/ 11 August 1995

McDonald’s first franchises in South Africa

Karen Harverson

Multinational hamburger chain McDonald’s is on track to=20 open its first two restaurants in South Africa despite=20 the fact that the court case over the rights to its=20 trademark has not yet been resolved.

South African George Sombonos, owner of franchise chain=20 Chicken Licken, is seeking the right to expunge=20 McDonald’s trademark from the South African register on=20 the basis of “non-use”.

“We are in the process of establishing a full country=20 office in South Africa and plan to have a mix of=20 operations in this country,” says Carter Drew, newly=20 appointed managing director and president of McDonald’s=20 South Africa.

He is adamant that McDonald’s had nothing to do with=20 pressure exerted on South Africa by the United States to=20 intervene in the case.

“We are operating in good faith and expect to open in=20 South Africa. We have confidence in South Africa’s due=20 process system.”

The first two outlets will be based in Johannesburg and=20 Cape Town and will be franchised with individual=20 franchisees owning and operating their own businesses.

Three South African potential licensees are already=20 undergoing training in New Zealand=20

Drew says the company expects operations to be up and=20 running by December this year.=20

He indicates that a substantial marketing drive will be=20 undertaken prior to the opening.

It is McDonald’s policy to use local suppliers wherever=20

“Suppliers have been identified and will be appointed=20 within the next two to three months,” says Drew, adding=20 that most of the ingredients will be sourced locally.

The restaurants typically employ 60 to 80 people. “It=20 will be some time before the company becomes a large- scale employer in South Africa,” adds Drew.

The company is the leading food service retailer in the=20 global consumer market place, with more than 15 700=20 restaurants worldwide.

About 80 percent of its businesses are locally owned and=20 operated by independent entrepreneurs.

South Africa will be the 84th country in which=20 McDonald’s opens its doors, and the third African=20 country after Morocco and Egypt. Morocco has two outlets=20 while Egypt has four.

Drew says that the company will own or lease the=20 property in South Africa on which the restaurants will=20 be sited.