|BACKGROUND||The concept of fast food retailing, also known as Quick Service Restaurant (QSR) evolved in Nigeria about 36 years ago by UAC, from the coffee shops of its Kingsway Departmental Stores, which later transformed into Kingsway Rendezvous. The organized QSR industry is fast emerging in the country and the industrial landscape has witnessed the influx of unprecedented number of QSR operators since the opening of the first outlet in Nigeria, at Yaba, Lagos in 1986 by Mr. Biggs, a subsidiary of UAC Nigeria Plc.
Like the name implies, fast food restaurants, are specific food outlets that specialize in the fast and efficient preparation of meals that are always ready for take-out or eat-in at affordable prices.
The QSR industry in Nigeria is modeled after international brands like McDonald’s and KFC and is dominated by indigenous entrepreneurs. Their sizes range from small, medium and big outlets.
Mostly, the smaller ones are established by individual investors, while the few bigger ones are owned by corporate organizations. They can therefore be categorized according to their operational capacity i.e. staff strength, number of customers and capital outlay as shown below:
Categories of Fast Food Outlets in Nigeria
Size Estimated Capital No. of Staff No. of Customers
Small Less than N5m Below 20 Below 250
Medium N5m – N50m 20 – 50 250 – 1000
Large Above N50m Above 50 Above 1000
|RATIONALE||· This Product Program will address the challenge resulting from high cost of funds as it will grant funds to beneficiaries for the acquisition of machinery and equipment as well as working capital at concessional interest rates.
· It will promote glabal best practices in the establishment of restaurants of high quality standards that can compete not only with indigenously-owned food businesses, but with global brands that are currently entering the Nigerian market.
· The Program has a very high potential for job creation both directly and indirectly.
· The Program will promote the availability of hygienic, nutritious and affordable food for the populace.
|SOURCES OF QSR MACHINERY AND EQUIPMENT||Some of the sources of QSR and processing equipment/inputs are as follows:
Burkett Restaurant Equipment and Supplies
3011 Council Street,
Toledo, OH 43606,
V.le del Progresso, 20,
Z.I. 35026 CONSELVE (PD)
IEC Nigeria Limited
8A, Ahmodu Tijani Close,
Off Sanusi Fafunwa Street,
Tel: Tel: +234(709)8008636 ; +234(709)8008633
Chitex Business Links
|Limited Liability Companies and Business Enterprises engaged in or intending to set up quick service restaurant businesses such as fast food and eateries will be eligible to access the Fund.|
|PROJECTED IMPACT||The fund shall be used to establish, expand and modernize (upgrade) fast food businesses and eateries to ensure quality service delivery.|
|SINGLE OBLIGOR LIMIT||Up to N500 million|
|Interest Rate: 9 % per annum.
Fees: 1% Processing Fee for loan less than N50 million.
1% each for Appraisal and Commitment Fees for loan above
|TENOR||· 31/2 – 7 years|
|MORATORIUM||· 6 to 12 months ( from date of loan disbursement)|
|· Loan up to N50 million: 90% maximum from BOI (including working capital from BOI or the SME-friendly banks).
· Contribution by the promoter – 10% (minimum)
· Loan above N50 million: 80% maximum (including working capital from BOI or the SME-friendly banks).
· Contribution by the promoter – 20% (minimum)
· For an existing project, the estimated value of the factory building and/or relevant processing equipment, may be applied against the borrower’s 10% contribution. The factory building and/or equipment must be valued professionally by any of BOI’s accredited valuers.
|FUNDING SOURCES||· Loans of N10 million – N50 million: BOI Fund and CBN N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF)
· Loans above N50 million: BOI Fund
In phases in accordance with agreed milestones and shall be backed by provision of performance bond by the accredited equipment suppliers (where the suppliers demand for advance payment before delivery of the equipment).
After successful installation and testing of the equipment and payment shall be made directly to raw materials suppliers