Acquiring a brand is a bit like buying a house. You inspect it from all sides and get a good feel for what it is, but you also have to be able to see its potential for greatness before you decide to make the commitment.
Launched in Pretoria in 1993 by an entrepreneur, Maxi’s had grown to 28 regional outlets by 2005 when it was acquired by Taste Holdings. Its positioning, product range and branding however, were very similar to other competitors at the time. So what was it about Maxi’s that compelled Taste Holdings to acquire it?
Moreover, what was the potential they saw and how did they go about revamping it to today’s chain of 75 family restaurants with an ethos of tasty, wholesome meals; a friendly, welcoming atmosphere; generous, fresh portions; and a relaxed, casual dining experience alongside quick service?
Differentiating your brand
Having worked as CEO at Pleasure Foods during the successful repositioning of Wimpy, followed by a few years’ sabbatical in Dullstroom, Calitz was approached by Taste Holdings to reposition the Maxi’s brand. “I was called in to help reposition the brand shortly after it had been acquired.
While I enjoyed the time-out in Dullstroom, the town can get a bit small, so I wanted some excitement again. And from there I had the challenge of building the brand,” Calitz explains. “We had to look at where the brand was positioned and, with my time at Pleasure Foods, I knew quite a lot of the Maxi’s background – having seen it through a competitor’s eyes – and could see the opportunities in the brand from a competitor’s point of view.”
So to set it apart and differentiate it from competitors, Calitz set about working with designers to change the look and feel of the restaurant in 2007. “The new-look stores back then were designed to encapsulate what I thought Maxi’s embodied: A warm and relaxed environment. We also made some changes to the menu, but not the square patty because that’s truly unique to Maxi’s,” Calitz explains.
With belief and confidence that Maxi’s has an unbelievable product offering, Calitz wanted to find a positioning in the market to communicate its uniqueness. “We also wanted developers to see the brand as an alternative in shopping centres and malls, so we started a campaign to generate awareness and show the new look and feel.”
Keeping ahead of change
Fast forward five years, and Calitz began tweaking the design again.
Fundamentally, Caitz finds the quick service industry pretty generic from one brand to the next, and believes the way differentiation is achieved is through the environment. “I believe that you can’t leave brands for too long without changing the elements.
New stuff needs to come in to keep the brand fresh and relevant, so because we can’t realistically expect franchisees to rebuild their stores every few years, we made sure the original redesign didn’t date quickly so that small, refreshing changes could be easily made.
“In a competitive industry, it’s the in-store experience that has to be different. From time to time the products needed to be arranged differently, and Maxi’s has to be innovative in bringing new products in. During the initial years since acquisition, the brand was at an advantage to its competition because it was small enough to innovate quickly and easily and bring new things into the business.”
Fashion, food and balancing acts
“When you look at brands, they’re a lot like the fashion industry: People buy with their eyes and you have to have that uniqueness in your environment and product offering so that people who walk past for the first time are interested in trying it. At the same time, people don’t like change, and you have people who are loyal to the brand, who’ve grown up with it, who want to have a unique and pleasant experience while at the same time not experiencing too much change,” says Calitz. “You have to be careful not to remove certain products from the menu or tamper with things too much because customers get very passionate about the products,” he laughs.
But when it came to winning the confidence of existing franchisees during the acquisition, Calitz recalls the situation.
“During that time, when Maxi’s became part of a bigger company, a lot of franchisees had the expectation that we were going to bring value, or create different value. In the process of an acquisition you have to try and find one another, build up a trust relationship, and assure the franchisees that you’re going to deliver value that they’ll judge accordingly. Of course it’s important to remember that there’s a difference between promising what you’re going to do and the reality of what you’re able to deliver.”
During the acquisition process though, all of Maxi’s franchisees stayed on board, but the changes that Calitz had in store required commitment and trust from the existing franchisees.
“You can’t leave it too long when acquiring a business to change it. You don’t always need to change something when you acquire it, but I think the acquisition gave us the opportunity not to change the product, but to change the brand imagery and positioning to focus on growth outside a region. I think that franchisees looked to my track record in the industry with repositioning some big brands and the success of those repositionings, so they trusted the changes and bought in to them,” Calitz explains.
A time for change
With this trust, Calitz nevertheless understood that the redesign would require a process of consulting with franchisees and getting them excited about the new look and feel. “Some franchisees had got to a point where they were so used to their restaurants that they didn’t want to change. But the challenge with branding is that the market evolves, and if you don’t evolve with it then the brand is weakened. So if franchisees were resistant we’d explain: ‘Rather make the changes while times are good than being forced to change when everyone’s under pressure. Don’t get into a comfort zone while brands are doing well.’”
So, in 2012 Maxi’s began tweaking again, bringing new elements into the concept as far as opportunities are concerned. “What we’re focusing on specifically in some of our transient sites (petrol stations) and also the mega-malls, is just to look at the convenience aspect of the sit-down restaurant. That includes a whole new design, but also very good quality pre-prepared meals and a great coffee moment.
“People don’t always have the time to wait around for a burger or a toasted sandwich, so we’re looking at redesigning certain of the stores and the front-of-house experience where you can actually have a ‘grab-and-go’ moment. We’ve also started focusing on new counter designs, graphics and lights, but our core elements will stay the same. When a store is five years old and you go there daily it gets monotonous, so you can create a new energy and excitement by making subtle changes.”
Maximising market segments
Maxi’s is also looking to grow other market segments. “I call them consumption moments, and the brand has always been strong on the breakfast and lunchtime trade. But Maxi’s has such a fantastic and extensive menu that it creates opportunities for the grill sector and family meals extending into the evening. So this is going to be a major focus going forward – how do we extend that product category and make it stronger, as well as effectively extend trading hours? And that’s going to require a greater marketing focus: There are still a lot of people in certain areas who don’t know about the brand and what it stands for.”
But Calitz takes this challenge in his stride. “I think the brand has a track record, being around for 20 years, and now that it’s part of a larger group that has an extensive infrastructure, it can provide support for its franchisees and grow the brand.”
About Christo Calitz
- Studied psychology honours at University of Pretoria
- Up to 1994: HR director at National Brands Ltd. (subsidiary of Anglovaal Industries)
- From 1994: Group HR director then CEO at Pleasure Foods
- 1995: Calitz orchestrates management buy-out of Pleasure Foods from Anglovaal
- Began repositioning of brands including Wimpy from 150 to over 300 stores (it was sold to Famous Brands – then Steers Holdings – in 2003)
- 2003: Calitz took a working sabbatical in Dullstroom, opening and running his own restaurant and developing a commercial centre
- 2006: Approached by Taste Holdings to begin repositioning Maxi’s brand
- Now: As CEO he is involved with all aspects of Scooters, St Elmos as well as Fish & Chip Co, building and repositioning the brands after acquisition.
Fancy yourself a franchisee?
STORE DETAILS: Maxi’s
Ideal store size: Restaurant: 130m2 – 250m2
Minimum investment requirement: Restaurant: R2,5m, incl Vat, turnkey
Joining fee: R110 000 included in turnkey
Monthly Royalty: 6% of turnover
Marketing Fee: 4% of turnover
Hot Spots for development: Regional super malls and smaller towns nationwide.
Maxi’s offers assistance with finding locations and lease negotiations. Previous experience is helpful but not required. Franchisees are given skills training in both front and back of house operations for two weeks.
Calitz is a firm believer that franchisees are the PR for franchisors. They influence the public’s perception of the brand. For this reason, a franchisee should be:
- 100% sure and committed to the brand
- Committed to the rules and operations of the brand
- Able to question certain elements to understand the brand strategy
- Focused on building their customer base and relationships
- Prepared to be involved on all levels and get their hands dirty.