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Famous Brands offers drivers BEE on wheels
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Michael Bleby
Business Day
Tuesday, June 08, 2010
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Famous Brands, the company behind Wimpy, Steers and Mugg & Bean, said yesterday it had started a black empowerment scheme to turn the drivers in its logistics unit into owners of their vehicles within three years.
The scheme, under which drivers buy half of the company’s 105 vehicles over the next three years, matches the company’s model of not owning stores. All of the 1779 restaurants in its stable are franchised.
“In franchising we say the guy who owns the store is more capable to run the store. The guy who runs the truck is far better able to manage that asset,” CEO Kevin Hedderwick said. “The customer service level goes up. The efficiency of that vehicle over time has the potential to double.”
The decision to train suitable drivers and turn them into small business owners with an R80000 truck is a further move away from the equity-stake mentality that dominated black empowerment deals for a decade.
“Owner-driver schemes are very useful and successful in most logistics companies as the training and mentoring provided assist these new businesses to be more sustainable than if they did it on their own,” said Lerato Ratsoma, MD of empowerment consultancy Empowerdex.
Famous Brands’ logistics and supply division accounted for about 66% of total revenue and 11% of operating profit in the year to February.
The company has no empowerment rating. Through this scheme, however, it could claim 15% of the black economic empowerment scorecard for enterprise development, an area many companies have had trouble implementing, said Ms Ratsoma.
After giving the scheme three years to bed down, the group would look at a wider, share- ownership scheme targeting black staff, Mr Hedderwick said.
Handing over vehicle ownership and management would save the company money, but this was not the main benefit, Mr Hedderwick said.
“Where we do see the spin-off will come, is to continually drive the margin up in logistics.
We’ve got it up to 3%-3,1%, but logistics is all about economies of scale and efficiency.
“If you can get that vehicle, instead of one load a day with 12 stops, to do two loads with 25 stops with the same vehicle and same driver, the effects are going to suck to the bottom line.”
The company is piloting the programme in KwaZulu-Natal, which accounts for about 20% of turnover. So far two drivers are signed up.
The programme will be rolled out to the Eastern Cape by the end of the year, followed by the Western Cape and the Free State early next year, with Gauteng to follow “over the longer term”, the company said.
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