Nicola Mawson|Published
Famous Brands, the owner of Steers, Wimpy, Debonairs Pizza and Fishaways, opened 40 new restaurants in South Africa during the six months to August, despite continued pressure on consumers’ disposable income.
The JSE-listed restaurant franchisor also revamped 66 existing outlets and converted two restaurants, while closing 13 during the period.
The expansion comes as South African consumers remain cautious about discretionary spending, with rising living costs affecting how frequently households eat out.
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In its interim results released on Wednesday, Famous Brands says affordability is no longer the only consideration influencing consumers’ restaurant choices.
“Value is no longer simply about price; it is about making every rand count. Convenience, accessibility and proximity are also increasingly important considerations in delivering value.”
The company is responding by expanding its network of smaller restaurant formats and drive-thrus, catering to customers looking for convenient takeaway and collection options.
Four new drive-thrus opened during the reporting period, bringing the group’s drive-thru footprint to 81.
Its delivery network is also growing, with 14 additional delivery hubs taking the total to 87 across South Africa and Botswana.
Fast food holds its ground
Famous Brands’ Leading Brands division, which includes its mainstream quick-service and casual dining restaurants, accounted for 36 of the new South African openings.
The division recorded a 2.7% increase in system-wide sales, while like-for-like sales at existing restaurants rose by a more modest 0.8%.
Revenue increased by 2.5% to R508 million, while operating profit edged up to R241 million from R238 million.
The company says trading conditions remain challenging for both quick-service and sit-down restaurants, although performance across the two categories was relatively balanced.
Its broader South African restaurant business recorded a 2.2% increase in system-wide sales, with like-for-like growth of just 0.6%.
Despite the subdued growth at existing restaurants, franchise partners continued investing in new outlets and refurbishments.
Famous Brands operates 3,070 restaurants across 21 countries, including 2,723 in South Africa.
Upmarket restaurants struggle
The group’s Signature Brands portfolio, which includes PAUL, tashas, Mythos and Turn ‘n Tender, has endured a more difficult six months.
Although four new Signature Brands restaurants opened in South Africa, six closed, and three were revamped.
Revenue declined by 8.4% to R95 million, while the division’s operating loss widened to R9 million from R7 million.
Like-for-like sales fell by 0.9%, while system-wide sales dropped 5.1%.
Famous Brands identifies PAUL, the French bakery and restaurant brand it operates under licence in South Africa, as the main contributor to the portfolio’s weaker performance.
The company says it has no obligation to continue opening PAUL restaurants, giving it greater flexibility to restructure the business.
Management has introduced changes, including restaurant closures, cost reductions and management restructuring, with the benefits expected to become more evident in its full-year 2027 results.
Closures beyond South Africa
Outside the country, Famous Brands has withdrawn completely from the United Arab Emirates, closing its remaining restaurants following operational and performance difficulties involving a franchise partner.
In Botswana, system-wide restaurant sales declined by 14.8%, while like-for-like sales fell by 13.5%, reflecting weak consumer demand amid difficulties in the country’s diamond industry.
The company also closed four restaurants in the United Kingdom, where weak economic conditions continue to affect spending on eating out.
Across the group, revenue increased by 2.3% to R4.34 billion for the six months, but operating profit declined by 4.7% to R375 million.
Famous Brands says it remains committed to expanding its restaurant network, supported by a pipeline of planned openings and continued investment by franchise partners.
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