JOHANNESBURG Shares of South African small-cap restaurant operator Taste Holdings (TASJ.J) surged 10 percent on Thursday after it said it had signed an exclusive franchise deal with U.S. chain Domino's Pizza DMZ.N.
The deal makes Domino's the latest U.S. fast-food chain to target rising consumer spending in Africa. Yum Brands (YUM.N) has been rolling out its Kentucky Fried Chicken stores, while McDonald's Corp (MCD.N) is well established in South Africa.
The 30-year deal will give Taste the right to develop the Domino's business in South Africa and six other countries in the region, including Zimbabwe and Mozambique, the company said in a statement.
Taste said it will also have the right to expand the franchise into Zambia and Malawi following the fulfillment of certain conditions.
Under the deal, Taste will convert its Scooters Pizza and St Elmo's pizza outlets into Domino's stores. It also plans to start opening new Domino's stores by the end of this financial year.
Shares of Taste closed up 10.2 percent to 4 rand.
(Reporting by David Dolan; Editing by Joe Brock)