IN LINE with its goal to get a bite out of the family casual dining sector, Famous Brands said on Monday that it had acquired the Europa brand from family-owned business Antimo Foods for an undisclosed sum.
The restaurant franchise group‚ whose portfolio includes Wimpy‚ Debonairs Pizza and Steers, has also bought Fego Caffé from Antimo Foods, to grow its repertoire in the breakfast and coffee segments.
Famous Brands CEO Kevin Hedderwick said: "These are really nice quality assets. They do two things for us — they give us the opportunity to get into the family dining environment through Europa. Breakfast and coffee are significant growth trends in South Africa and Fego Caffé gives us the opportunity to expand our presence in that category."
The Europa and Fego Caffé networks consist of 31 and 27 restaurants respectively. The effective date of the transaction is December 1.
The acquisition, which includes the franchise agreements, trademarks and intellectual property of both brands, would be funded via short-term debt repayable over two years, the company said.
Antimo Foods CEO Salvatore Osato said the company was confident its franchisees would benefit from the know-how, infrastructure and support systems associated with Famous Brands.
Over the next five years, Famous Brands, which is credited for introducing the franchise model to the local food industry, will grow Europa and Fego Caffé to about 50 restaurants each.
"Antimo have done a good job of populating Johannesburg and Durban, but outside of that I think there’s certainly lots of scope. Our immediate focus would be to expand in the Western Cape, Eastern Cape, Free State and Mpumalanga, which is virgin territory for us for these two products," Mr Hedderwick said.
Famous Brands — which is the biggest player in the market, dwarfing listed players Spur Corporation and Taste Holdings — said it would continue its strategy to acquire best-in-class brands in the year ahead.
"We are always going to be acquisitive by nature. We don’t look for dominance in a category, we would rather go and play in a number [of categories]. There are things we don’t compete in, like mainstream chicken — we don’t compete with KFC or Nandos. We don’t compete with family dining steakhouse businesses like Spur. If you take Ocean Basket, we don’t compete with seafood sit-down. We certainly aren’t being anticompetitive," he said.
South Africa’s fast-food players have had a stellar run this year, reporting double-digit growth as aggressive and innovative value offers helped increase foot traffic despite disposable income coming under pressure due to escalating electricity tariffs, fuel costs and food inflation.
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