The secrets to franchising success from one of SA’s best
Like most South Africans, Stelio Nathanael loves meat on the braai. His chain of restaurants – ChesaNyama, which also means “burn meat” in isiZulu – specialises in meat served straight from the braai.
Chesa nyama is a well-loved activity in many households in the townships or suburbs of South Africa, and is now a franchise brand which boasts 200 stores nationwide and five in the rest of Africa with more opening soon. But how did Nathanael take a niche market and turn it into a large franchise?
Nathanael (pictured below), aged 48 has been in the franchising industry since the mid-80s. Nathanael started out in the industry with no prior business experience or business education. The franchising experience, he said, helped him to identify a gap in the once informal grilled meat market.
Stelio Nathanael founder of ChisaNyama.
A history in franchising
Prior to ChesaNyama which was launched in 2012, Nathanael who is of Greek descent but born in South Africa, started a chain of restaurants in Cyprus, Greece which specialised in fresh salads and ice-creams, a market which was untapped in Greece back then. He managed to operate on a few on the beaches of the island, before selling the businesses and returning back to South Africa.
Following his return, Nathanael went on to set up numerous successful restaurants including partnerships with steakhouses, The Squires Loft and the Greek restaurant Papas.
In 2009, Nathanael founded the highly popular Fish and Chips Company.
“Fish and chips was niche back then and more of a UK thing. People said it wouldn’t work out because there was no market for it in South Africa,” he recalls. Not only did he prove them wrong but the franchise was acquired by Taste Holdings for R65 million in 2012.
A passion for people and food
After the sale of Fish and Chips, Nathanael decided to return to what he loves, finding the foods that people love and eat often. Nathanael says he realised that specialised businesses – in this case restaurants – are more successful than an all-round ones.
“People in South Africa now go for specialised restaurants for what they want,” he says. “For example, if they want chicken, they’ll go to a place that specialises in chicken, not a place that specialises in steaks or fish but also serves chicken”.
“For some people it’s a money making scheme, but you have to love your business enough to see it work”
The idea for ChesaNYAMA came about after Nathanael visited a township and saw that chesa nyama was loved and eaten by almost everyone. He also realised that despite its popularity, the dish was not easily available outside the township.
According to Nathanael, the concept for chisaNYAMA was to sell meat on the braai at an affordable cost and in a convenient enough way. Nathanael says they were suprised by the positive results.
“Having a unique offering makes us stand out from everyone,” he says proudly.
Nathanael says there are plans to open 300 more restaurants of his grilled meat business in the next three years, from the current 200, both nationally and throughout the continent.
“We’ve had a good reception in Zimbabwe, Lesotho and Botswana,” he says, which he says motivated his move to expand further into Africa.
The cost of setting up a ChesaNYAMA store is R499,000 and loyalties are R2,750 a month, excluding VAT.
‘Passion leads to success’
They key to starting and maintaining a business, Nathanael says, is having the passion to make it work. “For some people it’s a money making scheme, but you have to love your business enough to see it work and see yourself working hard for it,” the husband and father of two says – a logic that he instills into his children who are studying business.
“You also have to have a good product or your business will never last” he says.
“Business opportunities are like buses, there’s always another one coming”
“If you are looking at selling stores then neglecting your existing stores without having a good structure, then you are going to fail,” says Nathanael, who continues to be involved in all parts of his franchisees even after they are sold.
Nathanael says he believes that buying a franchise is less risky than starting a new business as the support structure and market already exist. But that doesn’t mean one should not constantly seek new opportunities, he says quoting Richard Branson – “business opportunities are like buses, there’s always another one coming”.
“There is so many new things coming out in South Africa everyday, but also there is so much happening in the rest of the world that hasn’t yet been done in South Africa,” Nathanael says, who urges entrepreneurs to push the envelop when it comes to business opportunities.