South Africa’s most popular seafood restaurant chain, Ocean Basket, is gearing up to develop the franchise globally. CEO Manny Nichas takes Gay Sutton behind the scenes to review the secrets of this success.
Surrounded by the rich waters of the Atlantic Ocean to the south west and the Indian Ocean to the south east, South Africa enjoys an abundance of good fish and seafood. Little wonder then that it is home to one of the world’s most popular seafood restaurant chains, and that the brand is poised to go global. Ocean Basket began life just 15 years ago when three friends, George Nichas and brothers Fats and George Lazarides opened a seafood restaurant at the Menlyn shopping centre in Pretoria. The first Ocean Basket was a small establishment seating just 60 people; and while its size was not indicative of the strong franchise brand that it was destined to become, its popularity and the quality and value of its food was.
This quality and value for money was built on the knowledge and experience of founder George Nichas, a seafood procurement specialist who from the very beginning established a unique supply chain model for Ocean Basket which continues today. Only the very best seafood would do, so he travelled the world, visiting seafood shows and major suppliers, procuring the very best for use across all his restaurants.
CEO Manny Nichas joined the company three years after its launch. His remit was to steer the company through growth and development. Today, Ocean Basket operates 130 franchised stores and employs some 7,000 people across the franchises. During the first 10 years, however, the brand consisted largely of company owned restaurants that opened up progressively across the nation. Then about seven years ago, the company made a strategic decision which was to shape its future and accelerate growth.
“Seven years ago, it was becoming increasingly difficult to manage all of these company-owned stores,” Nichas says. “The managers obviously didn’t have the interest in the business that owners would have, and consequently many of the stores were underperforming. So we made the decision to sell off all our company-owned stores and run them as franchises. This had a huge effect on the company. Our turnover grew phenomenally while we were left with the task of controlling the operation and maintaining the standards of each restaurant.”
Nichas has implemented a strong management structure for maintaining the quality and integrity of the franchise brand. Not only does he commission regular independent health and hygiene audits and employ mystery diners to spot check on the menu, service and performance, but he has also developed a team of experienced and highly trained franchise consultants who visit the restaurants on a regular basis, evaluating performance, monitoring standards and ensuring the brand rules are adhered to.
“I’ve also tried to avoid the situation where the consultants are spread too thinly,” he explains. “We have a maximum of 10 stores per consultant, which means that consultants can get to each of their stores at least once a week.” As a consequence, consultants have time to concentrate on and deal with issues as and when they arise and have the freedom to spend several days with a troubled store.
Selecting the right franchisee is of paramount importance, and Nichas has developed a rigorous screening process for potential franchisees that eliminates many difficulties before they arise. The first step is an industry developed franchise-competency test. Those who successfully pass this are then put to work for 10 days at the training restaurant. “There, we assess the applicant for the characteristics and traits we’ve identified as important for running a successful franchise: an outgoing personality; enjoying meeting and dealing with people; having the right character to be able to control the staff; abiding by our franchise rules and standards of best practice; and financial skill and business acumen.”
Applicants are then shadow-matched: given a personality test to ensure they match other successful franchisees. The normal credit checks are done, and the final stage of the selection process is an interview by the board of directors.
New franchisees and their staff are put through an eight week training course at one of three regional company training centres. “I would say the biggest and most important department in the company is the training department,” Nichas says. The training centres are located in Cape Town, KwaZulu Natal and Johannesburg and deliver nationally accredited industry recognised qualifications. Their importance is hard to overstate, as they play a crucial role in maintaining standards and performance, raising morale and reinforcing the franchise identity.
Maintaining the brand standard continues to be one of the greatest challenges, and the company does not shy away from taking action to protect its name. “On the rare occasion we have a franchisee who thinks he knows better and goes against the rules of the franchise, we either require them to sell the store to somebody else, or on the very rare occasion we will reach the stage where we’ll defranchise them and take the Ocean Basket name down.”
Unlike many franchises, Ocean Basket allows its restaurants leeway to be a little different. The menus are standardised across the group and have remained relatively unchanged for many years. However each restaurant is encouraged to create its own specials. “We do that within certain parameters—it must be seafood, and alcohol cannot be used in the meals as we aim to be halal-friendly.” This freedom gives each store the element of individuality, and motivates and inspires its staff. “And I believe the success of any business is down to the dedication of its people.”
One of the biggest challenges facing the seafood industry at the moment, though, is the dwindling seafood resources. “It’s a worldwide challenge,” Nichas says. “So over the last five years we’ve done our utmost to source aquacultured seafood, as well as sustainable fish which we have introduced into the local market. We’re now looking at ways to support the aquaculture farms to guarantee our seafood supply and protect the fish in the sea.”
Looking to the future, Nichas plans to continue expanding the Ocean Basket brand. The company has successfully opened restaurants in Zambia, Namibia and Cyprus. This year, it will be opening a further 25 Ocean Baskets, including ones in Saudi Arabia, the Australian Gold Coast and Dubai. “We’re also looking at further international expansion. The UK is a strong contender at the moment and we’ve had a number of requests from other large first world countries.”
Meanwhile, the company is diversifying. “We have developed a new restaurant concept called Braza, which is influenced by the food of Mozambique, Portugal, Brazil and Angola,” Nichas explains. There are currently eight in South Africa and a further five are planned for next year. “We’re also looking at developing into the retail side. We have always sold seafood over the counter to our customers; but we are now looking at manufacturing and bottling our spices and sauces for sale in the supermarkets.”
Ocean Basket is, and will continue to be, the bedrock of the company. And Nichas believes there is still a large untapped market for the brand in South Africa, which means there is considerable room for growth.