As a people-orientated business, strong and long-lasting stakeholder relationships are the cornerstone of our ability to generate shared value over the short, medium and long term.
Our key stakeholders are those individuals and organisations that have an impact on or are affected by our operations. We strive for constructive engagements with stakeholders to understand and respond to their interests and concerns. Our stakeholder management approach relies on the management principles of positive partnerships, consultation and teamwork to achieve common goals.
Our stakeholder management framework
The responsibility for stakeholder management is shared across the Group. Members of the Exco and representatives of functional disciplines engage directly with stakeholders. Members of the Board may also engage directly with stakeholders when required.
The functional disciplines embed monitoring stakeholder engagement, including:
- Investor input and feedback through investor roadshows, one-on-one access, and virtual events.
- Formal consumer feedback through consumer service channels.
- Monitoring social media for negative and positive reviews.
- Community involvement through CSI activities.
- The Human Resources (HR) department provides a union relationship monitoring mechanism.
- Employee feedback through annual surveys.
- Franchise partner feedback through regular engagement, national representative forums and annual franchise forums.
The Social and Ethics Working Group supports the Social and Ethics Committee on an executive level to ensure effective stakeholder management within Famous Brands. The Working Group reports to the Social and Ethics Committee regularly.
While the Social and Ethics Committee is primarily responsible for overseeing stakeholder management, other Board Committees are also involved. The Audit and Risk Committee supervises engagement with the JSE, funder institutions, shareholders and investors. The Remuneration Committee is involved with interactions with shareholders regarding remuneration decisions.
Where necessary, concerns and stakeholder communications improvement opportunities are escalated to the responsible senior executives, Exco or the Board.
Stakeholder communications
The Group’s stakeholder engagement strategy guides interactions with stakeholders. Our engagement strategies are based on the degree to which our stakeholders impact us, our impact on them, and how we interact with them. We tailor our engagement channels to the needs of the stakeholder, and these include electronic and written communication, direct interaction, franchise partner and employee specific platforms as well as the media.
We use the following criteria to prioritise the relative importance of our wide range of stakeholders:
- Our dependence on the stakeholder’s support to achieve our strategic goals.
- The stakeholder’s influence on our performance.
- The significance of the risks and opportunities linking the stakeholder to the Group.
- The risks we face should we not engage constructively with the stakeholder.
Evaluating the quality of relationships with our stakeholders
We follow an internal assessment of our stakeholder relationships and have the following three categories:
| The relationship is established and generates value, but can be improved |  |
| Mutually beneficial, good relationship, some opportunity for improvement |  |
| Strong, mutually beneficial relationship |  |
1. Shareholders, market analysts and prospective investors
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Deterioration of investor confidence. |
Key strategic matters 
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Our shareholders and prospective investors provide financial capital for growth, while market analysts guide our valuation and prospects. Shareholders, market analysts and prospective investors seek reassurance that Famous Brands presents an attractive investment proposition and sustainable growth and are interested in:
- Return on invested capital, regular dividend payments and sustainable earnings growth.
- Prudent capital allocation.
- An appropriate and well-considered remuneration structure.
- Strong corporate governance and ethical and competent leadership.
We respond by clearly and regularly communicating our investment case and delivering on our strategy to build confidence in management and the business’s long-term potential. Management has extensive industry experience and is guided by a highly competent Board. Management endeavours to lead by example and, through behaviour and policies, instil good corporate governance practices throughout the business.
The Group has a considered approach to gearing and leverage in line with ensuring an appropriate capital structure. Over the years, we also made considerable progress in maturing our risk management processes.
Our remuneration and reward structures align management’s interests with shareholders. In 2023, in response to shareholder concerns, we have reconsidered our Remuneration Policy and have proposed a revised Long-Term Share Plan.
Read more about our financial performance, corporate governance and how we approach remuneration.
2. Funding institutions
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Breach of debt covenants and undertakings to the primary lender. |
Key strategic matters 
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Funding institutions provide financial capital for growth and facilitate balance sheet support. They seek a mutually beneficial relationship where their funding supports our Group’s development, which makes Famous Brands a better and bigger consumer. They expect Famous Brands to apply responsible capital management and timely payment of interest and capital as well as compliance with debt covenants.
We have a track record of meeting our funding obligations and have cultivated support and long-term relationships with our bankers. We ensure that covenants are met, and we proactively manage our debt maturity profile.
3. Franchise partners
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Deteriorating relationship due to our failure to meet their expectations. |
Key strategic matters 
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Our franchise partners represent our brands and are our primary source of revenue. They are looking for a franchisor who is responsive to their needs and is prepared to invest in the relationship. They expect:
- Return on investment.
- Strong brands, quality products and efficient marketing spend.
- Efficient and competitive Supply Chain.
- Advice on selecting high potential location restaurants.
- Ongoing business management support.
We view our partnerships as long-term relationships which require ongoing attention and our franchise partners’ insights and contributions are welcomed. Our dedicated operations teams ensure our franchise partners receive support in managing a successful restaurant in the areas of finance, marketing, design and development, training and procurement. Our Manufacturing and Logistics operations strive to supply high-quality products on time consistently.
We will continue to evolve and improve our engagement with them to enable us to harness the unique and valuable insights they can provide.
Managing the franchise partner relationship
We have mature franchise systems and decades of experience growing successful franchise brands.
We use full business format franchising, where our franchise partners uses the franchisor’s entire business concept, including the name, trademarks, copyright, know-how and other intellectual property.
As a franchisor, we take our obligations to our franchise partners seriously. This means that we regularly engage with our franchise partners, provide ongoing business support and continually enhance our brands.
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Franchise partner recruitment |
We receive a steady stream of franchise partner applicants, largely from referrals from our existing franchise partners, landlords and our broader network. Franchise partners are attracted to our brands, long track record, and reputation for sound and ethical franchise network management. We encourage applicants to talk to at least three of our existing franchise partners to better understand the brand and what it takes to run a restaurant. Our franchise disclosure document contains all the contact details of our existing franchise partners for that brand. While most aspirant franchise partners will require bank funding, they should have enough unencumbered cash to keep their monthly repayments manageable and cover working capital requirements. When assessing potential franchise partners, we look for proof of people skills, organisational ability and some financial and business management knowledge. We complete criminal and credit checks on all new applicants. Strong people management skills and experience are essential as operating a restaurant requires directing employees and interacting with consumers. Our franchise partners must have some entrepreneurial spirit but should also accept operating within the framework of a franchise system. We seek franchise partners who commit to being owner-operators and not investors. Many of our new sites will be allocated to our existing franchise partners who have expressed an interest in building a multi-franchise network. |
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Lease negotiation |
The right site, floor size, and favourable rental terms are essential to ensure any franchise business’s initial and ongoing success. We assist with site selection, negotiating and managing franchise partner leases, key landlord relationship management and rental benchmarking. We often step in to support our franchise partners with rental renegotiations, considering changes to economic conditions and foot traffic to the site. |
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Developing a site |
We use geographic information system technology to determine whether a site is viable. This type of technology provides demographic data for an area, including population, age brackets and income, while tracking economic activity, competitor activity, and transport flows into the area. We can analyse whether the site is over or under-traded and have the consumer numbers to support the business case. We support the franchise partner by managing all new restaurant fit-outs. This ensures that the look and feel of all new restaurants meet our stringent requirements. We have specific equipment requirements and work with the franchise partner to select and manage equipment suppliers and contractors. We can negotiate the best pricing for our franchise partners through our longstanding industry relationships. Restaurants do not open until Famous Brands signs off the site. We open a Company-owned restaurant where a site meets all our criteria but cannot find a suitable franchise partner, and sell it once the right applicant is identified. |
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Franchise documentation |
We provide a franchise partner applicant with a disclosure document to assist them in evaluating the franchise opportunity. It is only provided after they have signed a non-disclosure agreement. The document includes extensive information about the franchisor, the franchise, financial projections, full costs and fee breakdown. Our franchise partners sign a franchise agreement when joining a franchise. This legal document outlines the terms and conditions the franchise partner and franchisor must adhere to. Our franchise information system is a repository for legal documents, including franchise and lease agreements. The typical franchise agreement is for five years, after which it is either renewed or terminated. Our franchise partners receive access to an online operations manual that includes information on our brand and operational standards and recipes. |
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Onboarding |
Our comprehensive onboarding process usually takes 14 weeks for a new franchise partner. The process includes training our franchise partners and their employees and support to select and interview employees. For Leading Brands, franchise partners can access an online training platform with modules on operating the various franchises. We also offer training in a classroom format and practical in-store training, both at the new restaurant and at other restaurants. Before a restaurant opens, we host a soft opening event for friends and family to allow the franchise partner to test the systems and employees. |
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Engagement |
Our franchise partners received a visit from their franchise manager at least once per month. During this visit, the franchise manager will conduct an operational audit and consult with the franchise partner on the business’s health. The franchise manager will discuss the upcoming menu promotions and incentives offered to our franchise partners if they achieve their targets. Franchise managers look after between 20 to 25 franchise outlets. Our franchise partners can escalate their concerns to an operations manager or regional manager. Our franchise partners receive a monthly newsletter on upcoming promotions and topical industry issues. Leading Brands franchise partners have access to an online portal to access marketing material for local marketing activities. We have set up National Franchise Forums for each brand. This is intended to be a consultative forum where our franchise partners provide input. Through regional roadshows, Famous Brands shares its plans for the year ahead. |
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Margin support |
Our franchise partners benefit from our vertically integrated Supply Chain. We source products, negotiate pricing and ensure that products meet our standards. We are mindful of keeping our price increases low and not passing through frequent increases. Price certainty assists our franchise partners with their planning. |
4. Consumers and prospective consumers
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Loss of market share due to failure to meet our consumers’ demands. |
Key strategic matters 
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Our consumers’ continued loyalty and patronage are essential to our ongoing sustainability. We maintain and gain market share by meeting consumer demands and leading in the categories where we compete. We value and act on our consumers’ feedback. Consumers trust our brands to deliver:
- Strong value offerings, including location accessibility and convenience.
- Positive total experience, including menu innovation and a strong dining experience.
For our brands to maintain and gain market share, they must remain relevant, accessible and offer value. We enhance the consumer experience through innovation, excellent execution and continuous improvement. We maintain our standards through the following:
- Regular restaurant reviews and audits to ensure our high standards are maintained.
- Prioritising food quality and safety across the Supply Chain.
- An ongoing restaurant revamp programme to continue to meet our consumers’ expectations.
- Innovation to keep up with evolving trends.
- A call centre to manage queries and complaints and monitoring online and social media reviews to identity issues.
Read more about how we respond to consumer trends in our operating context and our investments in consumer-facing technology.
5. Civil society and community
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Exco member accountable Darren Hele, Philip Smith |
Relationship quality
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Key risk Reputational damage to Famous Brands due to the actions of an unethical CSI partner. |
Key strategic matters
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Our continued license to operate depends on a sound relationship with civil society and the community. Our CSI partners seek sustained, dependable support and an association with a reputable brand. Civil society expects Famous Brands to operate in a way that reduces our negative impact on the environment. We are also expected to treat our consumers, employees and communities responsibly.
Supporting the community is a key component of brand building for our Leading Brands, who run programmes to support long-standing CSI partners. In addition, our franchise partners also support the communities where they operate, both in South Africa and outside our borders. We have sponsored university-level sporting programmes that develop future South Africa sporting stars.
Read more in our CSI report.
Our environmental policy outlines our commitment to responsible environmental practices. It identifies critical focus areas and objectives regarding reducing our environmental footprint and contributing to a more sustainable operating environment.
Read more about our sustainability journey and our environmental report.
6. Business partners and suppliers
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Our suppliers and business partners lose confidence in our ability to fulfil their agreements and contracts. |
Key strategic matters 
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Our suppliers and business partners support Famous Brands in fulfilling our obligations to our franchise partners by supplying important products and services. Many of our business partners contribute to the Group’s strategy execution and expect timely payment, fair treatment and a long-term, mutually beneficial relationship.
Our contractual arrangements facilitate quality and food safety adherence and transparent, healthy relationships with suppliers. B-BBEE status and compliance are important when selecting suppliers or business partners. Our procurement and planning teams interact with suppliers frequently to ensure successful partnerships. We are working to improve our internal processes and fulfilment of commitments to suppliers.
Suppliers which are B-BBEE-compliant are eligible to participate in our annual supplier awards.
Read more in our transformation report.
7. Employees
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Exco member accountable Darren Hele, |
Relationship quality
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Key risk Failure to attract and retain the right calibre and skills required to meet our strategic objectives. |
Key strategic matters 
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Our people are our most valuable asset and we strive to create a safe, harmonious and productive work environment. Employees expect Famous Brands to recognise their contributions and invest in their growth and development. They want their leaders and managers to demonstrate ethical and competent leadership. We offer our employees:
- Fair remuneration and recognition.
- Equal opportunities and career development.
- Training and skills development.
- Safe working environment and job security.
- Good corporate governance and ethical and competent leadership.
Our employees are appropriately remunerated, incentivised and developed. We support the principles of transformation in South Africa, and our transformation policy and strategies aim to uplift historically disadvantaged individuals. We are committed to creating a learning culture. In addition to training our employees, we conduct extensive training for our franchise partners and their employees.
Read more in our human capital report, remuneration report and transformation report.
8. Trade unions
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Exco member accountable Jabulani Mahange |
Relationship quality
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Key risk Poor labour union relationships lead to animosity and potential strikes. |
Key strategic matters 
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Famous Brands protects employees’ rights, including the rights to non-discrimination and freedom of association. Famous Brands has recognition agreements with three trade unions, and 39% of employees are unionised. Trade unions seek the following on behalf of their members:
- Sustainable earnings growth and job security.
- Fair remuneration and recognition.
- Equal opportunities, training and career development.
- Safe working environment.
We acknowledge and respect the role of unions and engage professionally and cordially to find common ground on all matters. By demonstrating that we are an employer of choice and a good-faith partner, we can continue to enhance our existing mutually respectful relationship.
Read more in our human capital report.
9. Government and regulators
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Exco member accountable Darren Hele, Celeste Appollis, |
Relationship quality
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Key risk Failure to ready the business to comply with new legislation. |
Key strategic matters 
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Famous Brands is a responsible corporate citizen that pays its tax, complies with legislation and regulations and is committed to the principles of transformation. In addition, we support the government’s developmental agenda through our CSI activities and our responsible use of natural resources.
We have systems and structures in place to monitor changes to legislation and assess the implication of any changes on our operations and communicate this to relevant stakeholders. Maintaining our Level 2 B-BBEE status is an important management priority.
