Spur moves ahead in UK despite legal dispute
May 7, 2007
By Tom Robbins
Cape Town - Spur is going ahead with its plans to open restaurants in the UK, despite being embroiled in a legal dispute with its former partner, Trinity Leisure, over who holds the master franchise to the brand in the UK and Ireland.
Group managing director Pierre van Tonder said Spur had cancelled Trinity's rights to act as a franchisor for Spur Steak Ranches after Trinity failed to meet performance targets contained in the agreement between the two.
But speaking from Dublin, Trinity chairman Stephen Logue said: "We maintain they gave us an extension to the development period and they maintain they didn't."
The development period is the time allotted for Trinity to roll out new steakhouses.
Despite the dispute, which is headed for court next year, Van Tonder said Spur would continue with an expansion plan that included opening two new restaurants, in the UK in June, as well as another two in Ireland.
Logue said the issue was neither "financial" nor about the five existing restaurants, but rather about "the future development of the territory".
Van Tonder said that six years ago, the parties had formed a joint venture, committing £1 million (R14 million at Friday's exchange rate) each, and had opened the initial three stores. He said Trinity then bought out Spur's share and Logue was still meeting repayments "religiously".
He added that Logue opened a further two stores as a franchisor, including one he owned himself. Then, last year, Spur cancelled the master franchise agreement because no new restaurants had been opened. "It is all about their capacity to open new restaurants," Van Tonder said.
Logue said Trinity had plans to roll out more franchised restaurants, "but at the moment we are stymied".
"It is hard to invest with a legal debate going on."
Logue said Trinity's Spur business was "performing extremely well".
Van Tonder said Spur in the UK was essentially the same steak, rib and burger restaurant as in South Africa, targeted at the middle-income "mom, dad and two and a half kids" market.
He added that South Africans might have a perception that dining in the UK was only about pub grub and sophisticated restaurants, but competition in the middle market was fierce.
In March Van Tonder said the group had 35 international restaurants out of a total of 334.
Apart from Spur Steak Ranches, the company has the Panarottis Pizza Pasta and John Dory Fish & Grill chains.
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