Ocean Basket is one of South Africa’s most successful business ventures, with a franchise that spans 109 stores and a brand that’s well known for good quality seafood on a budget. As part of its value proposition to its franchisees, the company plays the role of support partner throughout their relationship. This is probably best evidenced by its provision of a complete ‘turnkey’ store set up service when new stores are opened.
“Where there was literally a shell of a store a couple of months previously, when we hand a store over to its owner, it’s ready to open for business the next day,” says Andrij de Beer, IT manager for the Ocean Basket group.
“Ensuring that sufficient stock for the first week’s trading is provided, that the IT systems needed to process transactions are up and running, that the store has a working set of phone lines, ample menus, cutlery, crockery and that all shop fittings are installed is part of the service,” he explains.
Ocean Basket then takes this a step further by acting as the sole supplier for all of the franchisee’s stock needs thereafter. In many cases, this arrangement also covers the provision of IT advice and support.
While each franchisee owns their IT equipment, de Beer and his team assists stores with the rollout of new technologies as and when franchisees’ IT refresh strategies deem it necessary, and provides the back-end ordering and other line of business systems required for the stores to function.
“Due to the nature of our business, the computing and point of sale equipment used in our stores is subjected to an extremely undesirable set of environmental factors,” de Beer continues.
"The equipment is often required to operate in dusty, sticky and sometimes moist conditions – and those conditions obviously take their toll on the equipment, meaning that a store’s entire IT fleet needs to be replaced at 26-month to 36-month intervals.”
With a replacement cycle this short, de Beer says that amassing the capital required to procure the new IT equipment is a challenge for most of the group’s franchisees.
So three years ago the company began looking at a simpler and more cost effective way for its franchise stores to handle their technology refresh cycles.
Ocean Basket knew that a customised financial solution would have to be crafted, since its requirements were very different from the needs of many of its peers.
Furthermore, de Beer says the support services his department provides to franchisees would be made substantially more manageable if the whole group was dealing with a standardised set of IT brands, a standardised service and support infrastructure to draw on at a vendor-level and ‘one throat to choke’ if something went wrong.
Having heard about the innovative and customisable financial services offered by Faritec through its rental finance division, de Beer says Ocean Basket made the call and investigated what the IT specialists could do to solve these issues.
Faritec responded with a proposition that was perfect for Ocean Basket’s needs – an off-balance sheet rental finance agreement that factored in hardware, software, services and support, as well as a choice of repayment terms.
“The value proposition was in fact so compelling that Faritec’s first ‘customer’ in the Ocean Basket group, was our head office,” de Beer reports.
“Apart from the benefits we derived from the deal, we also had to make a strong statement to our franchisees about our faith in the new arrangement. Subsequently, it has become the defacto standard for new stores and the recommended route forward for all stores undergoing a technology refresh,” he says.
Apart from the financial relief the solution has brought to the Ocean Basket group, de Beer says it has relieved a great deal of the pressure his IT department classically had to contended with.
“We now deal with a single vendor for all of our IT needs right throughout the country and don’t have to battle with different parties for support in some of our outlying areas.
“Procurement has also been eased substantially, since both ourselves and our franchisees have a single price list from which to select IT equipment. All of the items on that list have been chosen and vetted by my IT team at a head office level,” he adds.
De Beer says this gives Ocean Basket a best of both worlds scenario. “We can ensure that control is exercised over the brands and platforms used in each of our stores, leading to more reliability, but at the same time offering franchisees enough choice to feel in control themselves and the ability to structure finance deals individually to their specific needs,” he says.
The upshot of the entire change, says de Beer has been head-office’s IT support overhead being cut by as much as 60%.
“We no longer have to support franchise stores directly,” he says, “and the stores have more reliable IT systems, since they are invariably always close to the cutting edge of what’s available.”
The Ocean Basket group has financed over R10m of its IT fleet over a three year period with Faritec, roughly R85 000 per store and R800 000 for its head-office.
“It’s money we and our franchisees are happy to spend,” he says, “since our IT environment has never been this reliable and cost-effective."