Business Insider Edition

Blacksteer went cheap shisanyama for a while, but new owners say it will get back to the best burgers and ribs again

Phillip de Wet , Business Insider SA
 Jul 20, 2018, 06:06 AM
  • The once famous, 55-year-old Blacksteer dwindled back to just one restaurant recently. It was just sold again, cheap.
  • Blacksteer can be built back up to 50 restaurants, the new owners believe, and regain its reputation for the best burgers and ribs anywhere.
  • They also think it could form the core a new franchising empire – and will soon be looking for franchisees.

Once it was a household name, with a serious claim to the best burgers and ribs of any chain. Then Blacksteer very nearly went extinct – three different times.

But the brand remains strong, the food is back to being somewhere above pretty good, and pretty soon Blacksteer will be at the heart of a national franchise empire, its new owners say.

"We're taking this classic vintage car, Blacksteer, we're polishing it up now, then we'll give it a new paint job and a new engine, and take from there," says Chris van Zyl.

Van Zyl and his brother Danie just bought Blacksteer from the badly struggling listed group Gold Brands, best know for its Chesanyama chain of restaurants.

See also: Chesanyama's owner didn’t pay its taxes last year – but has high hopes for its new Brazilian, US, and French chains

The brothers paid R3.2 million for a Blacksteer chain that now consists of 9 restaurants – even though Gold Brands paid R3.5 million for a considerably smaller footprint before its 2016 listing.

It was, says Van Zyl, a pretty good deal.

Not even the new owners are sure just how many times Blacksteer nearly went out of business; parts of its history was lost as it "changed hands pretty often since the 1980s", says Van Zyl. But it has been at the brink of extinction at least three times.

The original Blacksteer opened in Yeoville in Johannesburg in 1963. It grew to a national chain with big mindshare – and then fell in with really bad company in the 1990s

One owner, Leisurenet, fell apart after fraud that earned its joint CEOs jail time. In the midst of its troubles Leisurenet, at heart a gym company (it owned the forerunner of Virgin Active), tried and failed to sell off its food unit.

Blacksteer was eventually bought out of liquidation by Famous Brands, best known as the owner of Steers and Wimpy. At that point there were 15 Blacksteer outlets. In 2011 Famous Brands launched "Blacksteer Home of Shisanyama", an attempt at making the higher-end brand into a destination for cheap "tummy-fill" meals of pap-and-meat.

That did not go well, and by 2014 Famous Brands listed just one Blacksteer restaurant still open.

In 2015 the brand was bought by Stelio Nathanael – a somewhat notorious franchise kingpin – in a transaction so small Famous Brands did not even disclose its details. Nathanael set out to rebuild it, sometimes using dancing cowgirls to attract potential new franchisees.

In 2016 Nathanael folded his assets into Gold Brands – which this year ran into such financial trouble that its auditors were not sure whether to treat it as a going concern.

Gold Brands promised its shareholders there would be 25 Blacksteer outlets by the end of 2016.

There are, in fact, nine shops right now, of which their corporate vehicle operates five as the franchisee, says Van Zyl. The shops are cash-positive, but as Gold Brands ran into cashflow trouble, the franchisees had to take over the duties of the franchisor anyway. Actually buying the brand just formalised that role.

It also adds immediate scale to the franchise business the brothers were hoping to go big with this October.

Almost a decade ago the Van Zyls left corporate jobs to open a Pizza Perfect outlet. They've been franchisees ever since, most recently opening their second Mike's Kitchen store, and already looking at a third.

But this year they hope to become franchisors, with their own brand Yami Rib & Burger, a sort of Blacksteer for a younger, hipper audience, with occasional live music on Friday nights, first opened a year ago.

There are now seven Yami stores, all company-owned, Van Zyl says, and it is just about to start looking for franchisees. 

Their company is now also looking to purchases a third existing brand, says Van Zyl, with the possibility of opening Blacksteer combo shops: one kitchen serving two different front-end stores.

Even without that brand, the brothers believe there is room in SA for 50 Blacksteers and 50 Yamis, and perhaps a line of non-food franchises he would not yet discuss.

"We're looking to become the next big franchisor," says Van Zyl.

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