In a first for the foodservice industry, Famous Brands (JSE code: FBR) has launched a Black Economic Empowerment owner-driver initiative aimed at developing entrepreneurs. The programme, which has been under construction for the past year, is the product of extensive input from industry experts, and is based on compelling financial rationale for both the company and the owner-drivers. Key to the model is optimising fleet utilisation and productivity, resulting in enhanced earnings’ potential for the drivers, and improved customer service.
Famous Brands currently owns 105 vehicles. The intention is to convert 50% of the fleet to owner-drivers within the next three years. Tony Stephens, Managing Executive of Famous Brands’ Supply Chain, says, “A crucial supply chain strategy is to grow critical mass by reclaiming business which was previously outsourced. Significant investment has been made in upgrading our fleet and facilities in KwaZulu Natal (KZN) to accommodate greater volumes and a broader range of multi-temperature products. As a result, we have selected this region to pilot our owner-driver programme.”
The pilot version of the programme currently being implemented in KZN will be rolled out to the Eastern Cape by the end of the year, followed by the Western Cape and Free State early next year, with Gauteng to follow over the longer term. Kevin Hedderwick, CEO of Famous Brands, says, “Famous Brands’ supply chain is a significant contributor to the Group’s financial performance. In the year ended February 2010, our logistics division surpassed for the first time the R1 billion milestone to deliver revenue of R1 103 million. Operating profit of R33 million reflected an improved margin of 3% up from 2.4%. We are constantly focused on improving our margins; this programme will contribute to that goal, whilst simultaneously producing a new crop of entrepreneurs with stable, long term businesses.”
Kevin Hedderwick, CEO of Famous Brands, says, “Famous Brands’ supply chain is a significant contributor to the Group’s financial performance. In the year ended February 2010, our logistics division surpassed for the first time the R1 billion milestone to deliver revenue of R1 103 million. Operating profit of R33 million reflected an improved margin of 3% up from 2.4%. We are constantly focused on improving our margins; this programme will contribute to that goal, whilst simultaneously producing a new crop of entrepreneurs with stable, long term businesses.”
He adds, “Owner-managed businesses are inevitably more productive and more lucrative than company-owned operations; we have experienced this in our franchises and anticipate that this model will transform our proficiency in logistics to first world levels of performance. Prudent investment in training and mentorship will increase the success rate of this programme and we are confident that there is significant upside benefit to be gained for the drivers and the company.” The programme focuses on developing a new skills’ set for the owner-drivers, which includes business skills, financial competence, time management, employee training and understanding of industrial relations and legislation.
The owner-drivers are selected from amongst Famous Brands’ existing employees and undergo a stringent interview process. They must meet key prerequisites in terms of health and ITC credit rating and display a strong record of attendance, discipline, customer service and responsibility. Currently two owner-driver candidates are in training and are set to become the Group’s first owner-drivers, effective 01 July. They are Sibusiso Majozi, who joined Famous Brands in 1995, and Justice Mazibuko who joined in 2000.
The conversion of employees to owner-drivers comprises two phases. In the first phase Famous Brands will guide and mentor the driver over a one year period. During this time, the company owns and continues to insure and service the vehicle. In the second phase, the driver purchases and insures his vehicle, is responsible for the running costs, and operates his business independently from Famous Brands, but under the guidance of a business advisor. At the outset, each driver is responsible for employing three crew members for his business. These employees are typically sourced externally.
Stephens notes, “The goal we share with our owner-drivers is for them to own their R800 000 vehicles within five years. We are confident that with efficient management of their businesses this is achievable.” “We are tremendously optimistic about the opportunities this programme affords these new entrepreneurs to achieve their aspirations,” concludes Stephens.
For further information:
Chief Executive Officer
Famous Brands Ltd
Telephone: 011 651 5812
Mobile: 083 395 8608