Africa, the second biggest continent in the world in both size and population, represents a highly diverse market of over a billion people. Population diversity and underdeveloped infrastructure, together with political volatility, has, until recently, diverted much American consumer-oriented business investment to other parts of the world. But that’s now starting to change with rising economies, demand for African resources, and a more optimistic sense about the long-term prospects for the political climate. While Africa has begun rising on the business radar, attraction to other parts of the world has begun to fade as competition has put pressure on expected returns. The article refers to a projection by global management consulting firm McKinsey & Company that African consumer-facing industries will grow to more than $400 billion by 2020.
As a real-life example, the article points to Cinnabon and its experience as the first U.S. food franchise to enter Libya. Cinnabon had to address unique training and logistical issues as well as political instability. But what they discovered was that market demand was strong and sufficient to overcome all of these challenges, making the brand a success and leading to current plans for several additional locations. Moreover, the company is now eyeing a number of other untapped countries in Africa, establishing a foothold well ahead of the crowd. Cinnabon, of course, is not alone. KFC, the biggest U.S. quick-serve chain on the continent, is now in over a dozen countries in Africa, with many more planned.
One of the most promising countries in Africa is South Africa, with over 50 million people along with well-developed financial, legal, communications, energy, and transport sectors. Although South Africa, like other countries in Africa, is going through the painful process of restructuring and modernizing its economy, it remains the biggest economy in Africa, with prime opportunities for well-planned U.S. food franchises.
Chanticleer Holdings, a joint owner of privately held Hooters of America (HOA) and an independent developer of international Hooters restaurants, was an early recognizer of the possibilities in South Africa and already has majority interest in multiple Hooters restaurants in the country. Chanticleer now anticipates as many as 20 Hooters restaurants in South Africa, in addition to restaurants it has opened or is planning to open in Europe, Australia, and Brazil.
For additional information on Chanticleer Holdings, visit www.ChanticleerHoldings.com
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