Mike’s Kitchen franchise to make a big return to South Africa
in January 2018, US-based private equity firm NRD Capital announced that it had bought the 45-year-old iconic South African family restaurant chain, Mike’s Kitchen.
Who is NRD Capital?
NRD are Franchisee-centric.
While they invest in franchisors, they are franchisee-centric. They are focused on the unit-level profitability of every brand they evaluate, especially for those they invest in. Their mission is to invest in brands that offer superior products/services and compelling unit-level economics in order to help them strategically grow through the power of franchising. NRD Capital believe that when franchisees and franchisors work together as partners, all parties win.
NRD has said that this acquisition and entry into South Africa forms part of a long-term strategy. They plan to buy and develop multiple brands in South Africa and across Africa as a whole. This in turn would create new jobs and business opportunities, through leveraging the power of franchising.
The return of Mike’s Kitchen
Speaking to BusinessTech, Salim Shermohammed, Mike’s Kitchen’s interim CEO and NRD’s representative in Johannesburg said that the US company’s acquisition would see the restaurant return to its former glory.
“Over the past four decades the operation has grown to 67 units, then shrunk down to four and is currently at 17,” he said.
“Our target for 2022 is 47 units. Mike’s Kitchen will continue with an upward trajectory of growth and we are currently getting our house in order.
“Because franchise unit profitability is critical to us, it is essential that we offer all our franchisees the technical, strategic and financial muscle we are known for. If however, our remedial interventions still don’t enjoy the required changes of a profitable unit, we won’t delay the funeral. Franchise unit profitability is critical to us,” he said.
Mike’s Kitchen’s brand and slogan (“It’s family time”) will remain the same but some elements will increase in order to be attractive to the millennial market which will include a new menu which will feature some of the franchises’ firm favourites coupled with some newer dishes.
NRD Capital plans to acquire other South African brands and possibly bring new international brands to South African shores.
“Our fund invests with small to medium-sized franchisors, infuses capital and applies our operating expertise to grow those brands,” Shermohammed said.
“We look at franchise companies not just as financial investments, but as living entities in which concept-founders, management and franchisees have invested substantial amounts of time and resources. Our goal is to use our operational and financial experience to position high quality brands for accelerated but responsible growth.
“We have a long-term view for South Africa and Africa as a continent, we have plans to invest more and continue to reinvest.
“Our efforts here are cross-generational and we are here to stay,” he said.