Competing fast food chains join forces
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Two competing fast food franchise chains are joining forces in a brand new merger.
Ali Baba Lebanese Cuisine and Le Wrap have combined their businesses to form the Retail Systems Group (RSG).
RSG will run a stable of 63 stores across Australia, 40 Ali Baba locations and 23 Le Wrap stores. The merger reflects the synergy between the two brands.
Robert Marjan, Ali Baba CEO and RSG director, said “This is the merger of two unique propositions in the food court. We can both learn a lot from each other and grow stronger. It will broaden the reach of both brands and significantly bolster support to franchisees.
“The increased numbers from the merger will increase momentum for RSG,” said Marjan.
“Business tasks are enhanced. Negotiations with landlords and suppliers are more constructive. The franchisees have access to a combined professional team with years of experience to guide and assist them. Marketing benefits and cost savings are able to be combined.”
Kebab franchise Ali Baba was founded in 1979. The family franchise’s success has been built on utilising traditional Arabic herbs and spices, premium ingredients and secret recipes.
Kaan Celik started the Le Wrap business serving healthy, freshly made wraps in 2005 with the aim of creating something “modern and simple”. His hands-on approach has been a key driver of success.
“This merger will open up more opportunities for Le Wrap. We can learn a lot from Ali Baba. Retail Systems Group will operate from a position of power,” said Celik.
It was a question of finding the right partner to combine forces, he added.
“This business is quite simple and it has so much potential.”
The ability to look at each brand with an outsider’s perspective will prove invaluable for the business, he said.
“The increased numbers from the merger will increase momentum for RSG,”
Right now the business is focused on three months of hard work and planning that will lead to refinements across the brands.
Major growth is planned over the next couple of years, with a goal of 100 combined stores in the next 24-36 months.
And Marjan told Inside Franchise Business this merger could be just the beginning for RSG.
“We may have further expansion, depending on how quickly we can get up and running. It could be a successful brand that needs a bit of extra suppport, or a start up, or another major brand we can merge with. We will assess the opportunities.”
Marjan said combining forces was one way to stay competitive in a tough food retail market.
“It’s not the only way, but for businesses with the number of stores we have, it’s an ideal way to be stronger and give us a fighting chance.
“Shopping centres are making it tough.”
RSG is based at the Ali Baba premises in Ingleburn, New South Wales which includes a kitchen for research, development and trials of new products.
Putting both businesses under one roof will provide immediate costs savings, pointed out RSG general manager Harry Malovany.
He is expecting the new business to have greater appeal to franchise buyers, with two options with investment levels from $200,000 to $300,000.
Malovany predicts joint location opportunities will also arise as a result of the merger.
Questions & Answers
Q.What is the primary motivation behind the merger between Ali Baba Lebanese Cuisine and Le Wrap?
What is the primary motivation behind the merger between Ali Baba Lebanese Cuisine and Le Wrap?
The merger aims to broaden the reach of both brands, bolster support for franchisees, and enhance business tasks. It also seeks to increase momentum for the new entity, Retail Systems Group, and stay competitive in a tough food retail market.
Q.What are the immediate benefits expected from combining the two businesses?
What are the immediate benefits expected from combining the two businesses?
Immediate benefits include increased momentum and enhanced business tasks, leading to more constructive negotiations with landlords and suppliers. Franchisees gain access to a combined professional team, and there are marketing benefits and cost savings, including from sharing premises.
Q.What are the growth plans for Retail Systems Group following this merger?
What are the growth plans for Retail Systems Group following this merger?
The Retail Systems Group plans for major growth over the next couple of years, with a goal of reaching 100 combined stores within the next 24-36 months. Further expansion beyond this initial merger is also being considered.
Q.How will the merger potentially affect new franchise buyers?
How will the merger potentially affect new franchise buyers?
The merger is expected to make the new business more appealing to franchise buyers. It will offer two distinct options with investment levels ranging from £200,000 to £300,000, and could create joint location opportunities.
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