Burger Chains Eye Africa for Growth

However, a strained supply chain and high produce costs could spell disaster for Burger King, Hardee’s and Johnny Rockets.

December 13, 2013

LAGOS, Nigeria – The hamburger might not make it in Africa. While some of the biggest burger chains are expanding into the continent for the first time, a rocky supply chain, high produce prices and costly meat are squeezing profits, the Wall Street Journal reports.

Johnny Rockets Group and Burger King Worldwide have opened restaurants in Nigeria and South Africa, respectively, with more planned in the future. Hardee’s will join them in 2014 with locations in Nigeria and South Africa.

The need for refrigerated vehicles and warehouse, along with a low supply of cattle, has limited expansion efforts so far. Some chains are wary of the climate, wondering if Africans will embrace fast-food menus. For example, McDonald’s has more than 170 locations in South Africa but no plans to erect more anywhere on the continent.

But not every chain has the same vision. “Africa, it's the last continent,” said Geoff Spear, vice president of international development, for CKE, which operates Hardee’s. “If we don't start today, it'll never happen.”

Pizza and chicken chains have had success in Africa, with KFC operating around 1,000 and Domino’s Pizza has five in Nigeria—the firm’s busiest by volume locations, said Eric Andre, who owns the Nigerian franchise.

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