Famous Brands Acquires Wimpy UK
A couple of weeks ago, Famous Brands, owners of Wimpy, Steers and other brands in South Africa, announced the acquisition of a 75% shareholding in Wimpy UK; the remaining 25% continue to be held by the Halifax / Bank of Scotland. As a result, Famous Brands, already South Africa’s largest franchisor of fast food operations, now also controls 194 Wimpy outlets spread over England, Scotland and Wales, plus a further 20 operating under a master licence arrangement in Ireland.
What makes this turn of events so interesting is the fact that the owners of the Wimpy brand, which was established in the UK more than 50 years ago, brought the brand to South Africa in 1967. Due to political pressure during the sanctions era, they sold their South African interests during the sanctions era. The brand, which has become one of the best-loved in South Africa, eventually ended up in the Famous Brands stable.
Famous Brands are confident that much of the intellectual property that has been developed in South Africa, and has taken the brand to new heights locally, can be used to revive the brand in the UK where it has become a little tired. Darren Hele, who has been credited with steering Wimpy SA successfully towards becoming a 450-store chain, will move to the UK to take control of operations.
This acquisition can serve as a text book case for rapid foreign expansion at minimal risk. Rather than setting up a master licensee and growing one store at the time, the usual strategy which is expensive and slow, Famous Brands acquired control of an established network. This provides them with the infrastructure needed to expand not only the Wimpy brand but to introduce additional brands from a strong existing platform.