Press release

Spur Group helps drive new forum for food franchises

September 26, 2018


A newly established forum representing food franchisees in South Africa promises to become a strong lobbying platform that will strive to find solutions for regulatory issues in the food sector and raise awareness about challenges affecting the indus

The Food Franchise Forum (FFF) was established earlier this year by the Franchise Association of South Africa (FASA) to represent household names in the casual dining and quick service restaurants (CDQSR) sector.

As one of the driving forces behind the Food Forum, Spur Corporation’s Legal and Compliance Officer Nazrana Hawa has considerable knowledge and experience of the regulatory and legal challenges that franchisees in the food sector face. Nazrana was elected Chairperson of the Food Forum after the Spur Group spearheaded the initiative under the auspices of FASA.

“We wanted to be representative of the food franchise sector rather than the entire restaurant industry,” Nazrana explains. “By focusing on the franchises we represent a significant portion of the industry. Spur Group alone represents about 600 restaurants (including Panarottis Pizza Pasta, John Dory’s, Hussar Grill, Nikos, Casa Bella and RocoMamas).”

According to 2017 FASA research, South Africa has 845 franchise systems which together contributed R587 billion to the country’s overall GDP, the largest part of which came from the fast food and restaurant sector – a staggering 25%.

Over the past few years a lot of regulation has impacted on the food industry, Nazrana says. “We’ve realized that approaching government as individual silos is not effective. The government has also been saying they don’t have the capacity to engage one-on-one with individual companies. Unless our industry comes together on a topic and speaks with a united voice, we can’t communicate effectively with the government about legislation that affects us all.”

While FASA will continue to represent the interests of franchisors across a variety of business sectors, including the restaurant sector, the FASA Food Franchise Forum will represent the sector-specific and clearly-defined interests of the CDQSR sector only.

Spur Group has a very proactive approach, Nazrana says, and instead of “reinventing the wheel every time an issue comes up” the company aims to collaborate with stakeholders to the long-term benefit of all. The Food Forum is bound by its own code of ethics for the franchise food sector and a unique charter. In the long term, the FFF aims to establish its own office and staff.

Bringing all role players together also opens the door to self-regulation, something Nazrana feels strongly about. “Our members will have to comply with the Consumer Protection Act as well as FASA’s Code of Conduct. The franchise industry has been plagued by a few rotten apples in the past, and by creating an organization for food franchisors that are ethical and conduct business in accordance with the law, we hope to raise the trust and credibility of our industry. We want to set ourselves apart so the public knows if a franchise has a FASA badge it is a reputable company. If you’re an entrepreneur, you need to know you’re not investing your money in an unscrupulous enterprise that is not going to deliver.”

Nazrana jokes about the long “laundry list” of issues she brought to the first meeting of the FFF, but she is very serious about addressing challenges in the franchise sector such as food safety, labour issues, and regulations for food and liquor licenses and tax laws that may affect the sector.

One of the most pressing issues on the FFF’s agenda in the next year will be addressing unsustainable rental costs. “It’s not that we want to set any limits, but we think there is a disconnect between corporate and commercial landlords and what is actually happening on a franchise level. Landlords are often charging rent that is not commensurate to the turnover of some of the stores. We can’t go out there and dictate rental terms, but what we can do is go to these landlords and say ‘look, our industry is suffering, can we find a solution?’”

The success of the FFF will depend on getting all the major players in the sector on board and Nazrana is thrilled that most of the big names have already joined: KFC, Nando’s, Taste Holdings, Fournews, Hot Dog Cafe, Barcelos, Pizza Perfect, Adega, Mike’s Kitchen, King Pie, Jimmy’s Killer Brands, Chicken Xpress, Kauai and OBC Chicken & Meat have joined the FFF and Famous Brands, as well as Ocean Basket, have shown interest.

“We will continue to engage all stakeholders so that the FFF can establish itself as a credible representative body mandated to speak on behalf of the whole sector,” Nazrana says.

* For more information, contact Moshe Apleni

Tel: 021 555 5100