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Here’s Why Ethiopia Is Pizza Hut’s Latest Investment

While it hasn’t been on many franchise’s radars as a fast food destination, Ethiopia is quietly becoming an attractive investment for major restaurant chains.

Diana Albertyn

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Ethiopia Pizza Hut

Ethiopia is getting a slice of international fare as Pizza Hut becomes the one of the first major restaurant chains to set up shop in Africa’s second most-populous country. This will bring Pizza Hut’s African footprint up to almost 200.

“Let’s be prudent because in Africa there may be some levels of instability and also when you are opening some routes that take time,” Ewan Davenport, General Manager of Pizza Hut Africa, says.

“But the sky is the limit. At the moment, we are looking at opening at least 50 stores a year.”

Like Davenport says, it’s not the easiest market to crack, so why Ethiopia?

Related: Should You Purchase An Existing Franchise?

It’s set to become a lower-middle income country by 2025

Ethiopia’s economy is expected to grow second-fastest in sub-Saharan Africa after the Ivory Coast’s. The International Monetary Fund (IMF) forecasts a 7.5% increase in the nation’s economy.

The advent of Ethiopia edging closer to becoming an industrialised nation, and this new-found spending power of its almost 100 million residents is beginning to attract international brand-name multinational companies.

Neighbouring Pizza Hut franchises are already doing well

With outlets in Angola, Djibouti and Ghana looking good, Togo is another consideration in addition to Ethiopia.

A top-performing Pizza Hut location will have “well in excess” of 1000 weekly transactions, says Davenport. Their target is 2200 transactions per week, adding up to an estimated USD1.1 million a year, from each outlet.

The perfect partnership was established

Yum! – Pizza Hut’s Kentucky-based parent company – has always had its eye on Ethiopia, for the above reasons, but local company, Belayab Enterprises PLC was the ideal partner to get the ball rolling.

Related: Owning A Franchise – Good Idea Or Bad Idea?

“It’s still at that explore stage, to find the right partner, to see if the business model will work,” said Bruce Layzell, Yum’s general manager of new African markets back in 2014.

Three years later, the partnership with Belayab has been signed and sealed and the deal sees three restaurants operational within the next six months and another seven over the next three years, bringing Pizza Hut’s Ethiopian footprint to ten by 2020.

Diana completed a BA in Journalism in 2010 and has honed her skills as a newspaper reporter, senior communications specialist and most recently worked at a weekly magazine as a writer. She joined the EMTS Group in 2016 as a writer for Entrepreneur magazine and SmartCompany Networks. Passionate about honing her writing skills and delivering exceptional client results, Diana continues to keep a finger on the pulse of industry news and insights.

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Nando’s Adopts Technology; Focuses On Food & Funny

Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector.

Entrepreneur

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Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector. As the name suggests, the expectation is that both the food and service are delivered quickly, and at a standardised (high) level of quality. 

Modern customers require modern restaurants. As smart technology becomes the norm, diners expect reliable, high-speed networks and communications solutions, especially in the fast-food environment. These contemporary restaurants must, therefore, offer reliable POS systems and dependable back-office administrative support. In order to deliver on these requirements, a stable network is required.

“For Nando’s, downtime means an unreliable Point-of-Sale (POS), lost revenue and a frustrated customer base,” advises Sugan Ganasen, Cradlepoint Lead: Ingram Micro Southern Africa. The beloved fast-food franchise started in 1987, with the first restaurant opening in Rosettenville, Johannesburg.

“With a broad footprint of over 1 000 franchises across the globe, and 259 branches in South Africa alone, sending customers away because the POS isn’t working simply isn’t an option.”

Related: (Watch) Why Nando’s Is Clucking Its Way To The Top

According to Stephen Brookstein, Nando’s Head of Technology: South Africa and EMEA; “Nando’s is 30 years young, and facing the same challenges as all business in the local market. Stability is the key to offering customers a better experience, and this requires an integration of technology.”

In South Africa, the pace of work is at an all-time high. In the food and beverage industry, this means that downtime results in exponential losses, and reputational damage that may hinder relationships with a fickle consumer base. Whenever connectivity is interrupted, credit/cheque card payments cannot be accepted, and off-line card payments are particularly susceptible to fraud. With no secondary line for a failover connection, the required constant connection cannot be achieved.

“Customers expect to be able to make a card payment on a secure POS system, and our franchisees expect a constant connection. In a digital age, everything relies on internet access, and constant uptime must be achieved to deliver both productivity and profitability,” says John Sikiotis, Chief Strategy Officer and CFO: India, Middle East and Africa at Nando’s.

“As such, our business needs include full failover capability, centrally managed software, improved response to communication issues experienced at restaurant level, enhanced security and PCI compliance – all delivered in a scalable manner across the continent.”

After much market research and a comparison of the solutions available, Nando’s deployed Cradlepoint’s AER2100 and NetCloud Manager, supported by Infoprotect. This delivered reliable 99 percent uptime across all Nando’s restaurants in South Africa, guaranteeing that sales are never lost and customers are always satisfied.

“Nando’s selected a countrywide store advanced offering, which ensures that each store is fitted with a Cradlepoint AER2100,” confirms Ganasan. This solution is a new generation, cloud-managed 3G networking device that helps Nando’s to increase bandwidth and achieve four-nines reliability in a secure, flexible, and open-architecture platform. The AER2100 operates as the primary connection, with a cellular modem and dual sim capability.

Implemented by Infoprotect, offering managed IT solutions, data usage is centrally managed, monitored and controlled using the NetCloud Manager (Enterprise Cloud Manager). “This enables Nando’s to deploy and dynamically manage networks at geographically-distributed stores and branch locations, improving productivity, reducing costs and enhancing the intelligence of the network and business operations,” advises Brad Fraser, Infoprotect’s CEO.

Related: Show Me The Funny

This monitors ADSL data usage and adds valuable business resiliency. According to Sikiotis; “The NetCloud Manager allows Infoprotect to perform remote diagnostics, upgrade firmware, and configure devices remotely. This means our restaurants enjoy better return on investment with optimised data usage, real-time monitoring, load-balancing and proactive usage alerts.”

The result is a scalable solution offering effective uptime, a primary and secondary network ensuring a constant connection, uninterrupted card transactions, constant uptime, data usage management, PCI compliance and security, automated support, configuration and monitoring, and sophisticated scalability. 

“These solutions were impeccably implemented within tight timelines, and have created a future upgrade path, ensuring minimal disruptions. The benefits offered speak for themselves,” concludes Sikiotis. “The cost-efficiencies realised include less downtime, more satisfied customers and less data breeches. Customers are satisfied and no sales losses are experienced due to offline POS systems. With this in mind, a reliable network and constant uptime offer a real cost saving solution.”

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Key Insights From The 2017 FNB Franchising Leadership Summit

South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

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South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

Themed “exponential growth”, the Summit coincides with the world-wide commemoration of Global Entrepreneurship Week (GEW), which celebrates the remarkable contribution of entrepreneurs to the global economy. The 2017 Summit focused on unpacking four perspectives of exponential growth, namely: entrepreneurship, brand, employment and personal growth.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

Mike Vacy-Lyle, CEO of FNB Business, says, “The franchising sector has some great examples of businesses demonstrating exponential growth like the success story of unique local brands such as RocoMamas. The franchising sector is remarkably resilient and should be celebrated, hence we felt it was important to use Global Entrepreneurship Week to highlight the contribution of this sector to our economy.”

“As a bank which values the role of entrepreneurs, we are delighted to have provided a platform to the people leading some of South Africa’s world-class franchises to relay their first-hand account of what it takes to build a successful business,” adds Vacy Lyle.

Among the key insights that were shared at the Summit was the need for businesses to deeply understand customer needs and to consistently differentiate themselves. Brian Altriche, Founder of RocoMamas shed light on building honest brands.

“People know when something is a fake; you can push it to them for a while but in the end they catch on. In today’s world, brands need to be built on the premise that I am offering what you expect to receive when you read my communication and this is the main thing with digital. The consumer is the one that drives the conversation and people do not complain for the sake of it. Therefore, brands that meet the consumer’s expectations are the ones that will continue to win.”

Related: 3 Factors To Focus On When Opening Your First Franchise

Gerry Thomas, Managing Director for Krispy Kreme South Africa is of the view that franchises grow exponentially because they have a key market differentiator as a driving force. Furthermore, Thomas believes that winning business formulas create a “need” as opposed to a “want”.

“Exponential franchises are constantly looking for new concepts and innovative ways to make things faster, easier and better. These businesses are not scared to take risks and break with old traditional ways of doing things. Businesses that are embracing this way of thinking will always be miles ahead. We are excited with the incredible success of this year’s Summit and are looking forward to continued involvement by FNB Business in helping to grow this important sector,” concludes Vacy-Lyle.

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The Rise Of Women In Franchising

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

Entrepreneur

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Morne Cronje

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

According to the international Franchise Association (IFA) there are more than 25% of women operating franchises in the world and that doesn’t include another 17% of the population where men and women operate franchises together as partners.

Morne Cronje, Head of Franchising at FNB Business says, “Women have the ability to use their time, energy and resources effectively to meet and achieve business goals. This trait, in my view, is the cornerstone for successful women in franchising.  In a country like South Africa, the growing involvement of women in franchising is vital, considering that women make up the majority of our population.”

Related: Women March Ahead In Franchising

Cronje shares four successful franchise industries that women are dominating in:

  • Education – More women are attracted to this space because they are not only looking for profits but a community and economic impact. 
  • Slimming salons – Women-led franchises in this space tend to specialise in weight loss products and services. Currently, there are good business opportunities in this component of the health sector as more people are becoming health conscious.
  • Accessory and arts – Designing and selling jewelry such as brooches, rings, necklaces, earrings, and bracelets. More women are starting to become thought leaders in this business, setting trends and staying ahead of popular accessories.
  • Beauty salons & Nail bars – This is one of the industries pioneered by women, with its main focus being hairdressing, make-up, cosmetic treatments, manicures, pedicures and nail enhancements. Interestingly men are also increasingly making use of these services.

Despite the limited awareness about the important role and great strides that women continue to make in franchising, it’s important for more women to consider exploring opportunities in this sector since it’s one of the most resilient.

Related: The 5 Secrets Of Business Success

The success rate of a franchise business is far better than a traditional start-up or small business. Consequently, franchising is one of the few industries in South Africa that are showing steady contribution to the economy and employment.

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