How much it costs to buy a bar or pub franchise like Tiger's Milk, News Cafe, Cubaña, or Bossa

20 March 2023 | News24

South Africa's bar and pub scene has changed significantly in recent years - particularly when it comes to national franchises. 

What was once a market dominated by a handful of traditional pubs and bars has seen the line blurred between bar, pub, and restaurant - to create a safer jack-of-all-trades model.

Many South African bars now tend to look more like restaurants - doing quieter trade during daylight and ramping up with live music, DJs, and drinks specials in the evenings. 

They also tend to serve simple meals like burgers and pizzas throughout the day and late into the evening - a move that likely increases the appeal and potential revenue versus the days of grabbing a few evening pints at the bar.

It's a move that seems to be paying off for some franchisors. The bar, restaurant, and canteen industry is forecast to see revenue of over R100 billion in 2023 - and South Africans have a problematic love for alcohol that's further driving revenue in the liquor trade. 

The hybrid model may increase potential revenue for individual stores - but adding full-service kitchens, wide menus, and bigger floor space also increases establishment costs.

It's not something that appears to have restricted the rollout of some bar franchises.

Newer franchises that exploit this hybrid model, like Life & Brand's Tiger's Milk, and to a lesser extent La Parada, have seen significant expansion in recent years. Industry stalwarts, like News Cafe and Cubaña, have lost a few branches in recent years but remained otherwise stable with national store networks.

Here's how much it costs to open a bar or pub franchise like Tiger's Milk, La Parada, Rhapsody's, News Cafe, Cubaña, Bossa, or Brazen Head:

The Brazen Head

The Brazen Head is one of the few remaining Irish pub-style franchises available in South Africa. The first Brazen Head franchise store opened in 2003, and although growth has been muted, there are now five branches, mainly in Johannesburg's northern suburbs and East Rand. 

The pub offers a variety of relevant food and drinks for evening entertainment, with some stores branching out into lunch and breakfast, too.

Cost to open a Brazen Head franchise: A new Brazen Head franchise requires a R120 000 franchise fee and recommended capital of R150 000. Establishing a branch costs an estimated R2.4 to R3.5 million. Franchisees must pay ongoing advertising, marketing, and management fees totalling 7% of turnover.

Tiger's Milk

Tiger's Milk started as a single store in Cape Town's Muizenberg and has seen rapid expansion in recent years. There are now more than 20 branches located throughout the country, with a strong focus on what they call "dude food" and a wide range of alcohol products.

Much of their expansion has come through a franchising model overseen by Life & Brand, who also sell similar franchises in the restaurant space. 

Cost to open a Tiger's Milk franchise: A new Tiger's Milk franchise requires an initial franchise fee of R400 000, and building out a new branch costs approximately R15 000 per square metre. Once established, franchisees must pay 8% of monthly turnover towards management and marketing fees. In total, franchisees will need between R6 and R8 million to buy a new Tiger's Milk store.

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Ask Richard: How does experience stack up against education, and how do we address ageism?

Thank you, as ever, to everyone who shared such great questions for my Ask Richard Newsletter this month. I chose this question from Karen Morgan, as I have a lot of thoughts on the matter. I also paraphrased her question a little bit to fit into a headline, but I wanted to share it in full:

How do you feel about hiring someone without a degree, but with 20+ years of experience? Do you think that someone straight out of school with a degree is more suited to a position than someone with years of experience and a desire to continue learning and growing? I have encountered ‘ageism’ more than ever recently, but in my mind I’m still in my thirties and I know several others who are experiencing similar things!I feel very strongly about hiring based on character, life experiences, unique skills, passion, and values. This likely stems back to my own experience with education where I left school at 15 and learnt everything I knew from real-world experience. It required a whole lot of learning on the job, teamwork, mentorship, learning from mistakes, and trusting my instinct but I wouldn’t have done it any other way. It’s also why I stress the need to teach kids skills for life. 

In saying that, I also admire anyone who follows a higher education and excels academically. It requires a great deal of focus, determination, and mental strength, and it develop wonderful skills in research, writing, analysing, articulating, expanding ideas, and so on. There are also certain careers where a higher education is necessary such as medicine and engineering. In most cases though, it’s important to acknowledge academic endeavours, but not require them. When you’re hiring, you should really avoid requiring minimum education levels and even minimum years of experience. Instead, you should focus on a skill and character based process. Recruitment should emphasise character traits, values, life experience, transferable skills, and values that make a person unique and a good fit for your company. Virgin Management’s Inclusive Recruitment Guidelines sums it up well in saying: 

For most people, it’s the experience gained once we leave formal education that matters most. And being less specific about university degrees or qualifications encourages a broader candidate pool.

The same absolutely applies for age (and many other areas) too! With age comes wisdom, confidence, perception and experience, and businesses need to remember this. I turned 70 a few years ago and I feel more energetic and engaged than ever. There’s an unconscious bias about age that needs to be addressed. Removing the age box (and reference to specific years) in an application form is a good way to start.

Karen I really hope this was the encouragement you needed, and it sounds like any business would be lucky to have you. Here’s hoping ageism and exclusive recruitment processes soon become a thing of the part.

Full List of Bank Shares That Halted Trading as Panic Spreads

Fallout Of Silicon Valley Bank Collapse Explained

On Monday morning, trading in the shares of a number of banks was halted as panic spread following the collapse of Silicon Valley Bank.

The Nasdaq Trader website published a list of bank shares that were placed under a temporary regulatory halt. Newsweek has listed them below.

Each bank share had been hit with a volatility trading pause, a kind of circuit-breaker that automatically halts trading for a short time when a share's price swings too rapidly. At the time of writing, some of these shares had plunged by more than 60%.

The New York Stock Exchange on March 13, 2023 in New York City. A number of bank shares this morning have been placed under temporary trading halts following the shutdown of the Silicon Valley Bank last week. 

• Western Alliance Bancorporation Common Stock

• PacWest Bancorp

• First Republic Bank Common Stock

• Zions Bancorporation N.A.

• OceanFirst Fnl Dp Sh Pfd A

• Customers Bancorp, Inc - Common Stock

• East West Bancorp, Inc.

• Metropolitan Bank Holding Corp. Common Stock

• First Horizon Corporation Common Stock

• Regions Financial Corporation Common Stock

• Comerica Incorporated Common Stock

• Bank of Hawaii Corporation Common Stock

• KeyCorp Common Stock

• Customers Bancorp, Inc 5.375% Subordinated Notes Due 2034

• Macatawa Bank Corporation

• Texas Capital Bnc

• United Community Bk Dep

• The Charles Schwab Corporation - Common Stock

• Coastal Financial Corp Cm St

• Huntington Banc Dep Shs J

• Magyar Bancorp Inc

• Macatawa Bank Corporation

Some of the bank shares listed above had trading halted several times.

A spokesman for First Republic Bank, whose shares as of 1:08 pm EST had fallen 64%, said: "We're continuing to fully serve the needs of our clients by opening accounts, making loans, executing transactions and delivering exceptional service at our offices and online."

A spokesperson for Charles Schwab directed Newsweek to a monthly activity report published today from Chief Financial Officer, Peter Crawford.

"Schwab's business continues to perform exceptionally well," the activity report said in part. "We have access to significant liquidity, including an estimated $100 billion of cash flow from cash on hand, portfolio-related cash flows, and net new assets we anticipate realizing over the next 12 months. We believe we have upwards of $8 billion in potential retail CD issuances per month, plus over $300 billion of incremental capacity with the Federal Home Loan Bank (FHLB) and other short-term facilities – including the recently announced Bank Term Funding Program (BTFP)."

As of 1:22 p.m. EST, shares of Charles Schwab bank had fallen by 10.61 percent.

Newsweek reached out to Western Alliance, Zions Bancorp. and East West Bank for comment via email.

The news on Monday comes shortly after the collapse of Silicon Valley Bank last week.

In a statement, the Federal Deposit Insurance Corporation (FDIC) said: "Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank."

According to Investopedia, trading halts are short stoppages across numerous exchanges. "Trading halts are typically applied ahead of a news announcement, to correct an order imbalance, or as a result of a large and abrupt change in the share price," Investopedia states.

On Sunday, the U.S. Department of Treasury, the FDIC and the Federal Reserve issued a joint statement addressing the collapse of the Silicon Valley Bank.

"Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth," the statement said. "We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer."

"The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe," the statement added.

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Market depends on skilled labour with universal exposure. 

Along with the many other issues hampering foreign investment and development in South Africa, the country is facing a visa crisis. 

Visa chaos at Home Affairs

Skilled labour, students and visitors on business, as well as tourists, are being held up by a failing administration and bureaucracy. 

Businesses are struggling and losing out on not only critical skills injections, but also on broader interactions with overseas partners in terms of internships, mentorships and short-term exchanges of staff. 

This is acutely felt across all sectors of society, and no more so than in higher education and at our universities as the academic year gets underway. 

Amidst the challenges of student protests over finances and debts, universities’ internationalisation projects are being jeopardised. Universities continue to lose students who would otherwise add to the diversity and broader internationalisation project of the country. 

Universities’ quotas of international students are low, compared to bigger and more developed economies. 

Some might say this makes sense in the bigger ecosystem of fierce competition for study spaces in SA. However, it is not the percentage of international nor local students that presents a problem to the economy, it is the lack of study spaces. 

We cannot afford to lose international students and staff for several reasons.

A university degree and higher education experience are dependent on a diversity of viewpoints from scholarships, peers and teachers and the curriculum itself. 

From an education and organisational perspective, diversity feeds excellence. With the increased importance of university rankings, international students, staff, research collaborations and citations and partnerships have gained substantial importance and form the backbone of the rankings system.

Facilitation of international students 

We cannot rely on other nations and universities to reciprocate if we do not facilitate for international students to study in SA.

Our own labour market depends on skilled labour with international experience and exposure. International students add to the economy in several ways and in the immediate to the finances of the institution where they are registered through paying international student levies and fees. 

Even though internationalisation and attracting African students and staff for SA universities remains mainly an exercise in equity and diversity, there is no reason we should not compete for students from the continent with bigger economies. 

In the long-term, the international students are highly educated, often the top students in their home countries and after graduation become part of our international alumni. 

International alumni are our brand ambassadors and with tight budgets for marketing and recruitment, engaging alumni has become more important than ever. In particular, our African alumni will help build future partnerships and coalitions on the continent. We cannot afford not to leverage off our African alumni. 

This is recognised through the Policy Framework for Internationalisation of Higher Education, developed to support the enrolment of international students at the country’s universities and institutions of higher education, particularly from the rest of Africa. 

This is a “means of contributing to [the continent’s] human resource development and giving expression to our commitment to African development and the African renaissance”. 

Inbound and outbound access for international scholars

The policy states government is to facilitate inbound and outbound access for international scholars and students, yet nothing is said as to how this will be implemented. 

And as SA universities are completing their main registration cycle, assistance has not been forthcoming, and administration staff at our universities is having to answer to government failures with understandable little understanding from students and colleagues frustrated by the processes and lack of support. 

Colleagues within the administration are concerned about what happens to students and staff and the broader internationalisation project of our universities when we cannot facilitate the basics for our international students and staff. Increasingly, staff is asking “what is it going to take for government to wake up”.

And while staff is strained and under pressure, the impact this has on our students and staff caught in limbo is massive and has consequences for people’s futures, livelihoods and families, and the toll taken on mental health. 

Despite some mitigation measures, such as blanket extensions for pending visa applications including pending waiver applications this is simply not enough. 

The country needs and depends on being able to process all applications quickly and with outmost professionalism. 

We need the support from government to streamline and increase transparency in visa processes. Without it, our internationalisation efforts and the broader global engagement project of our universities is jeopardised

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Home Affairs Department said it is reviewing their options relating to the 22 Afghan nationals seeking asylum

The Home Affairs Department said it has asked for a legal opinion regarding the matter involving 22 Afghan nationals who were dumped in the country without being vetted.

`We are reviewing our options and have asked for a legal opinion in this regard,` said Home Affairs Minister Aaron Motsoaledi’s spokesperson, Siya Qoza.

South Africans expressed concern over a security rush associated with the 22 Afghan nationals who are in the country; some even suspected that they might attack citizens.

Last week, the Pretoria High Court ruled in favour of the 22 Afghan nationals who are believed to be running from the `Taliban` and who wanted asylum in the country.

This was after the US NGO Lifeline Foundation took the department to court after the applicants were refused entry.

According to the website, the Lifeline Foundation is an expeditionary-focused, 501(c)(3) non-profit organisation providing humanitarian support, security, and logistics to rebuild communities around the world. It was established in 2021.

Last month, Motsoaledi said the department was challenging the court order because the asylum seekers could pose a risk to the country.

The department said on February 15, 2023, they received a letter from a firm of attorneys representing unnamed Afghan nationals demanding that asylum transit visas be issued to those unnamed individuals at Beitbridge Port of Entry.

When asked if he will challenge the ruling, Motsoaledi said they are going to hear what the lawyers tell them.

`By the way we have challenged it, they were supposed to arrive here on February 17 because we received that letter on the 15th and we challenged it in court. And after that, when it went to court for the second time, the judge said that you must allow them in to apply. So we will look into which areas, depending on what the lawyers advise us to do,` Motsoaledi said.

Motsoaledi said he was disappointed with the ruling, citing that no one goes to court not hoping to win.

After the ruling, the department said it would abide by the ruling, but Motsoaledi, in an interview with one of the broadcasters, said they are reviewing the decision because a number of colleagues in government are not convinced that the country should take it. He said they also looked at the implications to see whether this was going to open floodgates.

`So we are looking into an issue, including asking for legal advice from outside the department, outside the government,` he said.

He said they will abide because the court said they must allow the 22 individuals to come to the country to apply for asylum.

When asked about the whereabouts of the 22 individuals, Motsoaledi said the last time he checked, they were in Zambia.

`The last time we learned, they were in Zambia, and we believe that they are still there. Remember that in Zimbabwe, they entered as visitors who said they were on vacation. That`s what the Zimbabwean government informs us. We were given 30 days, and they were expiring. That is why they had to leave Zimbabwe, but we understand that they applied for the same visitor`s visa to Zambia, and they`re still there. I don`t know how long I heard the rumour that it was going to be for 25 days. I don`t know when it will expire. But they are still there,` Motsoaledi said.

Explaining the asylum process, Motsoaledi said the system says once one goes through the borders having been given the Section 23 permit, that means, in terms of Section 23 of the Immigration Act, you are given five days to represent yourself at the nearest refugee reception centre,

He said the country has five centres, one in Limpopo, two in Tshwane, Gauteng, one in Cape Town, one in the Eastern Cape, and one in KwaZulu-Natal.

He said they will find a kiosk at a refugee reception centre where people can just go and do renewals.

`Then during that process, a person called a refugee status determination officer will be interviewing you to see whether you qualify for refugee status in terms of the United Nations Convention 1951 and the United Nations Protocol of 1967 and the EU, now called the European Convention of 1969, and the domestication of all those laws, the domestication into the Refugee Act of South Africa of 1998,` said Motsoaledi.

ATM President Vuyo Zungula said the issue is our Constitution.

`People drafted the Constitution in the mid-1990s because they wanted to be the complete opposite of what happened during apartheid. Then this is abused by foreign nationals and other foreign bodies that want to achieve certain objectives in South Africa,` Zungula said.

According to media reports, these 22 individuals were willing to provide medical assistance at the Cape Flats in the Western Cape, a place known for violent crimes and gang-related incidents.

Motsoaledi said that is an insult to the medical fraternity.

`How does a person say, I’m coming to apply for asylum, and you must give it to me; after all, I’m going to help you, and I even know the area where I’m going to help you. Surely if we have a shortage of medical personnel, we are the ones, as a sovereign state, who must say so and even show you the area where you must go. They did not even mention what kind of medical qualifications they have,` Motsoaledi said.

He revealed that they have the passengers` manifest.

`But what we know about them is that the Americans themselves say these are the people who were helping the Americans during the time when Americans were in Afghanistan,` he said.

He said they are suspicious of the individuals and what is going on.

`We are still very suspicious about what is going on. In court, the explanation was that the people moved from Afghanistan to Pakistan and the Taliban followed them there. And then they went to Qatar. And they claim that Qatar sent them away. Then they went to Zimbabwe and never said they were being sent away; we are asking for asylum or protection. They said they were on vacation. Now they are in Zambia for a vacation. Why is it that out of all those countries, only South Africa has been targeted for this?` said Motsoaledi.

An activist known as `Sentletse` on Twitter asked DIRCO spokesperson, Clayson Monyela, if the country had any security background information on the 22 Afghan nationals.

`Nothing! They`re not vetted (their background and agenda are unknown). They arrived at Beitbridge, accompanied by some American citizens. Lawyers had already written to Home Affairs (reportedly briefed by an American-based NGO). We need to urgently review and tighten our immigration laws,` replied Monyela.

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