RESTAURANT franchise specialist, Spur Corporation, has enjoyed enduring success with its flagship Spur family eateries.
But without detracting from this long-term success story, the Century City headquartered company has battled to gain traction with its ‘offshoot’ restaurant brands. Panarottis, for example, has seen a steady rather than spectacular rollout since its establishment in the nineties. It’s profit contribution remains relatively modest.
But there are indications that Spur are hooking customers in increasing numbers in its seafood venture John Dory’s Fish & Grill. Spur has now opened 29 restaurants countrywide and has pencilled in the opening of another six before March next year.
Spur initially acquired a 60% stake of the fledgling franchise of seven outlets in 2004, acquiring the balance in 2012 when it also took over the entire management of the business. By March 2013 John dory’s had grown year-on-year turnover by 14,2% to R222m and increased its contribution to Spur’s pre-tax profits by 28,1% to R5,8m.
Spur CEO Pierre van Tonder said he was confident John Dory’s is on track to deliver further growth during the year ahead. He said John Dory’s growth would stem from a “refined” business recipe – “carefully and diligently worked on for the past 18 months in conjunction with the new marketing initiative.”
Van Tonder said Spur Corporation’s move to total ownership last year had prompted a significant investment in research and development to enhance the menu offering and dining environment. He said a sushi belt was now standard in all restaurants to give the brand a distinctive edge over its competitors as the go-to lunch or supper option. Van Tonder said operational efficiencies had also been improved and customer relationships strengthened. He disclosed that over 150,000 members already signed up for the ‘John’s Club’ loyalty programme.
In the bigger picture John Dory’s is still small fry for Spur. Its footprint still pales in comparison to Spur’s 254 stores in SA, while it also lags the company’s other offshoots like Panarotti’s (52 outlets) and Doregos (74 outlets.)
The key, though, is that John Dory’s has much scope for improvement. Now under full control of Spur the business should be able to show a marked operational performance. For instance, in the last financial year John Dory’s managed a trading margin of 52,5%, which is still well behind Spur’s sumptuous 87,4%. In the shorter term, John Dory’s should – considering its seafood fare - be able to shift its trading margin past Panarotti’s 60% margin.
Of course, one also has to wonder how long before Spur seen an opportunity to make John Dory’s follow in Spur and Panarotti’s footseps into Africa and perhaps offshore.