Signature brands

Signature Brands portfolio

Our Signature Brands portfolio comprises a range of bespoke Casual Dining offerings. There are 152 Signature Brands restaurants in South Africa and one Zambia-based Turn ‘n Tender. Except for PAUL, which is operated under a licence agreement and all are Company-owned stores, Signature Brands are 100% owned by Famous Brands. The Group operates 10 Company-owned stores within the Signature Brands portfolio.

Signature Brands has segmented its portfolio into the following three categories:

Fun Dining

Mythos is a contemporary Greek restaurant with a traditional spirit, serving time-honoured dishes and modern cuisine in a stylish Mediterranean setting. The authentic dining experience is infused with the customary Greek passion for life.

With a strong Roman influence, LUPA Osteria offers modern yet traditional neighbourhood Italian food in a warm, welcoming environment. From our pasta and sauces to our pizza bases, everything is made from scratch by our talented chefs.

In 1977, four brothers with a love for the finest steak, opened their first Turn ‘n Tender restaurant, a traditional South African steakhouse. Decades later, the brand has evolved to become a destination for discerning lovers of steak, ribs, burgers and fine wine in a contemporary setting.

SALSA serves authentic Mexican food prepared traditionally, with an unconventional twist. The cuisine is complemented by craft tequilas and beers and a dining experience that epitomises vibrant and welcoming Mexican entertaining.

Luxury

Founded in 1889 in France, PAUL¹ is an internationally renowned fifth-generation family-owned artisanal bakery-café chain. The brand’s traditional French offering is served in its trademark chic restaurants, complemented by crafted baked products. Famous Brands holds the licence agreement for PAUL in South Africa.

Vovo Telo is a specialist artisan bakery synonymous with excellence in craft baking, mouth-watering breakfasts and lunches and perfectly brewed coffee. The brand uses local artisanal products, supporting producers who share its respect for quality and integrity.

Captive Markets

Fego Caffé epitomises café-style dining, serving delicious light meals, sweet treats and unparalleled coffee. With the finest beans sourced from South America and Africa, the brand is the connoisseur’s choice for an extraordinary coffee experience.

Coffee Couture is a specialised hospital coffee shop brand situated in Mediclinic hospitals nationwide. Coffee Couture’s offering comprises tasty meals complemented by a creative coffee offering. The brand also offers a range of gifts and other convenience retail items.

Established in 1965, House of Coffees is a specialist coffee shop serving premium coffees and hearty meals. The brand’s restaurant patrons enjoy the high-quality coffee blends which are also available in leading retailers nationwide.

Our bespoke NetCafé brand was created to cater to the Netcare Group’s hospital staff, patients, and visitors. The brand offering comprises a full sit-down menu, a deli section and a retail convenience outlet. Netcare operates the largest private hospital business in South Africa.

Trading conditions

Signature Brands overall sales turnover bounced back for the year but is still lower than pre-COVID-19 levels. These figures continue to improve each month. Signature Brands are particularly impacted by COVID-19 restrictions such as curfews, capacity reductions and alcohol restrictions. These trading conditions are not conducive to attracting interest from potential new franchisees.

Performance and focus areas

Like-for-like sales were up by 59.3%, while system-wide sales were up 56.1%. Operating margins improved to -5.3% (2021: -41.1% before impairment to goodwill). Delivery remained strong.

Fun Dining

The Fun Dining category experienced strong growth in the first quarter of the year. This growth was eroded by the restrictions that followed the third and fourth COVID-19 waves.

Captive Markets

NetCafé and Coffee Couture, which operate in Netcare and Mediclinic hospitals, are the hardest hit by COVID-19 trading restrictions. These restrictions include one visitor per patient per day, no casual visitors, limited visits from hospital suppliers and sales representatives and a ban on the sit-down service. While some restrictions are loosening, sales turnovers are tracking way below pre-COVID-19 levels. These are expected to recover in 2023.

Vovo Telo’s restaurants are primarily located in local residential malls. The brand’s strong coffee, breakfast and lunch offering performed well, almost reaching pre-COVID sales.

Luxury

PAUL¹ was the best-performing restaurant in the portfolio for the second consecutive year. These restaurants have strong day trading attributes, rely less on alcohol sales and evening trade, and are less affected by the COVID-19 curfew and alcohol restrictions. In 2022, the brand opened three new restaurants in premium shopping precincts.

Optimising our operating structure

In 2021, Signature Brands completed the strategy of rationalising its portfolio. In 2022, the focus shifted to optimising the operating structure to support the growth of the portfolio categories.

In 2022, Famous Brands bought out the minority shareholders in LUPA Osteria and Turn ‘n Tender. All four Fun Dining brands are now 100% owned by Famous Brands. This change in ownership structure allowed the Signature Brands team to consolidate the management structure into an efficient services hub to support each portfolio category, providing dedicated procurement, finance, menu development, IT and franchise services.

Famous Brands completed a corporate restructure where the Fun Dining franchised businesses were consolidated into one entity called FB Signature Brands. The Company-owned restaurants were sold into a newly created entity called FB Signature Brands Co Stores. This change simplifies the corporate structure.

Turn ‘n Tender’s central kitchen, which was housed in a separate entity, was sold to Cater Chain in February 2022. This was completed as a processing facility does not fit within a franchise business. The move is sure to unlock synergies for Cater Chain. Cater Chain is 75% owned by Famous Brands.

Supporting franchisees

Famous Brands continues to support franchisees across the portfolio. This support included a reduction of franchise fees for the full year according to a sliding scale. A special compensation was made during the June and July 2021 lockdown and liquor restrictions where franchisees were granted a 50% reduction in franchise fees.

Many franchisees are struggling with cash flow issues as they await the finalisation of insurance payouts. Famous Brands has spent significant time negotiating with landlords on behalf of franchisees regarding rental arrears due to COVID-19. Paying back these arrears is an ongoing challenge for several franchisees and negatively impacts cash flow and the ability of franchisees to re-invest in their restaurants.

Signature Brands designed streamlined menus to simplify restaurant operations and improve margins. This also allowed the restaurants to operate with fewer employees to ensure their businesses could survive in low turnover environments.