SPUR CORP. LIMITED INTEGRATED REPORT 2014

Strategy, risks and key performance indicators (“KPIs”)

Strategy

Our vision commits us to making a positive and lasting difference in the lives of our employees, franchisees, communities and the environment. This can only be achieved through running a business that takes a long-term view of sustainability to maximise positive economic, social and environmental impacts. It also requires a strong focus on ensuring effective governance structures and processes are in place.

Our franchisees are a key part of our business for a number of reasons. They are the group’s direct interface with our customers – when they do a good job, our customers leave happy and our franchisees make money. We work closely with our franchisees to ensure that they can build great businesses. This includes:

  • analysing the viability of trading sites;
  • training their employees;
  • helping them implement the correct procedures to operate efficiently; and
  • ensuring they receive the best quality ingredients required to prepare great tasting food.

The group’s ability to deliver value to our stakeholders is directly tied to the success of our franchisees. The majority of group EBITDA comes from franchise fees, which comprise a percentage of franchisee turnover. We receive a margin of around 3% on supplies sold through our distributor. We also earn income from our majority-owned international and local restaurants, sauce and décor manufacturing facilities, décor unit and exports.

Our growth strategy targets organic and acquisitive growth across our brands in South Africa and abroad, which now cover the full economic spectrum. We will also consider opportunities for vertical integration where these help to strengthen our strategic positioning, such as the acquisition of the 30% stake in the Braviz Fine Foods rib processing facility. While we have a strong statement of financial position, we will only make an acquisition where this creates overall shareholder wealth and improves return on equity.

Customer satisfaction is another critical area of focus. We are only as good as our last meal – a bad experience at one of our restaurants can damage the trusted brands we have worked so hard to establish. Our quality assurance function assesses our suppliers constantly to ensure our food is of the highest quality. We provide comprehensive training to our franchisees’ employees and operations management teams monitor restaurant performance closely to ensure excellent service and food preparation.

Ensuring that our procurement procedures favour sustainable suppliers improves the sustainability of our own business. We also take our responsibility to run an environmentally responsible company seriously and this extends to our commitment to influencing our suppliers and sharing information with our customers.

Our vision of being passionate people also drives our approach to social sustainability, including our investments in the communities around us through the Spur Foundation, supporting a healthier lifestyle through our sporting sponsorships, our commitment to Broad-based Black Economic Empowerment and the way in which we interact with our own employees.