Well-known restaurant brands booming in South Africa 

Famous Brands’ Leading brands segment, which includes Steers, Wimpy, and Debonairs, is performing very well, but its Signature brands segment is under significant pressure.

Famous Brands is a restaurant conglomerate with a portfolio of 16 brands represented by a franchise network of 2,979 restaurants across South Africa, the Southern African Development Community, the Rest of Africa, the Middle East, and the United Kingdom.

The company’s Leading brands and signature brands are primarily franchised, with some company-owned restaurants.

The Leading brands portfolio is segmented into Quick Service and Casual Dining brands, and includes well-known names like Steers, Mugg & Bean, Wimpy, Debonairs, Milky Lane and Fishaways. 

The company’s Signature brands include Lupa, Mythos, Paul, Salsa Mexican Grill, Turn ‘n Tender, Vovo Telo, and House of Coffees.

Famous Brands recently released its results for the year through February 2025, which revealed a strong performance from the group.

The company’s revenue grew by 3.23% to R8.28 billion, while its cost of sales rose by 2.10% to R4.74 billion.

Famous Brands’ operating profit was R913.97 million, up 12.57% from the prior year, and its total profit for the year was R584.56 million, up 20.85%.

The company’s basic earnings per share rose from 457 cents to 547 cents per share, growth of 19.69%.

Most of the company’s income in its 2025 financial year came from its South African operations, which contributed R7.63 billion to total revenue.

The company’s Leading brands segment was the largest driver of profit in this year, having made an operating profit of R516.28 million, up 7.5% from 2024.

In contrast, the Signature brands segment swung to an operating loss in the year, having gone from an operating profit of R8.92 million in 2024 to a loss of R9.19 million in 2025.

Challenges ahead

The company explained that economic headwinds in South Africa significantly curtailed consumer spending in the period. 

“This means consumers prioritise essential spending and seek value for money,” it said. 

“Competition remains fierce, with increasing advertising activity and a higher frequency and depth of value deals and promotions.”

Other challenges the company highlighted include deteriorating infrastructure, unreliable electricity and water supply and logistics sector issues.

However, it said there were some green shoots for 2025, including the reduction in load-shedding, improved consumer sentiment, rand stability, lower inflation and three interest rate cuts. 

“The landscape favours franchised brands over independent restaurants. Our scale and well-known brands provide an enduring competitive advantage, and consumers continue to seek affordable yet indulgent moments,” it said.

Looking forward, Famous Brands said the outlook remains uncertain due to global political tensions and the United States’ policy decisions, including the introduction of tariffs, which are expected to weigh down global economic growth.

In South Africa, the company expects low growth and low consumer discretionary spend and tailwinds, including lower inflation, further interest rate cuts, improved business and investor confidence, and a better national energy outlook.

“Our strategy remains appropriate and resilient despite the difficult trading conditions. We must continually refine our value offerings, menu options, promotions and loyalty programmes in response to consumer trends and remain competitive,” it said. 

“We are investing in the delivery channel, smaller formats and drive-thrus to meet consumer demand for convenience.” 

The company said its Leading brands’ restaurant pipeline is healthy, with strong interest from both new and existing franchise partners.

“We will expand in the SADC and AME regions with a cautious and targeted focus on selected markets,” it said. “Supporting the profitability and sustainability of our franchise partners remains critical.”

“As our revenue comes under pressure, we look to become more efficient. We are refurbishing our manufacturing plants with investments phased over the next three years.” 

These investments will include introducing modern manufacturing technology to enhance capacity, processes and yields, while also reducing waste. 

“We are optimistic about our prospects and opportunities for growth and innovation through trading formats, technology and menu development,” the company said.

The company declared a final dividend of 195 cents per share, bringing the total dividend for the year to 345 cents per share.