Oil marketer Vivo Energy, which trades under the Shell brand name, is set to take a 50 percent stake in KFC in East Africa, in a deal with the owners of the fast food franchise Kuku Foods East Africa Holdings.
Vivo has formed a non-fuel joint venture with Kuku Foods East Africa Holdings, the owner of the KFC franchise in East Africa, to manage and expand KFC restaurants in the region.
The joint venture is expected to help the growth of KFC through the opening of new outlets at Vivo’s properties in Kenya, Uganda and Rwanda.
The pan-African seller of Shell and Engen-branded fuels and lubricants announced Thursday that the 50:50 joint venture will manage and operate the restaurants in three markets on behalf of Kuku Foods who will remain the local KFC franchisee.
“Kuku Foods shares our ambition to invest in order to grow the number of restaurants and give more African customers access to the internationally renowned KFC brand,” Vivo Energy CEO Christian Chammas said. Completion of the transaction, subject to standard legal agreements and regulatory approval, will see the joint venture oversee existing restaurants and also work on launching new restaurants in the coming years.
For Vivo, the deal will help it to grow its non-fuel business. Oil marketers are increasingly seeking to attract small consumer-focused business to their properties, a model that is meant to bring them rental income besides boosting fuel sales.
Kuku Foods plans to open first KFC restaurant in Rwanda this year, adding to the 22 restaurants in Kenya and eight in Uganda, mainly located in shopping malls, city centres and service stations.
Vivo said the deal will further ride on its retail footprint to stretch new restaurants into new markets beyond Kenya, Uganda and Rwanda.
However, excluded in this transaction are the five KFC restaurants operated by Kuku Foods in Tanzania and the KFC franchisee in Tanzania.
Vivo pioneered a similar joint venture model in Botswana and Côte d’Ivoire as it seeks to grow non-fuel revenue by riding on evolving needs of customers.