Famous Brands establishes robust growth platform for Middle East and North Africa

Johannesburg: Wednesday, 09 April 2014: Famous Brands has established a strong platform for growth in the Middle East and North Africa regions with the signing of a Master License agreement for Saudi Arabia, Lebanon, Morocco, Iran and Egypt. The agreement applies to the Group’s Steers, Wimpy and Debonairs Pizza brands in all of these countries, as well as the Mugg & Bean brand in Morocco and Egypt. The Master License agreement has been concluded with Xcelium (“Xcelium”), a bespoke food services business created by parent company Xcelium Holdings LLC (“Xcelium Holdings”), domiciled in Lebanon, and a leading developer of telecommunications in Africa. This agreement affords Xcelium the right to perform as Famous Brands’ agent in the specified countries, whereby Xcelium manages the business on behalf of the Group in exchange for a royalty payment to utilise the Group’s intellectual property and business systems. The agreement incorporates an aggressive roll-out plan which targets opening 38 restaurants in these five countries within five years. Mark Hedderwick, Famous Brands’ Managing Executive for Rest of Africa comments, “Our current footprint in the Middle East and North Africa is small, comprising three Debonairs Pizza restaurants in Dubai, four in Sudan, as well as one Steers restaurant.” He notes, “The opportunity to grow our network in these regions is significant, underpinned by the robust ambitions and pragmatic enthusiasm of our partner, Xcelium. Their extensive business experience in the Middle East and North Africa provides us with invaluable insight into local markets and operating practices. Their commitment to this venture has already been demonstrated by their significant investment to date in training and recruitment ahead of the formalisation of the agreement.” “Whilst some international brands have already penetrated certain of these markets, consumer demand and aspirations remain relatively underserviced. Local eateries and “informal” indigenous restaurants still account for the lion’s share of consumer spend. From the Group’s perspective, our strategic advantage is early-to-market or first-mover status. Crucial to this approach is that we enter our chosen markets with partners who complement our strength in brands and operational expertise with their market intelligence and infrastructure,” he says. In terms of the specific brands selected for roll out, Hedderwick notes, “We are extremely confident of Debonairs Pizza having universal appeal, particularly in emerging and emerged markets where the pizza category continues to show phenomenal growth. With regard to Steers, Wimpy and Mugg & Bean, the roll out will be more circumspect and selective. Given our extensive experience of trading outside of South Africa – including almost 20 years in the Rest of Africa – we will approach each area of jurisdiction with cautious optimism.” Xcelium Chief Executive Officer, Yasser Zein, says, “We have been working with Famous Brands since early 2013 on the granting of this Master License and are very excited that it has now been concluded. This partnership enables us to create memorable experiences for our customers who are looking for a food offering that blends quality service with value pricing, situated in a friendly environment and efficient in-store experience.” Zein adds, “Our knowledge of the local markets and consumer expectations, together with Famous Brands’ professional structure, ongoing support and brand repertoire which accommodates a wide range of customers in our market, are significant factors in promoting the success of this venture. We believe this partnership will also strengthen our position in acquiring prime retail sites in the market.” Hedderwick concludes, “The demographics of Middle Eastern and North African consumers favour quick service food consumption. Approximately 25% – 30% of the Middle Eastern population is aged between 15-29 years old and has grown up eating processed foods and dining in Western-style fast food restaurants and coffee shops. In addition, women in these regions are now better positioned to build careers and financial independence than previous generations, promoting increased disposable income. Furthermore, similar to many other emerging markets, as consumers become cash-rich but time-poor, they gravitate towards convenience-food solutions. Given these factors, we are optimistic about the potential this Master License agreement holds for Famous Brands.”     Notes to editors:
Famous Brands trades in 16 countries in the Rest of Africa and operates through Master License agreements in 11 of those.
For further information:
Mark Hedderwick Managing Executive – Rest of Africa Famous Brands Ltd Telephone: 011 651 5726 Del-Maree English Investor Communications Mobile: 083 395 8608 Julian Gwillim Aprio Mobile: 082 452 4389