Experience is Ocean Basket's Chinese takeaway, not greed

Seafood restaurant chain Ocean Basket's expansion plans over the next few years could include opening outlets in China.

As the South African-based Ocean Basket enters its 21st year in business, it is in the final stages of launching a franchise in the world's second-largest economy.

It has already cemented its position with 203 stores in 16 countries , including Dubai, Saudi Arabia, Egypt, Malta and Cyprus.

The group also has plans for expansion involving a further 76 stores in Kazakhstan, Oman and Qatar.

CEO Grace Harding said this week: "The trick to globalisation is getting your supply chain in order."

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She added that it has to be cost-effective for the group and "it's got to be cost-effective for your franchisee". What is nice about globalising is that we are inventing it to suit us and because we are not greedy.

"The most important thing is that the experience is right.

"If it is going to be too costly or too complicated to get the hake from here to Kazakhstan, for one store, we'll allow them [franchisees] to source a similar fish locally. We'll approve it, we'll approve the taste.

"The things that are non-negotiable are the spices."

But taking a brand into the global market does come with its hiccups.

Harding said she had not visited the group's two stores in Saudi Arabia because her husband would have had to write her a letter of permission to visit the country.

"So I said I'm not going there."

System-wide sales for the restaurant chain are about R2-billion a year.

The company earns the bulk of its income through its wholesale division which focuses on avariety of niche products.

block_quotes_start Smaller family chains, if they are not in debt and if they are in a strong position, will survive block_quotes_end

Franchise fees are 4.5% royalty and 2.5% for marketing, said Harding.

But franchisees will have to pay R5-million for the new-look stores, which includes stock, a joining fee, building, equipment and training.

The seafood chain launched its new-look stores in Fourways, Dainfern Square and Mall of Africa in Midrand as part of a drive to create a better customer experience.

Anthony Clark, an equity analyst at Vunani Securities, said established fast-food chains such as Famous Brands had tried to buy Ocean Basket but had been resisted.

The company is also opposed to listing on the JSE.

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"Why would you list in the current environment, when the fast-food segment is probably under the greatest strain and pressure it's been for probably a generation?" asked Clark.

"Smaller family chains, if they are not in debt and if they are in a strong position, will survive," he said.

"So given that the current fast-food companies are not great on the JSE and nor is the environment for listed companies, why on earth would you want to risk listing your historic legacy family business on the JSE if the segment that you are trading in is under duress?"

Clark said there was a misconception that every company always wanted to get bigger or to grow. In many cases they had a very profitable niche, trading at a certain size, making a very good living for the founding family.

Harding echoed Clark's position: "We are not going to list, because the founders' aspiration is to leave a legacy. They don't want general rich people to have a piece of the brand."