Burgers are King and South Africans are licking their lips!
The news of Burger King’s entry into South Africa on Thursday was the hottest topic over the weekend. The US-based giant Burger King is due to open its first outlet in Cape Town early next year.
“From the South African economy and job creation it is exciting news”, says Eric Parker – Franchising Plus, “however it is not going to be easy for Burger King because:
i.Chicken is the chosen meal in South Africa
ii.Both Spur and Steers already ‘flame grill’ burgers in South Africa, so the flavour is not new”
Burger King will be competing with McDonald’s, Spur and the Famous Brands-owned Wimpy and Steers in the sector.
Burger King’s announcement comes after 18 months of negotiations with JSE-listed Grand Parade Investments subsidiary, Utish Investments. Their joint venture gives Grand Parade exclusive rights to open restaurants throughout South Africa, but it is not known whether these rights extend elsewhere in Africa. Grand Parade is mostly involved in gaming and leisure.
Burger King said, in addition to South Africa, it is committed to expansion in high-growth emerging markets, including Brazil, China, Turkey, the Middle East, India and other countries where it believes its penetration is low, relative to its potential.
Burger King’s entry beat rival Wendy’s to the punch. Wendy’s, the world’s third-largest quick-service hamburger company, has confirmed that it is “evaluating” the possibilities of entering the South African market. The group’s spokesman, Bob Bertini, said Wendy’s has been in discussions with potential business partners but would not reveal names.
“We must note that some time back Wendy’s entered the South African market and failed” says Parker.
Wendy’s is “actively working to expand its global footprint”, said Bertini.
Burger King and Wendy’s lag well behind McDonald’s global presence. The latter entered SA’s fast-food market in 1995 and now operates 161 restaurants in the country.
Finding an appropriate franchisee has been the biggest challenge for Burger King. Some 90% of its network is operated through such a model. The group now believes it has found the right partner to ensure its brand is well positioned to succeed in the fast-growing and under-penetrated quick-service restaurant market.