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Entrepreneurial masterclass: On location with Brian Altriche of RocoMamas
Prepare yourself to be exposed to an hour of entrepreneurial energy, advice and wisdom. From a guy who left South Africa as a teenager to duck Apartheid’s National Service; fed himself in California by playing his guitar and applying his design talents; and came home to forge a huge success in the toughest business on the planet. Restaurants are an endless juggle between innovation, logistics, staff motivation and profit margins; the hours are impossibly long; customers can be insufferably difficult; and everyone with a recipe book is a potential competitor. And then there’s the ever-present existential threat of accidentally poisoning your customer. Not for the faint hearted. But this heady cocktail is also addictive, as you’ll hear from entrepreneur extraordinaire Brian Altriche. The man behind a business which, although not yet six years old, can already be certified a massive success. I love swapping ideas with fellow entrepreneurs, so jumped at the opportunity when invited to lunch at the original RocoMamas in Malibogwe Drive where Brian and co-founder, chef Paul Dempsey hang out. So kick back and eavesdrop on an hour of discourse on the way South African icon Nando’s influenced him; how a road accident – and books – changed Brian’s life; some straight talking advice for young entrepreneurs and a whole lot more. In short, an entrepreneurial masterclass. Starting, of course, with the idea behind RocoMamas itself – the sensational brand that’s expanded from the humble Malibongwe outlet to 70 more stores in SA and 14 outside the country’s borders… – Alec Hogg
Welcome to The Rational Perspective. I’m Alec Hogg. In this episode, on location with RocoMamas Founder Brian Altriche. Prepare yourself to be exposed to an hour of entrepreneurial energy, advise, and wisdom from a guy who left South Africa as a teenager to duck apartheid’s national service, fed himself in California by playing his guitar and applying some design talents, and then came home to forge a huge success in the toughest business on the planet. Restaurants are an endless juggle between innovation, logistics, staff motivation and profit margins. The hours are impossibly long. Customers can be insufferably difficult and everyone with a recipe book is a potential competitor.
Then, there’s the ever-present existential threat of accidentally poisoning your customers…not for the fainthearted, but this heady cocktail is also addictive, as you’ll hear from the entrepreneur extraordinaire Brian Altriche. The 49-year old is behind a business which, although not yet six years old, can already be certified a massive success. I love swapping ideas with fellow entrepreneurs so I jumped at the opportunity when invited to lunch at the original RocoMamas in Malibongwe Drive where Brian and his co-founder, chef Paul Dempsey tend to hang out most of the time. So, kick back and eavesdrop on an hour of discourse on the way South Africa’s icon Nando’s influenced Brian, how a road accident and books changed his life, some straight-talking advice for young entrepreneurs, and a whole lot more.
In short, get ready for an entrepreneurial masterclass. We started of course with where the idea for RocoMamas came from – a sensational brand that’s expanded beyond the humble Malibongwe outlet to 70 more stores in South Africa and 14 outside the country’s borders.
I’ve just been this type of individual to keep thinking about ideas, different ways of doing things, solutions, and having fun whilst doing it. But with RocoMamas, I was obviously invested in a couple of Spur franchises. Whilst having Spurs the creativity bug hit me again, I needed to get to doing something and I started some sushi bars. They were quite successful and I enjoyed them, but it wasn’t a place that I could eat every day. I eventually thought I need to find a way to do ribs, burgers, and wings meals from scratch – fast food targeting middle-class – but have it as a casual environment where 45% of turnover is take-out because the cost of occupation is so high – but still being able to give a restaurant experience when people sit down.
I kind of thought about historic places that I’ve been to and where I lived in the States in the late 80’s/1989/1990 and I was inspired by a lot of those little places because I think a lot of American foods… People perceive it as just being the big franchises that we have in SA but Americans have a wild cooking culture. I went to some awesome places and I’ve also always been inspired by Nando’s, having grown up in the south of Johannesburg.
Did you know that first store – the one at the top of Rosettenville Road – the very, very first store?
Yes, Main Street. Yes, I remember that clearly. I used to work in Turffontein up the road and I used to go there during lunchtimes etc. In fact, that was when I was still at school. I had a part-time shop. I was in Damelin when I used to get all my mates from the north to come out to Rosettenville for Nando’s. I’d say, “Come and taste this chicken, guys.” Then, when Savoy opened (it was their second shop), they stole my thunder there. I was a bit upset because I couldn’t get the north boys into the south of Johannesburg but I’ve always been inspired by it. Do you know what I love about Nando’s? It kind of happens to me now, when I see one of our stores internationally. When you’re walking around London or even Washington and you see Nando’s, you feel proud. It’s like there’s this awesome warmth that you get as a South African. I think it’s the greatest brand in our industry that’s been exported and I’m also very inspired by the way the Brozins and the Enthovens have managed to tackle the international market because it is an unforgiving territory. The UK is not easy. The USA, which I’ve been living in, is not easy. Australia’s not easy. It’s tough. It’s very tough and I think that by me being inspired by their model (managing to get it right) – that’s when I talk about inspiration.
We’re sitting in the very first store here in Malibongwe so it’s almost like being in Rosettenville.
Yes, close to my heart.
I talked to Fernando in that first Nando’s store, so this is a similar story. Why this location and why are we sitting here now?
It went through a lot of work. I was doing smash burgers at home and I was smashing (the different blends of mince that I was doing and the recipes on that) and when I finally decided ‘okay, I’ve got the product. I’ve got the menu. I’ve got the name, the branding, and the look’ I wanted to be able to target middle-class. After my sushi bar adventures, I went quite middle/upper income, quite upscale Japanese cuisine with sushi and I realised that it was an easier clientele to get into the business, but not loyal – middle/upper income. They travel and they’re always trying new stuff. They’re adventurous. Middle-class is a very tough market to break into and I kept going to a lot of different sites and turning them down because I felt that they were too upmarket or too low income.
For example, I turned down a lot of sites in Parkhurst because for me, I found that it was too hipster, trendy, and kind of poser-ish in a way and I didn’t want to target that market. I think it’s actually lucky that I didn’t go for that sort of market because it could have made it intimidating to the general public. I think it’s more difficult to go from a trendy brand into the general public than vice versa. I chose this. I had about 37/38 different sites that I was driving around to but I’d come on a Tuesday night to the sites. I had a little timetable. I’d come different mornings, Friday evenings, Sunday lunch, and I’d try to see the flow of what was happening next door, the profile of the customer and I thought ‘okay, if I’m going to make it, I’m going to make it here.’ So, there were a lot of failures here.
In this building?
Yes, in this site. First, there was a Greek fisherman that closed down after failing. They moved across to North Riding. They’re still going there. Anat failed here. Two ‘fish & chips’, which is your old cheapo’s failed here and then I finally came here.
For people who don’t know this area, describe it to someone who’s maybe sitting in another part of the world because obviously, these podcasts are listened to everywhere.
I’d say it’s very middle-class, more industrial business. When you go down the road, there are industrial parks.
Yes, I’d say blue collar, clerks, some middle management and maybe big corporates – not car dealerships. It depends on how far up the road you are but you could even go to middle/lower if you go to the right, down that side of the road but we don’t generally attract those customers.
Okay, so why? Why did you decide on this area?
Because for me, it’s true middle-class – true South African middle-class – but it would be difficult for some of your listeners to understand in some of the more first-world markets. In a first-world market, they’re just not having kids or they have 1.1 kids per married couple. Here, people still have kids but both couples are working so it is tough and people sit in 3-hour traffic. It is frightening to try to get that little bit of their mind-space. For them to even try another brand, is frightening. That’s so difficult and I needed a break through with that. That was very important for me. I needed to under-promise and over-deliver for them because I find that the middle-class is very neglected in our industry.
In our country or in the world? Ask the Donald Trump supporters.
In the world. I think the reality of it is that it’s not about Trump. Somebody voted him in. People are not being heard. They’re not being listened to and that frustration is important. The same thing in food and how it’s taken for granted…and I’m passionate about doing fast-food with the proper input products – doing it the proper way because all these things like illness and obesity gets blamed. It’s a blame game that gets played but I think a lot of it has to do with how intelligent a lot of these food technologists etc. became and they have these massive brands that do food and serve food. They needed to provide the simplest and quickest way, but then its mass produced and they started using a lot of stuff like modified corn-starch and high fructose corn syrup. I think that if you break down a lot of these diseases (they’ve got sugar tax on there), I actually don’t think that’s a problem, personally.
I think it’s the way it’s processed. But what we do here, for instance… I have a saying when we do menu items and the like. I always say it must be quality and purpose before price. Trying to get price from the middle-class by doing that is difficult as hell but we do it so we’re slightly less profitable I suppose, as a franchise because we work on a slightly higher cost of sale but as we gain scale, I’m now able to start working in a different way to try to achieve this. I’ll give you an example. I want to be free-range grass-fed. In the beginning, when you start off, you’re going to pay a premium but then you can’t target middle-class on the pricing. So, I built a scale now and we’re engaging with farmers directly because we say, “We’ll buy, but this is how you’re going to treat.” I think Woolworths has got that market quite sorted.
This is the journey we’re on now. The pain that we’ve had to take in the first five years (because we generally ran – for gram – maybe five percent more expensive than our competitors. Maybe not even some of the other competitors but the mainstream guys). We’re maybe 15% more expensive than them but we are still in middle-class prices.
Where did you get this? Because today, many people do get it, that the next big tobacco is big food because when you’re starting a business, there are many other things on your mind rather than ‘hey, let’s go with grass-fed. Let’s go with more organic food.’
Obviously, my daughters have had a privileged upbringing, went to private schools etc., and I looked at them and their peers still going to the main ‘bad for you’ fast-food joints. Even though there are some offerings that are perceived healthier, but they’re not sexy and I think this is something that people don’t realise: a teenager is going to be rebellious in many different ways and one of the ways is that they also want to consume what a lot of us grew up on. So, we can sit and be all holy about what we put in our bodies now, but a lot of us that are over 50 (I’m 49 – on the cusp)…we grew up with this type of food. So, maybe not to such an extent in South Africa, but I realised that living in the States (but we had sanctions here, although we generally still had it if we were in an urban environment like Johannesburg and the like).
When I saw my daughters’ generation still going out and buying the stuff, I saw an opportunity and then, having been in the game and in the industry, I said, “Well, how do I run a business that does make good food, fresh and try to deliver what the world is moving towards with regard to organic food?” Organic was a big thing a couple of years ago, but now you hardly find it at Woolworths because the company who was doing organic, was milking Woolworths. I always said it should be that way because that’s how I grew up. We grew up that way. I remember we used to have go and collect milk in these aluminium-looking stainless-steel drums. When you took off the top, all the curd was there. My mother used to have to take the curd off. That’s all we consumed. That was organic.
It’s very difficult to make those claims if you cannot have the market. The market’s too small and it makes it very expensive. I just saw an opportunity. I’ll never promise that it is grass-fed free-range but to the best of my ability, I want traceability, which we have got but I’ve never promised that and I think that’s helped us grow because 10% have asked those questions, I’ve answered and said, “Well, it’s not free-range grass-fed but I’m working towards it.” Maybe out of that 10%, 20% say, “Well, I’m not going to consume it.’ Well, then go and find your organic grass-fed. I hope it’s not a lie but at least, you know we’re working towards that. The other 80% value the fact that we’re working towards it. We’re doing the same thing with vegan at the moment. I really want to be able to do it for the right reason, and not just monetise it. A lot of guys are jumping on the bandwagon with…
Vegan’s booming all over the world.
It is booming but also, you have to be very careful as to why we want to do it. We’ve had vegan from Day One but the difference is now, vegan’s booming because they want a meat replacement. I’ve got one here that we’ve done, actually. The other day, I had somebody say it was meat. They said we gave them meat so now, I’ve got to sit here and say, (because we’re trialing it), “How do I do it where it’s only 5% maybe of our sales? How do I do it now with them to not think that it was meat?” because I had a vegan say that it was meat and it’s not. We’re playing around with it, similar to what The Impossible Burger and Beyond Meats is doing. We’re doing it in labs as well, onto trial, get a fresh product that’s done properly but it’s purely plant-based. So, we’re trialing it and we’ve had this complaint.
So now, I’m actually going to smash it into a square patty so people can see that if it’s square, it will be vegan. But that is the way. They want a meat substitute, not necessarily just a vegan one. My sister was a vegan for many years. My sister’s in her mid-forties. From the age of 13, she was a vegetarian and from 17, she was a vegan for the same reasons that the millennials are demanding it now: for the environment and animal welfare. For me, it’s not new in my family because I saw it growing up. Whether it’s healthy is another choice. I think that’s a dangerous thing that they open up because I’ve yet to meet somebody that’s a vegan, that’s been a vegan for over 20 years, that’s healthy. We’ve got to have a conscience when we push these things as businesspeople.
What I’m getting from this conversation so far, is that you really pay a lot of attention to the detail. Just go back a little bit, for the detail of people who want to get to know you. At 16, you had an entrepreneurial spirit already. What were you doing then? What were you doing that was different to perhaps, the kids in your class?
I was always a dreamer. That’s what the teachers always said. I tinker, although I never used to finish. As a youngster, I had a problem with that. I’d come up with ideas and mess around with it but as soon as it bored me, I’d leave it and I’d drop it. When I was younger at school and I was doing arts and playing guitar, I had a lot of interests that would take my eye off that ball. So, I’d want to invent something or do something and I’d get 60% of the way there, and then I’d drop it. So, it was a bad trait that I had and I think that as you go through life, things happen. Even in my early 20’s, I’d start businesses that become successful but I’d use the profit to go party and I didn’t follow things through. Firstly, I learned a lot in the States when I was there.
What took you there?
To dodge the army, I just got out of here. I was working on oil rigs for gold exploration, made some good money during my matric year during holidays. They were American-based. I paid for my ticket and I bailed. During those years, there was no internet and computers for the military to see where you were (or the government) so I just sent a letter that I’m going to go and study. My mom signed it and off I went.
But you did study.
I didn’t study.
But you studied the world.
Yes, the university of life.
You never went to university.
Nada. Nothing. When I ended up in the States, I think that it was just like leaving apartheid South Africa. You’re suddenly out of the bubble. My young mind was like a sponge, I suppose. Just as a 3/4/5/6/7-year-old kid who just absorbs, here I was at 18/19, leaving a very conservative country (frustrated, maybe). I was a big rebel and a naughty kid/teenager… Going there and the Americans in Los Angeles embraced us. The two of us went: Paul is actually a joint founder of RocoMamas. He’s a chef. He’s done some of the stuff for me. He went with me – also dodged the army. I think that the Americans were scared of us because we saw this freedom as ‘no rules freedom’ and we learned our lesson there; that there are rules. Anyway, that rationality and having a pragmatic approach to business was very important.
Having the colours and the looseness of creativity is one thing but throughout my early life and even into my mid-twenties, I was irresponsible with business because I never balanced the books and that’s not success. You can’t achieve success with that. It’s also being selfish because I started employing people and then I’d realise I need to pay these people but you’re being irresponsible with your business and so I learned a lot of lessons in my mid-twenties. Then I had a bad car accident and that woke me up quite a bit. Whilst I was incapacitated, a couple of mates gave me these self-help books because I was a little bit depressed because I nearly lost my arm, so I wasn’t going to be able to play guitar. I had a head injury. I had scars. I had a broken leg and I’m a very effervescent individual.
I’m a get up and go type of person. I’d just want to get things done that I’d distort reality with trying to get things done and being bedridden in a hospital, I started reading some of these books and some of them were fundamental for me. E.g. How you need to harness your positivity, but how you also need to be responsible with success and understand that it’s not just about you on this journey. Thereafter, I did tinker around with a couple of failed ventures. The one was a franchise.
What kind of books? What changed your mind there?
Okay, so I read Think and grow Rich by Napoleon Hill – quite a few of those stories. I read another book that really blew me away. Unfortunately, I don’t know the name. It was a book about a guy who was… From poverty in New York City, he became a porter at an upscale hotel and refused to take tips from the rich, wealthy, and powerful in New York City. Eventually, he was invited onto their yachts and all the parties. He was the only bellboy/porter that was mingling with these guys. Eventually, one of these guys gave him a job in his listed company as a Personnel Director. What I always remember about him was that he had a ‘can do’ attitude and his bosses’ company was going to unveil a bust of Thomas Edison in Florida, New York. His boss said, “Get one of the top sculptors in New York City to do this thing.”
I wish I knew this book because I told people the story and I’d love to re-read it because I was young when I read it. He finally went and he got the top sculptor in New York art scene to do it and everybody said, “Don’t disturb the guy.” Three weeks before they had to unveil it, he went to go and look for the guy and the guy was a drug addict and he had done nothing. So, this particular ex-porter/bellboy went and bought books, bought clay and everything and he, himself did the bust. He’d never done sculpturing, art, or anything like that. By the time they actually flew this thing down to the institute in Florida (and they’ve got a photo of it in the book – it’s still there), I’m gobsmacked at how realistic it looks. He did it and he was credited for that. I loved that because that attitude… It just shows you that with attitude, anything is possible.
Obviously, I also read the one book, which was given to me by a mate of mine who died tragically three years ago in a home invasion. It was a book called Awaken the Giant Within by Anthony Robins. Then, I got very into reading company stories. Thereafter, I read For God, Country, and Coca-Cola. I read the Benneton Story. I’ve read The Chocolate Wars – Hershey, Mars. I read the King/Gillette Book, Macdonald’s books… I’ve read a lot about business books/business histories and I love circumstance and how that’s part of business. For instance, I don’t know if you’ve ever read the Benneton Book?
Luciano Benneton is inspirational for me because even their marketing right through to the 80’s, was done by Toscani (the photographer) who was actually a guy who was friends with Luciano Benneton who took photos at the end of WW2 (I think) of Mussolini when they overthrew Mussolini and his girlfriend. I love the Italian industrial revolution, if you can call it that because they grew from those villages out so Fiat, Benneton and all these Italian companies – to this day – employed from the villages. They didn’t industrialise urban Italy and Luciano Benneton was working in a clothing shop, and his sister was knitting little jumpers. After the war, they had a lot of males that had been killed because of the war but then also, when the GI’s liberated them, they also let a lot of the Mafioso out of jail, thinking that they were war prisoners.
Such a lot of the young kids were killed. Elderly male adults were killed. Everybody was wearing black in Italy. She couldn’t get black fabric or black wool so she was knitting in these funny colours, which were like pale yellow and reds, etc. and Luciano was working in a tailor. He asked his bosses if he could just sell some of these jumpers because he was living in his village in a type of squatter camp with his mom and his sister. This thing eventually became one of the biggest sellers in the shop. It got more space and it grew into Benneton. I love stories like that because you look at the circumstance and you say, “Wow.” Imagine if she’d gotten the black wool. All she would have done is knit in black. Malcolm Gladwell is quite interesting. A lot of his books are the way he pulled circumstance together and how he achieved success from circumstance.
And the tinkering, which he talks about a lot in that book…
Yes, tinkering. So, For God, Country, and Coca-Cola, it was very similar Asa Candler and his son; the way they grew that brand out and what I like is that I believe that if you look at modern day couriering services e.g., I think that they grew out of (like) any business that happens – a revolution that happens. For Coca-Cola, they needed to get point-of-sale materials to all their little shops that they were supplying. Somebody said, “I’m going to do that and become a courier service” because they couldn’t use the postal service. It took too long. I love trying to understand what the relationship is between consumer and brand, and how that relationship differs between us as human beings. So, I’ve looked at it as ‘love at first sight’. Your name needs to intrigue the customer. Then, you go into infatuation. Eventually, you get into the dating phase.
This is the product lifecycle and eventually, you get into getting engaged. So, you have the courtship, getting engaged, eventually marriage, and you’ve got to reinvent yourself completely to understand that that is the relationship between customer and brand. It’s exactly the same. So, if it’s a one-night stand, it’s a fleeting brand.
What happened after this very first RocoMamas that we’re sitting in now? Where did the story go from there? How many outlets do you have today?
Locally: in South Africa, I have 71.
Seventy-one. In how long?
Just over five-and-a-half years.
Did you expect that kind of growth?
Alec, I love working but I was heavily involved here so even though I had my other businesses, I’d get here and I’d spend time here because I needed to understand whether this thing is going to go somewhere. I think it’s like mental KPR’s because you have your gut feeling but you also need to understand consumer behaviour and see how the customers pick up on this thing. For instance, slow start: I have to get the food. I was smashing the burgers in the beginning. Paul Dempsey (my co-founder) was doing the ribs side of things. I brought a couple of my guys from my Spurs to help me with service and we trained people. I said, “Guys, don’t charge.” Obviously, people just started charging. People wanted to pay and that’s how we started, but it was very slow. We started slow and eventually I moved to the…
“Visualisation is a very important part of starting out. It makes it tangible.” @rocomamas founder Brian Altriche shares advice for startups. #WeAreSME
— Marnus Broodryk (@marnusbroodryk) October 30, 2018
What do you mean ‘don’t charge’?
I said, “Just give it to the guys when the customers come.” We need to find our feet. I hadn’t trained anybody besides guys who had been with me for years, that had maybe been in an Ocean Basket or in the sushi bar or a Spur. Slowly, but surely, we got it going. Within about two weeks, I started saying, “Okay, now we’re ready to start pushing it a bit.” I got the personality that I wanted and the playlist that I wanted so a lot of the touchpoints were ready now. I had the right faces in the right places, and I could start engaging with customers. At that point, there are quite a few people in this store that were here from Day One. The one lady left to go and open quite a few shops. She was a cashier here. I’ve just brought her back as a manageress here and it’s like coming home for her.
But she and another waiter that’s here would also remind me and say, “Listen, you used to do this. Remember, you used to tell us to remember the customer’s names?” Proper hospitality, you know. Even though it’s a takeout joint. It was quite a bit smaller than this. Anyway, once I had time to be able to engage with customers, I started picking up something. I’ll give you a perfect example. Friday lunchtime (I think it was about our second or third Friday), we had lunch trade coming in. Guys from DSTV MultiChoice. That Friday night (because I had spent time on the floor and I had effervescence and there was a vibe)…that Friday night, we had five tables that had brought their mates or their partners from lunch so I thought ‘okay, there’s something here’, so I started monitoring that.
The repeat visits were so much, it would blow me away. We’d sit here lunchtime. We only had 12 tables then. We’d sit here at lunch and then we were doing takeaways as well. I did that from the beginning. As people came in, I’d say, “Eat in or takeout?” “Oh, you do takeaway?” “Yes”, because I wanted to push that because takeaway is a very difficult game to break into – very difficult. Anyway, I started monitoring how many people would come back twice a day. Now, that’s quite something. You start something and you come back twice a day for a meal and every day, we were getting somebody revisiting twice a day. Then I realised that this is going to be big. I need to structure this thing properly. After about three months, I had guys wanting franchises that I turned down. I wouldn’t do franchises.
I said, “I cannot take your money without having the support.” It’s impossible. I’m going to kak this thing out big time. I need to be able to do this properly. Then I had some of our other listed firms coming to try and engage with me. I had some mates of mine that wanted to put some private equity together. Yes, I had a lot of people approach me. I had some corporates approaching me.
An ultimate freedom, but not for everyone. Don't define your business by money, the money will come. Wise words from @rocomamas Brian Altriche #entrepreneurship
— Gaylin Jee (@GaylinJee) January 18, 2018
So, you knew you had something big there.
I knew I had something big and then I eventually said, “Let me open the first couple of shops first”, so I did Fourways as my second shop, which I think we opened about just under a year after this shop.
But Brian, you never took money from anyone? Did you use your own money?
No. I always used my own money.
Because I was scared of it being a one-hit wonder and I believe in capitalism. I believe that you need to take risks to get a reward but if I cannot offer you the proper infrastructure of franchising to make it less of a chance of you failing – especially in such a tough game – I’d rather…. A company like Spur, Famous Brands, or McDonald’s e.g.: these guys have masses and hundreds of hours’ worth of training and different scenarios of years of systems that assist the franchisee to be able to become successful. I’ve been a Spur franchisee for 14 years and I often used to joke with mates. I used to say, “Spur is a company that can take a farmer and make him a restauranteur”. It is so to the point. Everything is KPI’d. Every part of the business has got training that I would maybe assume that you’d know, so I walked away.
That’s detail, again.
Yes. I think that trust is such an important thing in life and people take it for granted. I wouldn’t want to break down peoples’ trust. I’m the type of person that would say, “I’m scared I’m going to lose a customer so I’m going to engage with you for franchising but are you still going to be our customer – you, your mates, and your family?”
When did that all change?
Well, I opened Fourways. I did the designs and the ideas. I put the money down. I had a family member of mine (my brother-in-law) who said he wants to do it. I said, “Okay, I won’t charge you franchise fees. Do it”, but I knew he knew the game so he did that, and then I opened Rivonia. I owned all the stores and then I started charging franchise fees from the stores to a holding company and I started engaging with Pierre van Tonder from Spur. They showed interest and I said, “Okay. Can I use some of the IP?” and Pierre gave me his blessing to start using some of the IP and start engaging with franchisees before we did a deal, which I thought was very good of them because it allowed me to start confidently saying, “I can give you training”. I started signing franchisees based on that. I think I opened one store and then I did a deal with Spur.
They’d just opened and already, I was able to give them all the training and all the documentation. It was almost like… I can’t explain it here. It was almost like this: had we done the deal and then tried to play catch-up, it would have been a problem. Because I had all the IP and it was given to me by Spur Corp, I changed it to RocoMamas and I spent a lot of hours doing that, and the franchise agreement. I didn’t even have to get them to change franchise agreements. I already had it.
"Failure and risk are part of the equation of success" – Brian Altriche (@rocomamas Founder)
— W a l t e r (@walterthamaha) June 25, 2017
But why do a deal then, when you’ve done all the hard work?
Because you need the people. There’s a big difference. It’s human capital. Becoming like Spur…you wouldn’t be able to develop that in five years. There have been a lot of failures in this industry. Even of late, we’ve seen a lot of guys that are battling – going back to the market for money etc. I mean it’s common knowledge. I can mention some names, hey. Taste Holdings, which is Dominos and Starbucks: there are massive problems. The market knows about it. I believe they don’t understand company-owned stores like Nando’s do. Gold Brands is another one. They went and sold a lot of franchises. I think at one stage; they were just opening up these things everywhere – 200/250 of them. They’re sitting now at about 60. In places that I trade, I’ve seen 3 or 4 of four, close down within 6 months. There’s a lot of human capital, experience, and theoretical training that goes into this and that’s why I did a deal.
What happened then, once you brought Spur in? Clearly, you knew the Spur people. You knew Allen Ambor and Pierre van Tonder, and understood what they could bring to the party for you. If you stepped away a little bit and had you continued doing it yourself, what would the difference have been today?
I think I would have had one or two failures within the first two years because with the big corporates, you also get preferential landlord dealings and sites, even. It is what it is. Had I done it differently, I would most probably have owned all of them. Even though I’d entered into one franchise agreement, it was because I knew I was going to do something with Spur but I would have most probably owned them all, which would have meant a lot slower growth. After about my third store, I started getting a lot of copycats copying me and some of them had the money, the know-how, and the scale to be able to roll these things out and I think that maybe they wouldn’t have had that exact essence of what we have at RocoMamas but they would have taken something and they would have been first-to-market then. I think that we even had some of the massive groups go to ‘tick, tick, tick’ menus and try to customise, which is difficult as hell if you haven’t grown with it because it’s not easy providing customised product for a customer. That, we evolved into. Thank God. We’ve had a lot of guys try to copy us, but you can’t do it.
You have no regrets, looking back?
No. No regrets and I’ll tell you something. After the amount of failures that I have had in life, I think I wanted to have… I understand why there are [unsure 16/60 0:40:04.4] in PE and why corporates pay 60 months/five years to the small guy and why if I had to sell the business to you, it’s only three years. It’s because of risk. My family, my partner (Paul) who is a partner in the business, and I… So, my wife, my girls, myself, my partner, his wife, and his girls are more secure because we have a big partner that is listed, that is honourable, that if I had to die, I know that my 25% shareholding is secure. Paul would know that his 5% shareholding is secure and for the investments that people have invested in the brand – that their investments are secure. That is so important. It’s an infrastructure throughout the whole of South Africa and into Africa that we’re managing to provide the management skill from a head office level and a marketing skill that these franchisees pay us. There are a lot of rogue franchisors out there that take the money from these franchisees and don’t provide them that. I think that that’s what’s important and I’ve got a conscience. I often say Paul must also sometimes be interviewed because he’s a lovely guy and he’s just like me in that way. He’s got a conscience. We don’t just want to go out there and do people in.
It’s a lovely story but when did you know that it was time to do that deal?
I actually wanted to do the deal before we opened the first shop because I wanted to be able to…but I was also… My idealistic no-fail attitude… I said, “Let’s just do it. I’ll give you guys half of it” because I first mentioned that I’m going to do this to Pierre and Kevin (a couple of the board guys). Pierre said, “Go and make it a success and I’d rather buy it from you.” Within the first two weeks, I knew we were going to do something eventually. Pierre and the guys came to visit me and Pierre said to me, “You’ve got work to do.” They came here within the first two weeks as well. I wasn’t ready yet. I wasn’t professional enough, so Pierre said, “You’ve got work to do and when you get to your third shop, I’ll come buy it from you.”
How did you know they were the right partners?
Because I had a negative experience with one of the other major groups when I was a lot younger and I believe that it’s in your DNA. If things are…
What was it? Don’t go into detail, but gives us a sense.
I opened a franchise and I felt that I was done in. They didn’t provide me with what I paid for as a franchisor and it was a failure. Yes. Risk and reward and it’s capitalism. I’m willing to accept that. I just felt that I was overcharged and I felt like there’s a culture of that I believe, they would be as they’ve grown over the years, that I wouldn’t have entertained. I wouldn’t have done a deal with them anyway. One thing about Spur is from when I first met the guys and I opened my first Spur, I found them 100% honest. It’s a company of integrity. That was then. Me, as a franchisee, felt that. Personally, as a full-service restaurant of the most successful in the country…I mean, we’ve been going for 52/53 years.
What happens now? You’re 49. You still have lots of energy. You’re still very passionate about the brand – 71 stores in South Africa. You talked earlier about international.
Yes. I think we’re sitting on 14 international restaurants.
We’ve got 3 in Mauritius. We have one in Zimbabwe. It’s about to build our second one. Botswana and Namibia. Kenya is busy with a second one. Namibia is busy with a second one. We have two in Saudi Arabia. We’re busy building three more in Saudi Arabia. In Cyprus, we have one. We’re soon to start our second one. In India, we have one.
How much of that do you get personally involved with?
Look, in the beginning, I didn’t really. Ironically, we had a board meeting now. I just got back from Cape Town. On Monday, we had a meeting and Pierre van Tonder, Mark Foley and myself want to actually go away for a day or two and sit down and strategize how we’re going to do this RocoMamas international rollout.
Are you learning from the Endhovens?
I think so. I found Nando’s a very altruistic company, so we engaged quite a bit and had I listened to [inaudible 0:45:06.5] Robbie and then also Pierre and I met with Geoff White for lunch about just under a year ago… I’ve dealt with Mike Denoon who did a lot of the international rollouts and ironically, one of my franchisees is Brian Sacks. He invested because he loves the brand and he’s retired now from Nando’s but he just understands the game big time. I engaged with them quite a bit and they warned me about certain markets that I shouldn’t have gone into, be prudent and understand that you are going to fail in certain markets. I found Australia tough as if Spur themselves haven’t found it tough in 20-odd years. We’ll find a way to do it but we’ll do it more the Nando’s done it. Because they’ve had the failures, the successes, and they have an altruistic way about them…Now, they’re not a listed company. They’re private and they don’t mind sharing information. We need to use that information to the best of our ability. We spent 2/3 hours with Mike Denoon at the Nando’s Head Office about international expansion, about the difficulties of it, and we still went into India. India’s not an easy market. Now, we’re there but it cost money to be there whereas Saudi Arabia; as you’re opening more stores, you start to break even internationally, quicker. I love Africa and I often say the best thing to do is do it within one or two hours of your time zone. These international time zones i.e. Australia… I was chatting to the Australian franchisee 10 minutes before you came and did the interview here. You just can’t action things quickly enough. You’ve got to be very careful on how you grow. Upper Africa into the Middle East and into Cyprus and that sort of neck of the woods – I’m happy.
Brian, what keeps you interested in this business?
I love it. I think what keeps me interested is that when I did the deal, I explained to Pierre that I don’t want to be policed. I’m a free spirit. I’ve always worked for myself. I’ve never had a boss. If I have to clock in and out, I don’t want to do a deal. I said, “If you want to do a deal, you need to believe in what I can do and you have to give me executive powers to be able to achieve this” because yes, operationally, there are things that Spur would be able to do way better than I could do with the infrastructure they’ve got but when it’s anything from that kitchen onwards, I want to be able to do it. I don’t want to buy sources in forced to… I still want to make stuff in the store and I want to be able to play in that way. Pierre said, “I don’t want to break anything that you’ve got” and that in itself feels like I’m still building the business.
The brand champion…
All the time. Before you came here… I’ve got my notebook and I was sitting with my chef. I’ve got Paul who is one of the chefs and I’ve got Anna, who is somewhere. She’s floating at the back here. I said, “My next thing now is I’m busy with certain things that I want to do so” so I think about things all the time. I don’t just think about marketing ideas and social media. I think about what I can do in-store. So, I thought ‘okay, I want to make even fresher mince. How can I do that?’ So, okay. I found a way that I can get a recipe of my meat cuts and I’m going to mince it fresh every day in the store. So, now we’ve been doing that here. We’ve been doing 50/50 but not we’re starting to do it – from tomorrow – fulltime. You don’t understand the difference in quality. I’ve never wanted to be frozen. We’re not frozen but we’re still getting mince for us with our recipe.
That’s the problem with franchise. You’ve got to be very careful with what you allow the franchisee to do because they’ll also just go and do anything and mince it. I’ve managed to find a way to cryo-vac the thing – never frozen. The longer it stays, it’s like aged meat and I can now use my recipe and mince at ever store. But then, I go one step further and say, “I want to do my rolls fresh every day – my own recipe. I don’t want to have it brought in. I actually want to bake them here.” And we’re fast food. Nobody else does that in the fast-food game – nobody else. I love doing it.
So, there’s a lot of potential, pretty much everywhere. What young guys, who do have an entrepreneurial spirit and they’re what you were at, at 16… What would you advise them if they said, “Uncle Brian – Oom – how do I follow in your footsteps?”
Stick [inaudible 0:50:13.3]. I think that what worries me about the new economy is we’ve all seen the Uber IPO and I look at a lot of these things. I was watching that thing about inventor or something about Elizabeth Holmes out in Silicon Valley or whatever. I think that there are fundamentals in business and I think that it’s important that these youngsters understand that fundamentally, a business has to make a profit. I don’t know how long shareholders are going to keep bailing out a lot of these new-age businesses who just say, “One day, we’re going to make a profit.” When is that one day? There’s a fundamental understanding that if you want to do a business, you need to make a profit because what’s happening, I think, is a problem in business with youngsters. Everybody looks at wanting to be the next Silicon Valley. The Silicon Valley throws stupid money around for any idea that could be successful. It could have a ten percent chance of being successful in the not too distant future, but in maybe 20/30- or 40-years’ time. That does not create jobs in my mind. So, what happens is a lot of these youngsters come into business and they actually think that people are going to throw money at them but they need a sustainable business and I see some business plans that some youngsters… I mentor some youngsters and I say, “You’ve got to tell the investor – even if it’s an angel investor (they’re a venture capitalist – they’re still going to want to know in this world here, how you’re going to make money. You have to convince them and I think a lot of people give up on that. I have a saying. I believe 95% of people that are formerly employed today, wish to work for themselves. Out of that 95%, 5% will try to work for themselves – become entrepreneurs. Out of those 5% that try, 95% fail and out of those 95% that fail, only 5% try again and those are the ones that succeed and that is a sliver.
It’s bad. Those are terrible odds. Why do you think they’re so bad? Is the system just rigged?
Are people lazy? What is it? What makes the difference?
People want instant gratification. I don’t think people want to bear the responsibility, to understand what it takes to do business. It’s not a 9-5 job. Even in an office environment, you see those individuals that just ‘get it’; they’re in early. They leave late. They’re going to go somewhere. It’s just the more time you put into something, the quicker you’re going to get there.
Yes, and the responsibility that you take on that. We are burdened with that as human beings and there’s nothing better than that. A lot of youngsters don’t want the responsibility. But then, how are you going go achieve any form of success? That’s (1). I think a lot of them say ‘but there’s no money to invest’. I think that there is money to invest but I think that a lot of attitudes of these youngsters… They don’t realise that they’re… The investors got cold with purely how la-de-da these youngsters ae with regards to how they’re going to achieve this. It is not la-de-da. You can have all the pouffe cushions and the pool tables in your office, and you’re living a free-spirited life (what they say is the millennial way) but you’ve still got to run a business. You have to have a product. You have to solve a problem and you’ve got to be able to eventually, get some sort of profit – eventually.
Are your daughters in business?
My oldest is studying at UCT – BSc. My youngster is doing matric this year. My oldest is very into studying and she wants to go and do medicine and biochemistry etc. It interests her. So, I don’t see her being in the business but my youngster, I do. She looks at things slightly differently. She wants to find ways to monetize. She wants to be an architect but she also likes industrial design and wants to solve problems. She wants to find solutions for problems that irritate her and then she also thinks about how she can monetize that.
Isn’t that what an entrepreneur is? Finding solutions to problems that irritate you…
Yes, but then you still have to go out and do it.
To close off with; when people come into RocoMamas, the guys who are listening to this podcast are at an advantage because they now know a little bit more about the background, so what should they be ordering? What’s your favourite on the menu?
RocoMamas is the first restaurant that I’ve been involved in, where I can eat here every day because it’s so ‘wow’. I often say to people, “Our top=selling burgers are BCG – bacon, cheese, and guacamole, and then a bacon and cheese” but a lot of people come make their own and it depends on what I feel like. We have these new things that we’re trying called smash stacks, which are…where you’ve lost the burger bun but we’ve actually created an upside-down smash. Are we going to eat some lunch?
That’s what I’m going to have.
Yes. We’re going to try some different stuff. Be brave and try something different. We human beings are also… we’re not spontaneous. We don’t take risks and it’s sad. We’re almost automatic and when you come to RocoMamas, you need to try – just step out and try something different because you can customise anything but it’s got to be a smash burger and it’s got to be made into something wild, and it’s got to have chilli on it.
That was Brian Altriche, a boy from unfashionable south of Johannesburg who refused to conform and clearly, never will. And that, in truth, is the secret sauce needed to create every authentic entrepreneur. This has been The Rational Perspective. Until the next time, cheerio.
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