Short-term pain for food franchise firms as they bet big on Starbucks, GBK

Taste Holdings and Famous Brands today released year-end financial results, which indicate how big they're betting on global brands such as Starbucks and Gourmet Burger Kitchen (GBK).

During its financial year, Famous Brands acquired the UK's premium burger leader GBK for £120m, in a deal that helped its UK revenue grow to 12% of its total revenue.

Meanwhile, Taste Holdings recorded a core Ebitda loss of R20.8m, and the company's CEO Carlo Gonzaga said "it will take 12 - 24 months to reach real profitability" as it ramps up brands like Starbucks.

Another 10 Starbucks outlets are coming to South Africa in the coming year as the popular coffee brand is set to reach Cape Town and Durban.

Both companies will be hoping that long lines at their Starbucks and GBK stores will turn into bottom-line boosts.