The purchase consideration falls below the threshold of a categorised transaction in terms of the listings requirements of the JSE and will be settled from cash reserves. All suspensive conditions have been fulfilled and the effective date of the transaction is 1 June, 2016.
Darren Hele, Famous Brands’ CEO said: “This joint venture furthers our stated strategy to compete more vigorously in the fast-casual dining category, one of the quickest growing segments in the restaurant industry over the last decade.”
“There are a number of compelling motives surrounding this acquisition. Within the South African context, our research revealed that a gap exists in the fast-casual Mexican cuisine space. Although we explored the possibility of establishing a start-up concept of our own, by acquiring a controlling stake in Salsa Mexican Grill we gained significant strategic advantage given the brand’s first-to-market head start and best-in-class offering.
“Furthermore, it is well known that local consumers enjoy spicy flavours and are increasingly willing to try new varieties of modern, authentic cuisine. Globally, fast-casual Mexican concepts are experiencing double-digit growth and we anticipate that Salsa Mexican Grill will quickly mirror that trend.
“In the US, consumption of Mexican food is increasing at a faster rate than any other segment of the restaurant industry and is the third most popular menu type at approximately 8% of the total restaurant landscape*. In the UK, the number of Mexican restaurants has risen by 71% in the last year.” **
Salsa Mexican Grill is the brainchild of co-founders George Nicolopoulos and Symeon Yiallouris; the business is owned by the pair, George’s brother Thanasi Nicolopoulos, and two other co-partners.
Operating partner, George Nicolopoulos, said: “Our family lived in the US for almost a year, during which time our love for Mexican food was born. Subsequently, the Salsa Mexican Grill concept culminated from extensive research conducted in the Mexican food category in both the US and the UK.
“The brand is based on a contemporary interpretation of a traditional Mexican restaurant. We strive to create an atmosphere that is authentic and epitomises Mexican entertaining – which is festive, welcoming and homely. This ambiance is echoed in our décor and food and the service offered by our highly trained staff.
“The Salsa Mexican Grill concept appeals to a wide range of diners: families out for a quick midweek meal, business colleagues engaging in a relaxed environment, and party-goers looking for a memorable night out. Significantly, we also enjoy a very favourable response to our wholesome meal options from customers seeking healthy dining offerings.”
In terms of trading performance, Nicolopoulos said: “To date, the restaurant has exceeded our expectations. In the short space of 10 months we have achieved a loyal following of customers.
“Our immediate goal is to open more restaurants to keep pace with the rapidly growing demand from new customers and, thanks to our partnership with Famous Brands, we will have the opportunity to fast track those ambitions. Initially, our focus will be on building the brand in and around the Gauteng region; with the Group’s expertise and support we plan to grow a presence relatively quickly.”
The joint venture business will retain the expertise of Salsa Mexican Grill’s existing team, which will be headed up by George Nicolopoulos, supported by his four co-partners and Famous Brands’ management.
Hele concluded: “The expansion potential for the Salsa Mexican Grill brand is substantial. In general, the market for fast-casual offerings is far less saturated than other segments in the industry and provides more numerous franchise opportunities for entrepreneurs. In this light, we anticipate strong demand from franchisees and landlords alike, and look forward to growing the brand’s national footprint over time.”
* Source: www.chd-expert.com: The Mexican Restaurant Industry Landscape: A Popular Choice for Cinco de Mayo and all year long
** Source: The Guardian
