Amid a war over Burger King’s South African owner, this investor says Dunkin’ Donuts and Baskin-Robbins should be shut down

Business Insider SA
Burger King's 80th restaurant in South Africa, at Kolonnade Retail Park.
  • Disgruntled shareholders want to get rid of the existing board of Grand Parade Investments (GPI), which owns the SA franchises of Burger King, Dunkin’ Donuts, and Baskin-Robbins.
  • A list of their grievances has just been published, and includes unhappiness with large payments to directors.
  • One of the shareholders believes Dunkin' Donuts and Baskin-Robbins should be shut down.

Next week, a group of disgruntled shareholders will push for a coup at Grand Parade Investments (GPI), which owns the SA franchises of Burger King, Dunkin’ Donuts and Baskin-Robbins, as well as gaming assets like GrandWest Casino and SunSlots.

The shareholders – which include small fund managers Denker Capital, Rozendal Partners, and Kagiso Asset Management – together own 12% of GPI, but they believe more shareholders will vote with them to vote out longstanding directors.

They have previously requested an extraordinary meeting in October, which was summarily adjourned after one participant objected that he didn’t understand the shareholder complaints.

The disgruntled shareholders then compiled a letter with their grievances, which the JSE requested that GPI release on Wednesday. (An extraordinary meeting is now scheduled for December 5.)

The letter details why the shareholders believe GPI’s share price has lost 70% of its value since 2014.


Their complaints include that some of the directors who have been sitting on the board for more than a decade don't have the necessary expertise to oversee the running of a large food business like Burger King. The unhappy shareholders have a list of preferred directors who they believe should be voted in.

GPI’s co-founder and chair, Hassan Adam, and the board have been blamed for contributing to a massive exodus of execs at GPI, including the loss of two CEOs in the past 18 months, as well as the chief financial officer and the chief executive officer of Burger King South Africa.

The shareholders also object to bonuses of R26 million paid to directors over the past two years, while GPI was suffering losses.

"GPI has some fantastic assets – particularly Sunwest, Sunslots and Burger King," says Paul Whitburn, portfolio manager at Rozendal. After spending more than a billion rand on Burger King over the past seven years, the chain is at last making a small operating profit.

But GPI is not making wise decisions when it comes to allocating capital, buying, and managing new businesses, he adds.

Dunkin’ Donuts and Baskin Robbins should be closed down in South Africa, he believes. The two US franchises together suffered pre-tax headline over the past two years of R87.6 million.

The business case for Baskin-Robbins, which has to import twenty flavours of ice cream and sell it at high prices in South Africa, never made sense, says Whitburn.

And while Dunkin Donuts is popular in the US as a “coffee on the go" outlet for commuters, South Africans are apparently not enamoured with its products.

“And anyway – the world is moving away from sugary products, as health choices evolve.”

While the shareholders objected to GPI’s acquisition of an almost 20% stake in Spur, Whitburn “doesn’t have a view” on whether it should now be sold off.

For now, his main concern is that the meeting next week would again be dismissed on a technical issue – without the shareholders getting an opportunity to vote on replacing directors.

GPI did not respond to Business Insider's request for comment.

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