Spur Corp Buys DoRego’s
Spur Corporation has set its sights on DoRego’s, a value oriented take-away chain offering a combination of chicken, seafood and burgers. Announcing the acquisition the corporation said it will be paying R30 million in cash for the fast-food franchise.
In terms of the acquisition, Spur Corporation will acquire the DoRego’s franchise company and the distribution centre operations (including inventory) located in Bloemfontein. The effective date of the transaction is expected to be 1 March 2012.
DoRego’s has 75 outlets, with a strong presence in the Free State, Gauteng and Eastern Cape. Stores are mainly located in regional shopping centres and areas close to busy commuter transport hubs.
Spur Corporation managing director, Pierre van Tonder, said the acquisition of DoRego’s will give Spur Corporation exposure to growth opportunities in the lower to middle income market, an area of significant expansion in the current quick service restaurant market place.
“DoRego’s has a strong brand with solid growth potential in South Africa. We plan to expand the business into a national chain by capitalising on the current brand awareness and extending the footprint into areas such as the Western Cape, KwaZulu-Natal and Mpumalanga,” he said.
“There is no overlap with the existing brands in the Spur portfolio. Our expertise lies in managing franchise restaurant operations. We are planning a phased transition with the current owners to ensure we benefit from their expertise in operating quick service outlets and their knowledge of the brand and target market.”
The first DoRego’s store was opened in the 1970s and the present owners, Gerald and Cedric Brown, bought the franchise company in 2005. In six years the business has grown from 29 to 75 outlets, serving over 5.2 million customers annually.
DoRego’s was named Franchisor of the Year in the 2011 FASA Awards for Excellence in Franchising.