30 Nov 2015 Big ambitions for Chesa Nyama fast food franchise

Chesa Nyama is one of South Africa’s fast growing fast food franchises, and now its owners, Gold Brands Investment, has announced that it will list on the JSE AltX, making it the only fast food retail company on the alternative exchange.

Founded as Franchising to Africa in 2012, the company established its flagship brand, Chesa Nyama, with its first store at Wits University in 2012. It has grown to about 289 stores since then and is forecast to have 320 stores at end of February 2016.

Gold Brands’ Investments portfolio also includes One plus One Pizza, Chicken Wild Wings, Pitaland and the original Blacksteer, the original steakhouse brand.

The vertically integrated business model is similar in concept to larger peers Famous Brands and Taste Holdings. The company has its own food services distribution, in-house butchery and sauce manufacturing facilities, which should help it to contain its supply chain costs.

A Chesa Nyama franchise costs an affordable R500 000, which is key to its high penetration and rapid roll-out, says Praxia Nathanael, CEO of Gold Brands Investments. Affordability for entrepreneurs is also enhanced by a franchise model which has a fixed monthly royalty fee in contrast to the standard percentage of turnover model.

“Our goal is to the be leading franchise company in South Africa and international markets,” says Nathanael.

According to Statistics SA, South Africa’s food and beverages industry is holding up better than many others in the economy, as both local and global companies continue to increase investment. Total income from the food and beverages industry increased by 9.2% to R4bn in September 2015 compared with September last year, following an 8.2% increase in August.

The increases were driven by food and beverage sales at takeaway and fast-food outlets, and restaurants and coffee shops, showing that despite tough economic conditions that the industry has significant resilience.

Source: MoneyWeb.co.za