What does it take to build one of the strongest and most well-known franchises in South Africa? Is it mastering the art of consistency, the use of pure beef patties to make ‘real burgers’ served with hand-cut chips and exclusive sauce or the guidance of a strong leadership team? Steers has combined all of these to become the 522-store strong fast food franchise it is today.
Val Bourdos, managing executive, Steers believes the brand’s vision of creating and offering customers the ‘perfect burger’ is what has made it so successful over the years. She says Steers has always stayed true to its unique taste and maintained a unique selling proposition. For the last 15 years, Steers has won the award for the best burgers and for the last 13 years, the best chips in Johannesburg.
Apart from that, Bourdos says that Steers’ leadership team are good brand custodians and understand branding. ìWe have had some odd requests in the past for things like hot dogs, but the brand has stayed focused. We have to sacrifice some things, but we can’t be all things to everybody.î With marketing and operations expertise the team has seen the growth and development of the brand, she adds.
Where it All Started
With a vision to start a family run business that would outlast the family, Steers founder, George Halamandaris introduced the first steakhouse concept to South Africa after spending five years in the US identifying new ways of serving food. In 1957, Seven Steer was registered as a private company, followed by the registration of Black Steer and Steers in the early 60s.
The first ever Steers store was opened in 1970 by George’s son, John Halamandaris, in Jeppe, Johannesburg. John later joined forces with his four cousins, Panagiotis, Theofanis, Periklis and Charalambous Halamandaris. The early 80s saw the opening of a fourth Steers in Sandton City, which attracted interest from would-be franchisees. The other stores included Yeoville and Bellevue with a central kitchen in Johannesburg.
In 1983, Steers launched a new franchise programme. The owners placed a single advertisement in a local newspaper inviting franchisees to apply, and since then Steers has never had a shortage of prospective franchisees seeking to buy into the franchise. Within two years there were more than 15 outlets opened, and this number grew to 250 stores ten years later. By the end of the 90s Steers started expanding beyond South Africa’s borders, with outlets in Swaziland, Botswana, Zimbabwe, Kenya, Mauritius, Zambia, Tanzania and Ivory Coast.
Steers Holdings listed on the stock exchange in 1994, but in 2001 Steers Holdings changed its name to Famous Brands to more accurately reflect the diversity of the group’s brand portfolio, although Steers remained the icon brand within the group.
The Franchise ‘Marriage’
ìA profitable and happy franchisee makes a profitable and happy franchisor,î says Bourdos, explaining that this is a philosophy at Steers. She attributes the strength of Steers’ growth to its franchising model. Believing in the potential franchising offers, Bourdos says it is a true partnership. ìThe franchisor conceptualises the brand while the franchisee sets up, manages and runs the store. If they don’t work in sync the company won’t be successful. The partners are interdependent.î She adds that there is a need to respect each other’s roles.
Bourdos says franchising is ideal for someone who wants a business opportunity that they don’t have to think through themselves. ìWith franchising the formula is already outlined for you.î She says it allows the young entrepreneur to invest in a business when they can’t do it alone. ìThe cost of entry is lower and there is lower risk. In the food game, it is a great model if run properly,î she explains.
Steers is 100% franchised, so there are no company-owned stores in the group. Bourdos explains that Steers believes franchised stores are more successful. ìIt’s the best formula because we could never run the stores as well as franchisees do.î An owner operator, says Bourdos, looks after their investment. ìUnlike in the corporate world, you can’t just send out an instruction, you actually have to convince the franchisee of a new plan. They have invested their money in the business, so their commitment is far greater,î she explains.
Becoming a Franchisee
If you are interested in partnering with Steers by becoming a franchisee, you need business acumen and the willingness to put some time and thought into your application. Steers has a specific process for prospective franchisees that starts with filling out an application available from the Steers website. Applicants are required to submit their personal details along with a business plan of about two to three pages. The business plan, explains Bourdos, communicates the franchisee’s objective. They need to explain what they plan to do if they do get a store.
This process separates the serious prospects from those who are just browsing. Bourdos says Steers often receives enquiries from prospective franchisees who want to know more about buying a franchise, but she says many of them don’t actually go through the application process.
Once the application is processed, the prospective franchisee is interviewed. Bourdos says the perception that franchisees need to have previous experience in the food industry is not true. ìOur franchisees include ex-headmasters, corporate executives and really experienced professionals who are fed up with corporate life.
She says Steers looks for entrepreneurs who can work independently and know the responsibilities involved in running their own business. During the interview they will be assessed to determine whether or not they possess good business acumen and relate to the brand. Steers also looks at interpersonal skills to assess whether or not a candidate is a ‘Steers person’ who will fit into the culture. ìWe generally find the right people, but sometimes we do make mistakes.
According to Bourdos, Steers engages with black entrepreneurs as a priority. Up to 25% of our franchisee network comprises black entrepreneurs, and we are very proud of this,î she adds.
Improving the Chance of Success
To give prospective franchisees a good indication of what it takes to own a Steers franchise, full training has to be completed before the franchise agreement is signed. This, explains Bourdos, exposes them to the long hours and lets them get their hands dirty. ìThey really have to love the brand, she quips.
Steers insists that its franchises are owner operated, but Bourdos says that at the same time it is possible for multiple-store owners to employ managers. ìThe success rate of a franchise is higher if the owner is involved in the business. They don’t perform as well if this is not the case.
Training for new franchisees is very detailed, says Bourdos. She explains that franchisees go through the Famous Brands training institute which trains franchisees for all the brands. Here they receive training on financial, safety, hygiene, first aid, customer service and labour relations, which takes a full week. From here franchisees receive specific Steers training which involves actual practical experience in a Steers store. Bourdos says they learn everything about operating a store, including working the cash desk, making burgers, packaging, stock control and point of sale training. A franchisee cannot open unless they have been trained, she adds.
The Right Location, the Right Franchisee
Steers receives applications both from franchisees who are interested in a new location for a Steers outlet and those who want to buy existing franchises. According to Bourdos about 15 to 20 new stores are opened every year.
We always advise applicants that the opportunity for them to enter is mainly through change of hand.î Steers franchises change ownership on about 30 to 35 outlets in a year. Post recession, Bourdos says there was an increase in the number of franchises being sold as the existing owners couldn’t afford to run their businesses. ìWhat we usually see is that when a store isn’t performing well the franchisee is distanced from the business. When a new owner comes in, the business improves, she adds.
When we get an application we won’t talk about plans for a site, but rather focus on the business. When a new site is available we will check our database for applicants who are in that area,î explains Bourdos. If an applicant highlights an available site, she says that they are not guaranteed that they will be the franchisee of that site if they are not the right profile, but there have been cases where the franchisees fitted.
Bourdos says that there are multiple owners of Steers franchises. Interested franchisees are given a second store if they have a good success rate.
Finding What Works
To strengthen the franchisor/franchisee relationship, Steers has a franchise council with a representative from each region. The council is useful for the franchisor to bounce decisions off of and either get endorsement on a decision or feedback from the franchisees who have insight into the operations of the outlets.
Bourdos explains that Steers works with the council and relooks the menu on a biannual basis. We look at what is selling well,î she says. Within its network, there are 70 Halaal stores which only differ from other stores in that they don’t feature any pork on their menus and all product must be Halaal.
Bourdos explains that a few years ago franchisees were given the option to drop fried chicken, sandwiches and breakfasts from their menus as these weren’t ideal. Some of the transient outlets (those located on the national highways) opted to keep these items as they did work in these locations. She says that these two factors could see some differences in the menus offered at stores, but that on the whole the Steers menu was quite consistent, with the main focus being on burgers.
One of the major challenges Steers faced in the past was when the economy was down it saw a drop in sales in some areas. Bourdos says there was a need to look at how to manage this. The franchisor had to advise on what to do. Where stores’ profitability was being impacted, the franchisor stepped in to study the business and identify where cost savings could be achieved.
The Quest for the Perfect Burger
Steers continuously runs thorough training programmes for its staff, including special sessions on the back of house, front of house and what is called ‘hot shots training’ which is when someone is trained up to be a trainer in their outlet. Various campaigns are also run to constantly improve operations. For example, a specialist on staff communication will be called in to assist managers in communicating with their staff.
Each year, Bourdos says, there is a specific focus on one aspect of the business. This year the focus is on creating the perfect burger. Training has been centred on how to grill the perfect patty. The aim is to refresh the skills and knowledge of those preparing the patties. Furthermore, there is also a drive to upsell. Bourdos says staff are encouraged to upsell customers by asking if they would like additional cheese or beverages with their orders.
Steers’ marketing efforts position the brand in line with this vision. Bourdos explains that everything is about creating desire for the perfect burger. The brand is aiming to make its marketing messages real and local.
The rebirth of the ‘Real Burger’
For the fifth time in its 50 year history, Steers is rebranding. In the early 60s the brand had a cowboy theme making use of a lot of leather. Since then the brand has gone through various phases, including the introduction of a brighter orange and purple in the 80s. The brand has continued to evolve throughout the years, but the new look and positioning of the brand is “really revolutionary” says Bourdos. The focus has been totally shifted to the product – ‘Real Burgers’. The pay-off line has changed from ‘Real food, made real good’ to ‘Real Burgers’ to signify this shift.
All newly-built Steers franchises, of which Rosebank was the first, will feature exposed kitchens allowing customers to watch their food being grilled. Bourdos says that creates transparency as well as allowing for more interaction with staff. A number of new standards have been introduced to encourage this, including a hand cleaning routine which happens every 30 minutes. Staff need to spray their hands with disinfectant, clap their hands and then call out “hands clean.”
New-look drive-throughs will also be introduced, and are a totally new take on the drive-through concept. Large glass windows will make it possible for customers to watch their food being prepared.
With the aim of appealing to a more youthful market, the purple used in the Steers branding has been toned down and a more neutral palette introduced. The flame behind the Steers name has also changed to be more of a graphic representation of a flame.
According to Bourdos, the new look was developed responsibly to keep the costs down for franchisees. She says franchisees also have options to lower their revamp costs. For example, if their current floor is still in good condition, they can leave it as is. They can also keep their old tables and chairs, just changing the tops to the new materials.
Making the Changes
Bourdos says it will take between five and seven years for the brand to change the entire network as not all the franchises can change at the same time. Some franchisees, says Bourdos have asked to revamp their outlets before the stipulated time in their agreements.
Buying a franchise
Depending on the size of a site, franchisees can expect to pay from R1,1 million (excluding VAT). There is also a joining fee of R123 500 which needs to be paid immediately. The joining fee covers the cost of training, the drawing up of plans and access to a project manager to set up the store. If a franchisee is buying an existing store this fee will be lower.
To invest in a Steers franchise, you will need at least 50% of the investment to be your own money, while the remaining 50% can be financed. Steers has a relationship with local banks and can facilitate finance for franchisees.
6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up
Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.
- Player: Appanna Ganapathy
- Company: ART Technologies and ART Call Management
- Launched: 2016
- Visit: art-technologies.co.za; art-callmanagement.co.za
Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”
Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.
“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.
Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.
1. You don’t just need a product – you need clients as well
Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.
“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”
So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.
“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”
2. Price and solution go hand-in-hand
As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.
In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.
“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”
The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”
It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.
“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”
Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.
“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”
It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.
“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”
3. Get as much on-the-ground experience as you can
The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.
“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”
Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”
4. Stay focused
Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.
“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”
“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”
Appanna chose his partners carefully with this goal in mind.
“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.
“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.
“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”
5. Reputation, network and experience count
Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.
Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.
“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”
Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.
His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”
Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”
One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”
“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”
Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.
6. Start smart and start lean
Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.
Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.
First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.
Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.
“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.
“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.
The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”
Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.
“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”
From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”
Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)
All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.
Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.
“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.
Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:
30 Top Influential SA Business Leaders
Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.
Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:
- “As we look ahead, leaders will be those who empower others.” – Bill Gates
- “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
- “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs
Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.
- Zareef Minty
- Roger Boniface
- Khanyi Dhlomo
- Zuko Tisani
- Phuti Mahanyele
- Nunu Ntshingila
- Dr. Judy Dlamini
- Tshego Sefolo and Londeka Shezi
- Nonkululeko Gobodo
- Dudu Msomi
- Sibongile Sambo
- Ian Fuhr
- Esna Colyn
- Ryan Bacher
- Nicky Newton-King
- Adrian Gore
- Terry Volkwyn
- Richard Maponya
- Sisa Ngebulana
- Wendy Luhabe
- Polo Leteka
- Vusi Thembekwayo
- Marnus Broodryk
- Thuli Madonsela
- Lebo Gunguluza
- Dawn Nathan-Jones
- Nicholas Bell
- Ran Neu-Ner and Gil Oved
- Vinny Lingham
- Patrice Motsepe
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