Anat Apter has gone from selling food at the Bruma Lake flea market in Johannesburg to owning a national franchise with over 20 outlets. This is thanks to her unique Middle Eastern fast food and a focus on quality. She talked to finweek about her business journey.
What did you do before you started Anat?
I was mainly a housewife taking care of my three children. I made money on the side, baking for functions. For a while, I also imported and sold leather handbags from Europe. I completed a travel agent course just before I decided to open a food stall at the Bruma Lake flea market. In the end, I opened the food stall as I reasoned that selling food would generate income faster than selling airline tickets.
Why did you decide to start Anat Falafel in 1991?
My grandfather, Solomon Barzilai, worked in a falafel shop in Egypt as a teenager, where he learnt to make falafel. He later started his own falafel business after getting married (and having 12 children). My father, Jacob Barzilai, took over the business when my grandfather decided to retire.
I swore I would never follow the same path, but when our family struck financial difficulties, it seemed like the best way out. My mother, Mazal Barzilai, always used to tell me: “If you ever need money, open a falafel shop.” In retrospect that must have been the best business advice I have ever received.
Why did it seem like a great idea at the time?
Falafel is a unique product and nobody else was selling it anywhere in South Africa at the time. Furthermore, I was confident that my falafel recipe was nothing short of excellent, as it is based on the original way my grandfather used to make it. The thought never crossed my mind that I might fail.
How did you start selling your product?
I obtained a stand at Bruma Lake flea market thanks to my unique offering. I started out selling falafel at R5 a portion from a branded trailer, with the help of an assistant from Ghana. The people loved it! I sold 50 portions on my first day at the market.
Where did you get start-up funding?
I maxed out my credit card, which at the time had a limit of R10 000.What did you do to keep costs low and prevent cash flow problems?I would go to the market early in the morning to get fresh, good-quality vegetables instead of using a set supplier. Besides that, I prepared everything from my kitchen at home and had only one employee to assist me at home and at the flea market.
What were your biggest challenges when you started out?
Firstly, money. But, fortunately, I had a bank manager who believed in me. Secondly, I didn’t know what to do with my children over weekends, which were the busiest days at the market. I had a helper who had just started working for me, and I paid her extra to look after the children on Saturdays and sometimes on Sundays. Alternatively, I took the children with me to the market or arranged play dates for them.
I shared the workload with my husband, Manachem. He would work in the mornings, and I would join him at lunchtimes, which were extremely busy, and after lunch one of us would go home to be with the children. In this business you make most of your money while everyone else is on holiday.
What was your biggest breakthrough?
When people started approaching me to buy franchises, around 1998.
Tell us more about how you started out with the franchise business.
We didn’t get any advice. My husband and I just used our common sense, which kind of backfired and created all kinds of new business challenges. Since then I have invested a lot into the training and teaching of franchisees. Franchise holders now know they need to copy what I did when I started out: They must work hard and always supply high-quality fresh produce if they want to be successful.
How has the business grown since then?
It grew from a food stand into a franchise business with 22 outlets. We also have a bakery that supplies fresh pita breads and wraps to our franchisees as well as supermarkets, coffee shops, restaurants and other food franchises, and a kitchen that prepares most of the raw material used in our falafel, which we supply daily to our outlets to ensure a constant fresh and high-quality product.
To what do you ascribe this growth?
To the uniqueness and quality of the product, and my big passion and honesty towards the food I sell. Besides this, I was determined to succeed. Nothing could stop me.
What are some of the business skills that you had to develop to ensure your success?
Skills to develop, maintain and grow your business, such as account management, product development, innovative thinking, people skills, social media and the use of technology.
What are currently your biggest challenges?
With the current state of the economy and price increases, the biggest challenge is to find ways to keep prices for the franchisees and customers sane. To address this, I do what I always do: I constantly look for new suppliers with better prices, make use of promotions to boost sales, and introduce new budget meals. All while being as thrifty as possible without reducing quality.
How did you market the company when you started out and how has this changed over time?
The outlets I opened at the beginning acted as marketing for the business. People saw the queues and came to ask for a franchise. Times have changed due to the poor economic conditions in the country. People are currently scared to invest. Everyone is waiting to see what will happen.
Were there times that you felt like closing the shop?
Yes, there were a few times. There are many reasons why, but mainly because it is such hard work for low returns. Last year, we unfortunately had to close a few shops. Fortunately, the size and sustainability of the business have kept me going through these difficult times.
How has competition in the fast-food market increased since you started out?
At the beginning I had no competition. A lot of shopping centres, however, opened since 1991, with a lot of food outlets from SA and overseas. Some of them have huge budgets that allow them to operate on the back foot for a while, so they can afford to keep prices down.
In today’s economy the customer looks at pricing first. There is almost no place for luxuries. Our market advantage, however, is – and will always be – the uniqueness of our products.
If you could do anything differently, what would it be?I would keep selling vegetarian falafel only, as I did when I started out. This would have made life a lot easier. I started selling meat a few months after I opened the stand, because my husband and I thought it would be popular with the customers in SA. We were right, but meat needs much more maintenance and work and it is expensive.
I also wish I’d studied economics to help me run my business better.
What are your plans for the future?
The plan is to keep it up – develop more products, open more outlets, keep franchisees happy, and strengthen the brand. Due diligence and maintenance are key in continuing a business that is already established.