FRANCHISE group OBC Chicken aims to open another six or seven outlets this year, but these stores will be carefully placed.
On Friday, marketing and franchise manager Mike Pinnoy said the company, which has 65 stores, aimed to expand into the Eastern Cape and improve its footprint in KwaZulu-Natal.
OBC also wants to open stores in Vereeniging, Vryheid, Newcastle, Pietermaritzburg, Soweto and Empangeni.
There are OBC stores in Gauteng, the North West, Limpopo, the Free State, Mpumalanga, KwaZulu-Natal and the Northern Cape.
Pinnoy said its store in Musina, opened in March, was a good example of OBC serving the migrant worker market.
“Migrant families going home to their homelands stock up on OBC Chicken supplies and fuel a demand in those areas for an OBC store to be set up”.
The store in Musina caters to the local market and is helping feed Zimbabweans who stream across the border to stock up on the basics.
Pinnoy said the company put substantial effort into choosing sites that would earn its franchise partners a decent income and would be sustainable.
Founded in 1987 and franchised from 1998, OBC targets the lower-income market and stocks fresh and frozen meats and basic groceries such as maize meal.
The stores do not stock items such as deodorant, or fruit and vegetables.
Each store costs R3m-R3,3m to set up, excluding stock, but the company was looking into smaller models than the average 500m² size, said Pinnoy.
MD Tony da Fonseca said, “OBC started as a Portuguese family enterprise based on that community’s tradition of trading in predominantly black areas”.
He said it was time the group broadened its franchise footprint, with more equitable franchisee representation resulting in a bigger effect on communities and the economy.
Da Fonseca said that the high cost of setting up a turnkey food retail operation is a prohibiting factor for many entrepreneurs and plans are under way to develop smaller, more affordable franchise options for smaller towns with smaller turnover.
This will give opportunities to people with less capital to invest.
“OBC’s immediate objective, said Da Fonseca, “is to expand the brand’s footprint not only in the top-end turnkey setup but also tailor store size and costs into areas that can sustain a lower level of turnover from smaller populations where a top-end store is not feasible.”
Da Fonseca said that “another strong area of growth is in conversions where independent fresh meat retailers who are suffering in these tough times opt to be part of a strong, established franchise brand like OBC Chicken to ensure sustainability”.
OBC started as a small grocery store in Carletonville. The stores supply fresh and frozen chicken and had expanded the range to include red meat, fish, processed meat, dairy products and selected groceries.
By the end of 2000, 23 stores were in operation, and since 2000 growth was rapid until 2005, a year for consolidation, improved infrastructure and growth planning.
In the past five months, 80% of the stores have shown turnover growth of up to 20%, said Pinnoy.
mawsonn@bdfm.co.za