Franchising specialist Taste Holdings – in which Cape Town empowerment group Brimstone Investment Corporation is a major shareholder – is winging its way into the chicken segment.
The company last month announced the R17m acquisition of Zebro’s, which has a mainstay market in the Western Cape.
Zebro’s Chicken is a 15-year old brand with 40 outlets, mainly in the Western and Eastern Cape. By CBN’s count, more than half the current 40 stores are based in the Western Cape – stretching from Cape Town’s northern suburbs as far afield as Knysna, Mossel Bay, Beaufort West and Ceres.
Taste CEO, Carlos Gonzaga, said the Zebro’s ‘pitch’ is that it prepares its products over an open fire similar to a South African ‘braai’ – which offers flavour differentiator in the competitive local chicken market.
“It is arguably the only chain of its size using this preparation method and flavour profile. Honestly, when I first heard of a chain that actually braai’d its product I didn’t think it was possible. Yet, after 15 years and over 40 stores, these guys have built a unique system and preparation method that is
He said Zebro’s targeted mainly the lower income consumers through low prices and large portions, and its core menu consists of chicken on the bone, chicken burgers, Russian-style sausages, fresh-cut chips and assorted salads.
Gonzaga said the limited menu and simple preparation method at Zebro’s meant the lowest set-up costs for new stores in its category as well as simplified
“This makes the brand accessible to a wider audience of franchisees and promotes multiple store ownership.”
The acquisition of Zebro’s complements Taste’s recent acquisition of the Fish & Chip Co, which also appeals to lower income consumers with an affordable menu offering. Gonzaga said Zebro’s would offer potential and existing Taste franchisees another investment opportunity with low start-up costs aimed at the lower income segment.
“There is a significant overlap to Taste’s existing vertical integration capacity in manufacturing and distribution and is complementary to the existing Fish & Chip Co brand.”
Taste also owns Scooters Pizza, St Elmo’s Woodfired Pizza and Maxi’s. Gonzaga reckoned there was significant opportunity for expansion of the brand within South Africa.
“The current footprint does not include any meaningful penetration outside of the Western and Eastern Cape. We envisage accelerated store growth due to Zebro’s similarity to our existing The Fish & Chip Co business, which now comprises over 300 stores.”
He added that Zebro’ operated in a chicken segment that did not compete head on with the current market leaders in terms of product or preparation.“Although the deal is effective from 1 March, 2014 we are already answering calls from potential franchisees.”
Like The Fish & Chip Co deal, the big long-term gains for Taste won’t only come from expanding the Zebro’s footprint.
The quality sustainable profits will be generated by Taste’s food services division, which manufactures all pizza sauces, bastings and table sauces.
This manufacturing, as CBN has reported previously, is done from a SABS HACCP2 accredited facility located in Cape Town. A fast growing Zebro’s will certainly ensure this facility is a lot busier in the years ahead.