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Ramaphosa & McDonald's

Cyril Ramaphosa has become McDonald’s big cheese

Fast-food chain McDonald’s Corporation has appointed Shanduka Group chairman Cyril Ramaphosa as new developmental licensee for SA, and he will be responsible for the operation of McDonald’s restaurants in SA.

McDonald’s said Ramaphosa was a businessman familiar with local dynamics and market conditions and would have a 20-year master franchise agreement with it. He would use his own capital and resources, including some financial backing from his Shanduka Group, to continue to build the McDonald’s brand, grow the SA business and optimise results.

Shanduka is an investment group whose portfolio ranges from resources and industrial energy to financial services and beverages, including bottling Coca-Cola, among other sectors.

“We are excited about the new relationship between McDonald’s and Cyril Ramaphosa,” said Dave Murphy, division president for McDonalds Asia-Pacific, Middle East and Africa. “We’re confident this structure will help us better serve our valued customers in SA. The market is award-winning within the McDonald’s system and has consistently produced positive results. Ramaphosa is the right person to continue that business momentum, and McDonald’s is committed to providing our ongoing support to this new venture.”

More than 50 of McDonald’s 117 markets operate under the developmental licensee model, which has existed for more than 20 years. Unlike a conventional McDonald’s franchisee, the developmental licensee owns all the assets in the market, which includes owning and/or leasing the real estate – restaurants and office buildings. There is no visible change in the operation of the restaurants to customers.

“It is an honour for me to have been awarded the developmental licence for the McDonald’s SA business,” said Ramaphosa. “We will focus on satisfying our customers, developing our people and maximising business opportunities. This relationship will have a positive impact on jobs, shareholders and ultimately McDonald’s customers.”

The value of the deal, though, was not disclosed, with speculation running from R600m to R1,2bn.

McDonald’s SA operates in all nine provinces in the country and consists of 145 restaurants – 60% owned and operated by franchisees. McDonald’s and its franchisees together employ more than 7 500 people.

“We will be spreading our wings quite aggressively in the next few years, with rapid urbanisation counting in our favour,” said Murphy, “We’re confident this structure will help us better serve our valued customers in SA.

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