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Further to the story about Burger Fuel Worldwide[BFW] signing a master franchise deal with a business in Dubai, I mentioned I was going to ask Josef Roberts, Executive director of the company a couple of questions to flesh out the details of the deal to the market and his investors.
He was very accommodating before the July IPO, granting me an email interview about where the company was going, in some detail.
Here were the questions I put to him yesterday
Hi Josef, I hope you are well.
Interesting announcement today re the Dubai franchise deal. It took me by surprise.
On that note, I wonder if you could inform my readers as to some of the finer points of the deal and some of the reasons why you took the business across the other side of the planet.
Assuming you could answer some questions because the market is speculating.
1: why are you going to develop a new overseas market before establishing the current Australian one?
2: Did the Dubai company approach BF or you them?
3: Are the terms of the master franchise similar to that of individual franchisee agreements in New Zealand?
4: What number of outlets do you see in Dubai?
5: Are customers likely to be locals or expat kiwis/Aussies/Brits etc?
6: How will the BF menu be different in such a unique country?
7: What experience does the Dubai company have being a food franchisor?
8 How is Burger Fuel Worldwide going in terms of revenue created for the Franchise company as a whole and are you on track?
9: How has your experience of your company now differ from what you thought it would be when you initially planned this listed franchising model, have things changed considerably?
10: Is Australia proving difficult to crack, given the amount of competition in Sydney?
11: How has the current credit crises affected your business expansion, if at all, and is the associated economic slow down having any affect on store sales?
12: Finally, where do you see Burger Fuel being in 12 months?
I would appreciate your assistance in informing my readers. There is much google interest on our blog every time you guys have a press release and we have had a handful of Dubai hits today, just as a matter of interest.
Regards, Darren
Josef's answer to my questions
Hello Darren
To paraphrase your own comments about BurgerFuel and me – “Go Figure”.
All the best.
All I can say is it would have been nice to hear some detail about the Dubai deal and where his company might be heading and how it was doing.
My questions were really stimulated by the company and its big leap right across to the other side of the world before being properly established outside New Zealand, in their first overseas market, Australia.
I felt that his investors might like to know the finer points of this move.
As I said above, Josef was very accommodating before the Burger Fuel IPO and I was expecting the same sort of candidness as the company progressed.
I realise his curt response maybe motivated by some of my criticism but after all it is only my opinion and therefore his side of the story would at least balance things.
Nevertheless I still wish him and his company well and hope his lovely burgers(minus the bacon) take off in Dubai.
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They will be eating Burger Fuel burgers in Dubai soon, thanks to Burger Fuel Worldwide[BFW] management signing a Master franchise agreement with Dubai based Al Khayyat Investment Group Investments LLC - a holding group with diverse business interests ranging from multinational companies, automotive, retail, schooling, leasing and real estate interests.
Related links
Al Khayyat Group
NZX Announcement NBR: Burger Fuel signs franchise deal in Dubai YAHOO:Burger Fuel moves to Dubai
Burgerfuel website
It will be interesting to see the terms of the agreement, presumably it will be similar to the individual franchise agreements operated in New Zealand, Burger Fuel's home. If the Arab franchisees plunck their oil money down and really go for it, then possible investors in Burger Fuel here may get a better picture on how successful the Burger Fuel Franchise operator will fare.
Since the listed company will derive its income from ongoing royalties, currently too small to make any profit on overheads, the development of a larger group of stores will be a good indicator of the company and its long term future.
Personally, I'm still a little skeptical as to why Josef Roberts, executive director of Burger Fuel, and his fellow directors may have leaped so far across the world with their concept before developing it more fully and profitably in Australia.
Two company owned stores in Sydney just isn't a good indicator for future success outside the Australasian market.
I have so many questions about this move I have made a request to Josef ,via email , to flesh out some of the detail of today's announcement. I'm curious as to whether the Dubai company made the first move or if it was Burger Fuel's initiative.
I know there is plenty of interest about this company because every bit of news about Burger Fuel is googled incessantly, this site got alot of BF related traffic today, including a handful from Dubai, possibly kiwi ex pats.
Save for more positive concrete numbers or an indicator that things are improving financially and that the Franchisor business model will work with this type of high end food business, I clearly remain negative on the company when it comes to its present valuation of just under NZ $30 million.
Some questions need to be answered to reassure investors that management are heading in the right direction, given today's surprise announcement.
Hopefully, even though I have been critical of his baby, Josef will return my email. He has been great so far.
Burger Fuel shares were untraded at closing today, which isn't unusual. They last traded April 29 @ 45c.
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