Abstract:
This study investigates the feasibility of establishing a hamburger fast-food outlet in Sea Point, Cape Town, with the view to developing it into a franchise organisation similar to those in the United States of America. The study looks at a micro situation rather than the overall macro situation. It considers the feasibility of a single hamburger outlet. It does not attempt to set general guidelines for the location of a store, but rather indicates by example a possible way of investigating an individual area. Initial guidelines for the selection of a suitable area of study were established by a review of the literature and research studies done in the United States of America. The Sea Point area was found to be a suitable area for investigation for the following main reasons: it has a high population density, the income level of the community was considered to be of the type to create an active market for the product, property in a good site location is available, there is a large tourist trade. Following this is an investigation of consumers of an existing fastfood Organisation in Sea Point. This is done by means of a questionnaire. The objectives of this research are three-fold: Firstly to establish tastes and buying habits of consumers in this area, secondly to identify the main segments of the market in terms of age, income, race and language group, and finally to try and indicate that there is sufficient demand for hamburgers amongst consumers. The results of the survey indicated that most customers live close to the outlet and prefer to take-away their purchase rather than eat on the premises. It was found that most respondents are concerned about hygiene and quality attributes rather than price, and that many purchases are made on impulse. A large segment of the market is Coloured; almost 60% of the sample earn less than R400 per month; and the major age group is the 22 to 30 year group. It was also found that hamburgers are one of the most frequently purchased fast-foods. The viability of establishing a hamburger fast-food outlet in Sea Point is investigated. A product range and pricing policy based on the results of the survey is outlined. Sources of supply and prices of products are investigated and the necessary capital equipment staff requirements and rental costs established. Various alternatives for the financing of equipment and fittings are investigated. Leasing was found to be the best alternative. A sales turnover of R7 400 per month would be required in order to break-even. Survey results indicate that it is possible to achieve this level of turnover. However, the report suggests that if a high turnover is to be achieved, a more suitable location should be sought. This would be an area with a higher Coloured population and with less competition. The findings of this study suggest that the concept of a fast-food operation as described in this report, would find acceptance amongst the population groups of the Cape and if implemented in the manner so described could prove to be successful.
