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Gold Brands Investments Limited - Gold Brands Grants Chesanyama Master License

Release Date: 14/02/2018 14:52
Code(s): GBI
 
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Gold Brands Grants Chesanyama Master License

GOLD BRANDS INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration Number: 2015/168426/06
Share code on the JSE: GBI
ISIN: ZAE 000212791
(“Gold Brands” OR “GBI” or “the Company”)

GOLD BRANDS GRANTS CHESANYAMA MASTER LICENSE

Introduction

Shareholders are advised that GBI has entered into a development agreement with Mr. D. Nathanael (“the Master
Franchisor”), a related party, in terms of which the Master Franchisor will have the exclusive right of development
of Chesanyama in all countries outside Africa. The Master Franchisor will own exclusive rights to roll-out and
franchise the Chesanyama concept and GBI will be the exclusive supplier to the Master Franchisor

Background information on Chesanyama

Chesanyama is a traditional South African braai concept, previously only seen in back gardens and township street
corners, which was introduced into the mainstream market by GBI. Chesanyama offers customers the best flame-
grilled mature A-grade meats, and serves them up with its delicious traditional pap and authentic relish, or tasty
freshly cut chips.

Established in 2012, the Chesanyama brand has become the fastest growing franchise in South Africa. The
Chesanyama success has been built on the support provided by the head office making things simpler for their
franchisees by means of a one-stop distribution centre, its own central kitchen and in-house professional butchers.

The innovative Chesanyama business model had been carefully designed to offer customers authentic, sizzling,
meaty meals, resulting in high volume sales, satisfied appetites and an excellent return on investment.

Rationale

GBI wishes to expand its restaurant network internationally whilst maintaining its standards and reputation
domestically. It has therefore granted the abovementioned rights to the Master Franchisor for the roll-out of the
brand internationally. The Master Franchisor will pay GBI a consideration of £500,000 for the master license and
will be obliged to pay GBI New Restaurant opening fees of £15,000 per store and Royalty fees of 6% of net sales
per company owned store and 50% of the fees mentioned above per sub-franchised store. The Master Franchisor
is obliged to open a minimum of two stores in year 1, three stores in year 2 and five stores for each year thereafter.

Categorisation

The granting of a master franchise license is in the ordinary course of business and is not reportable in terms of
the JSE Listings Requirements as it falls within the ambit of paragraph 9.1(d) of the JSE Listings Requirements
which excludes such a grant from the definition of ‘transaction’ if such a grant is in the ordinary course of business.
However, the Board of GBI considers it prudent to inform shareholders of this grant and thus has issued this
voluntary announcement.

Johannesburg
14 February 2018
Corporate and Designated Adviser
River Group

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