Spur stakes China

By: Lynn Bolin

Cape Town - Listed quick service franchise group Spur Corporation (SUR) is set to become South Africa's first food group in China when it opens its first franchised Spur Steak Ranch in Shanghai in two weeks' time, according to CEO Pierre van Tonder.

Plans were also well underway to open another Spur branch in Fuzhou in November and Nanking in January 2006.

Spur's quick service brands include Spur Steak Ranches, Panarottis Pizza Pasta, and John Dory's Fish & Grill.

Van Tonder said the company had been working hard on the China project for the past 2.5 years.

"Our master franchisee is a Chinese ex-South African who lives in Shanghai now and knows the Spur brand and experience very well," he elaborated.

"He is very committed to the project, and he and his staff have been very well trained to provide the right quality of service, food and surroundings associated with Spur."

Under the group's franchise model, Spur is taking very little risk capital-wise, as it provides the intellectual property base and expertise required, while the master franchisee provides the capital required for start-up, including the premises and stock.

Spur Chairperson Alan Ambor said he believed the group and franchisee had both put in the work required to make the start-up a success, but acknowledged that there were always risks in operating in a culture so different from that of South Africa.

"There are probably lessons to be learned in terms of local conditions and preferences.

"But we hope we can strike the right chord."

Besides entering China, Spur was also likely to venture into the new markets of Saudi Arabia and Dubai in the near term, Van Tonder said.

In both countries they had identified keen, appropriate partners and were currently looking for the best locations.

A further three stores are planned for Australia, where the group already has three Spur and three Panarottis outlets.

African expansion would focus on new stores in Windhoek and Gaborone, he noted, where the strategy was to locate them next to hotels and entertainment centres.

In total, the Spur Group plans to open 25 new stores across its Spur, Panarottis and John Dory Brands in its new 2005-06 financial year, after having opened 23 new stores in the year just ended, of which three were outside South Africa - two Spurs in Wandsworth, UK, and Maputo, Mozambique, and a new Panarottis outlet in Parramatta, Australia.

The company now has 32 international stores, out of its total 287 stores.

Commenting on the company's black economic empowerment (BEE) plans, the CEO said it was currently in discussions with two different parties who seemed on the surface to be "ideally suited" as partners, but further investigations and talks were necessary to determine if this was the case and if there was potential for a transaction to be concluded.