Zimbabwe’s new currency and tax reform measures seem to be coming home to roost.
KFC Africa has announced it has suspended operations in Zimbabwe, citing “current pressure on the country’s economy”, a further dent on the country’s attempts to attract new investment.
Like many businesses, KFC’s feathers appear to have been ruffled by a new 2% tax on transactions and a Treasury decision to separate USD dollar bank balances from local deposits.
“The currency challenges have affected our operations and supply and we are exploring various ways to reopen our restaurants soon,” said Thabisa Mkhwanazi, Public Affairs Director for KFC Africa, in a statement Thursday.
KFC operates six outlets in Zimbabwe; four in Harare, plus others in Victoria Falls and Bulawayo. Most of these had opened only in the past year, as part of what was a plan to run 25 outlets in Zimbabwe.
“Our supply chain is heavily dependent on local suppliers and we are passionate about ensuring that these and all other partnerships are sustainable.”
KFC reopened in Zimbabwe in 2014, seven years after shutting down its franchise owing to foreign currency shortages.
The brand in Zimbabwe was held by Kevin James, a major player in poultry in Zimbabwe with CFI and with Country Bird in South Africa.
KFC’s previous franchise holder in Zimbabwe was Firmside Investments, which also withdrew the Wimpy brand in 2007.
Due to forex shortages, franchise holders struggle to pay franchise fees. This has seen the scale-down of foreign restaurant brands such as News Café and Mugg & Bean. Simbisa, the country’s biggest fast food company, recently took over the Oceans Basket franchise from businessman Shingi Munyeza.
American franchise Pizza Hut opened in Zimbabwe in February this year.
