by the empowerment company to roll out more stores in the next financial year after the franchise had shown positive results and great potential over the past year.
GPI secured majority shareholding of the franchise agreement for Burger King SA in 2012 with exclusive rights to develop and expand the BURGER KING® brand in South Africa’s quick service restaurant.
In December 2017, GPI announced that it targets 100 Burger King stores by the end of 2018 and for the financial year to the end of June, it has opened 20 restaurants.
According to Business Day, if the company had not met the stipulated target of 80 restaurants, there was a risk of losing exclusivity on the Burger King franchise and the 80 stores translate into turnover of about US$76 million.
By the end of the next financial year to the end of June, the firm plans to open 20 more stores with a focus on growth in the market.
In South Africa, Burger King operates 35 ‘drive-thrus’ and the restaurant network achieves sales in excess of US$75,910.00 per month, according to the firm.
To achieve long term growth in existing restaurants, the company is turning to further development with an aim to reach 150 outlets in the medium term and about 250 outlets in the long term.
“Our strategy remains focused on scale, by identifying the communities that love our burgers and building restaurants to reach them,” said Burger King CEO Juan Klopper.
GPI reported that Burger King had increased profit from operations by 546% to US$1.57 million but reported headline loss of US$ 433,216.30 in the half-year to end December.
At the end of December GPI’s stake in Burger King was valued at US$62.83 million.
The news comes after reports that the restaurant chain was struggling to operate profitably and recently, investor confidence has been rocked by the departure of top executives in the last year, including the CEO and financial director in recent weeks.
In May, GPI revealed plans to reduce part of its 18.5% stake in Spur to focus on Burger King franchise.
Plans to increase Burger King SA’s investment include franchise Dunkin Donuts whose business model was changed to enable take it into profitability within 2 years.
GPI also owns gaming investments, including minority stakes in GrandWest Casino in Cape Town and limited payout machine operator GrandSlots.