8 things you need to know about the Famous Brands, Paul licensing deal
French bakery chain to enhance the franchisor's premium-end offering
In late 2015 quick service restaurant and casual dining franchisor, Famous Brands, announced that it would be bringing family-owned French chain of bakery-cafes, Paul, to South Africa with a licensing deal.
Last week the bakery finally opened its doors in Melrose Arch in Johannesburg.
The Famous Brands holding company is home to local franchise brands the likes of Steers, Wimpy, Debonairs Pizza, Mugg & Bean, FishAways and tashas.
The group comprises a portfolio of 30 brands represented by a franchise network of 2 626 restaurants across South Africa, and the rest of Africa, the Middle East and the United Kingdom.
Paul joins recent foreign imports including Starbucks, Domino's Pizza and Krispy Kreme Doughnuts, which have enjoyed success in the South African market which continues to show appetite for foreign food franchise brands.
Famous Brands former CEO Kevin Hedderwick, in an interview with Moneyweb about the signing of the agreement, said: "South Africans are hugely aspirational and there is no doubt that local consumers are increasingly aligned with international trends and choose to associate with brands with style and status that are popular in Europe and the USA."
Here is EVERYTHING you need to know about the Paul bakery restaurant and its deal with Famous Brands.
1. The Paul family business was founded in 1889 in Croix in northern France, and has since expanded across 41 countries in Europe, Asia, USA, the Middle East and now into South Africa. Since the opening of that first store the brand now has over 670 outlets globally.
2. The flagship Melrose Arch outlet will boast full table service in a 180-seater restaurant, according to EatOut, serving breakfasts, brunches, lunches, afternoon teas and dinners, in addition to the famous display counter of baked treats.
3. The exclusive license agreement with the French family-owned company makes Famous Brands Paul’s South African licensed partner for a ten-year period. Famous Brands will not franchise any of the Paul café’s, they will all be company owned. "The license agreement with Paul is based on a company-owned model, which aligns with our investment strategy to grow Famous Brands’ base of company-owned stores," the company says on its website.
4. The deal marks the first time that Famous Brands has introduced a foreign brand in 16 years. In 2001 they unsuccessfully introduced US-brand Church’s Chicken.
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6. There are plans to expand the bakery-cafe across South Africa. In terms of the license agreement, Famous Brands is contracted to open five company-owned Paul outlets over a five year period. The initial roll-out programme will focus on Gauteng with the Melrose Arch bakery and patisserie facilities designed to service other Paul outlets up to three times daily, according to Famous Brands.
7. The deal has been a learning curve for Famous Brands with CEO Darren Hele, saying: "The opening of our flagship PAUL restaurant is the culmination of 15 months of close partnership between our two teams to ensure that the execution of this project has been at the highest international standard. Importing a global brand of this stature has been an excellent learning curve, bringing with it best practice benchmarks that will benefit our business in a number of key areas."
Hele says, "In the context of challenging trading conditions experienced during the review period, the Group’s unwavering focus on consistent improvement and investment in the business continued to deliver rewarding results."
He adds, "Management’s strategic drive to build capability and capacity across our Brands, Logistics and Manufacturing operations continued apace, with the successful integration of recently acquired businesses and the acquisition of additional new businesses."
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8. According to Paul, International Chairman, Maxime Holder, the deal is a perfect fit. "When we concluded the agreement in 2015, I noted that Paul, like Famous Brands, is a family business; the entrepreneurial cultures of each company are well aligned. This has been an important factor in successfully bringing Paul to this country. South Africa is a promising emerging growth market and this together with Famous Brands’ track record and experience in the industry augurs well for our long-term partnership."