Famous Brands: the pain never ends

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Famous Brands: the pain never ends

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Published Date: 2021-07-15 | Source: INCE|Community | Author: The Finance Ghost

Famous Brands: the pain never ends

Spare a thought for Famous Brands. The restaurant industry has had the most horrific 18 months imaginable. After all that and amidst yet another set of lockdown restrictions, we now have looting.

Remember, Famous Brands is a franchise business. Your local Steers and Debonairs is probably owned by a family that lives in the area. The listed company focuses on supplying those outlets with food ingredients etc.

Essentially, Famous Brands as a listed company is a logistics and distribution business. It earns royalties and makes a profit on the items sold to franchisees.

So when the company notes that 99 stores have been damaged and non-operational, that probably means that 99 families are now at the mercy of insurance providers. The logistics facility in Westmead, KZN has been damaged and is non-operational.

The group believes that the facility is repairable once the area can be accessed.

The impact on Famous Brands is probably quite limited. The group operates over 2,430 stores in South Africa alone, so 33 stores is not even 1.5% of the total. If you take into account the footprint in other regions, it's even less material.

The impact will be anything but immaterial for the 99 franchisees who received a flame grilled experience that nobody ever imagined possible.





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