16 September 2013
South African food service group Famous Brands has acquired a 49% stake in Nigerian company UAC Restaurants (UACR), whose flagship Mr Bigg’s brand is Africa’s largest food franchise outside of South Africa.
Famous Brands announced the deal with UACR parent company UAC of Nigeria on Monday, without disclosing the amount involved.
UACR owns 165 franchised restaurants across Nigeria, 57 of which are in Lagos and 14 in Abuja. The company also has a small logistics and manufacturing component.
Mr Bigg’s quick-service restaurants boast an extensive product offering ranging from pastries and other snacks to burgers and hot meals, and a huge loyal customer base – around 100 000 customers visit the brand’s restaurants daily.
“Whilst we have traded in Nigeria for the past 11 years through a combination of master license and franchise agreements, this transaction catapults us to a completely different level, enabling us to meaningfully expand our presence in this burgeoning, currently low consumption per capita organised food service market,” Famous Brands chief executive Kevin Hedderwick said in a statement.
“It also underlines our ambitious and deliberate plans to grow our business outside of South Africa.”
The joint venture delivers compelling benefits for both parties, Hedderwick said, with UACR bringing to it a formidable brand, local expertise and existing franchisees, as well as a nationwide distribution network and Lagos-based manufacturing infrastructure.
“In exchange, Famous Brands will add value to the business through our expertise in managing intellectual property, growing brands and optimising supply chain operations and efficiencies.”
UAC Group CEO Larry Ettah said Nigeria was an attractive destination for quick-service restaurants, with robust economic growth pushing up income levels and a youthful middle class expected to increase to 35% of the population in 2015 compared to 30% in 2009.
Continued political and macro-economic stability, coupled with growth-friendly policies, had resulted in an increasingly supportive business environment, Ettah said.
“In addition, the country continues to experience an improvement in efficiency, particularly in the distribution and manufacturing sectors. This is attracting positive interest from foreign investors with a long-term view of the opportunities.”