KENYA – South African based restaurant franchisor, Famous Brands is set to take direct control over seven outlets of Steers and Debonairs in Kenya previously run by local franchisee Hoggers.
Famous Brands is set to run the business through its local subsidiary FB franchising Kenya, once the regulator grants the parties a go-ahead to undertake the transaction of which the buyer is set to use its cash reserves.
The intention is to revamp the existing restaurants as a priority and in time, expand within the market as trading conditions permit.
“The transaction is subject to suspensive conditions, including regulatory approvals. Assuming the successful conclusion of the acquisition, the deal will be effective 1 November 2019,” said Famous Brands in a statement.
The Group has acquired the seven trading outlets owned by former Master Licensees, Hoggers, in Kenya, as a going concern. The restaurants were managed by the Master Licensees until 2017 when the license was revoked.
Hoggers declined to reveal the value of the transaction citing a non-disclosure agreement between the parties but revealed the franchiser is now set to embark on an expansion drive.
“I can tell you that this is part of an overall restructuring that will enable the expansion of Steers and Debonairs Pizza Restaurants under a franchising model. A public announcement will be made at a later date,” said Mr Azam Samanani, managing director Hoggers.
Famous Brands move to control its Kenya business is in line with the Group’s narrow and deep strategy in the rest of Africa region, which centres on cautiously building a presence in select and tested markets which offer opportunity for expansion.
The franchisor has been currently undertaking closure of Gourmet Burger Kitchen (GBK) under-performing stores.
Famous Brands acquired 100% of Gourmet Burger Kitchen (GBK) for £120m (approximately R2.1bn) from Nando’s in 2016.
Over the years the acquisition has not been fruitful, dragging the group’s profits as a result of poor trading conditions mainly due to uncertainty around Brexit.
This has led to the closure of some of its branches and rendering leases at a lower cost. This comes as part of the company’s Voluntary Arrangement of restructuring allowing Famous Brands to skive insolvency.
Famous Brands is also the parent company of the Mugg & Bean chain restaurant that has recently opened a number of outlets across Total Petrol following signing of a partnership deal with the oil marketer.