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Growing entrepreneurs
in partnership with
the SundayTribune
Growing entrepreneurs
in partnership with
the SundayTribune
W
HEN Durban student Jean-
Paul d’Abbadie’s father,
Phillipe, asked him to help out
in his fledgling point-of-sale
business in the late 1980s, he wasn’t keen.
“I was a teenager and spending my free
time working with accounting software was
not exactly my idea of fun,” he says.
But when he got to grips with the job,
installing the programme in popular local
restaurants, he loved the experience.
Twenty-five years and nearly 3 000 instal-
lations later, D’Abbadie, now 42, is still
hooked. And the software his father master-
minded and called Gaap (a nod to the term
generally accepted accounting practices) has
grown into a multimillion-rand point-of-sale
powerhouse that big brands such as KFC and
Wimpy rely on at outlets throughout SA.
D’Abbadie Snr conceived of Gaap in 1981
when restaurants were starting to move from
manual cash registers to computerised tills
that could manage stock and orders.
“By 1985, it was clear point-of-sale was go-
ing to be huge and my dad sold his account-
ing practice to concentrate on Gaap. It was a
tiny operation then – just my dad, a recep-
tionist and a part-time programmer, with my
sister helping out. He ran it from our family
home in Durban North.”
D’Abbadie matriculated from St Henry’s
Marist College in 1987 and while studying for
his BCom degree at the then University of
Natal’s Durban campus his father roped him
in to help with the business.
“The first restaurant we sold the system to
was Razzmatazz. They moved from Amanz-
imtotit to Umhlanga and are still customers.
Next came Langoustine by the Sea. We got
great references from those two, which
helped us move to the next level, franchises.”
The Keg chain of pub-themed restaurants
was their first big customer with a national
footprint. They started by winning over the
Durban franchises.
“That was no easy task. They were al-
ready using Micros, a Nasdaq-listed multina-
tional for their point-of-sale requirements.
We had to overcome the understandable per-
ception that a big global company must be
better than a small local start-up.”
Gaap pulled this off with a combination of
personalised, enthusiastic customer care and
an original pricing plan. Whereas the compe-
tition expected customers to shell out tens of
thousands of rands upfront for equipment,
Gaap paid for the equipment and rented it out
to clients.
“This was a lot more expensive for us ini-
tially, but it was hugely attractive to prospec-
tive clients. Whether you’re running a small
restaurant or looking to expand to a national
franchise, cash is tight. Trying to get finance
from banks for expensive point-of-sale equip-
ment is a headache you don’t need.
“We effectively financed this for them,
without the hassle of stringent credit checks.
And we removed the element of risk for
them. I told customers, ‘If we don’t perform,
you simply halt your stop order’.”
Taking on the risk of purchasing and
servicing the equipment has made D’Abbadie
discerning about what he buys. “There is a
lot of cheap, no-name brand stuff on the mar-
ket, but we’ve learned the hard way over the
years that you get what you pay for.
“When you promise customers their
equipment will work, you want to be sure it
will, or you’ll find yourself spending a for-
tune on servicing and, more seriously, annoy-
ing your customers with the down time.”
Buying rugged, “retail-hardened” equip-
ment means Gaap has built up a healthy
stock of second-hand equipment, allowing it
to secure business from smaller franchises
that normally wouldn’t be able to afford a
point-of-sale solution by offering them dis-
counted rentals on older equipment.
“Several of our franchise customers
started this way before upgrading to our full-
price rentals.”
Thanks to this approach, other chains, in-
cluding Billy the Bums and Butcher Boys,
soon followed Keg’s lead and Gaap began es-
tablishing a countrywide network of agents
and service centres.
By 2001, it had a staff of 15 and 300 cus-
tomers. That was when JSE-listed software
group UCS (now Capital Eye Investments)
saw Gaap’s potential and bought a 51 percent
stake that has since grown to 60 percent.
D’Abbadie owns 27.5 percent, with the
rest split between three key staff members.
D’Abaddie Snr retired, but Jean-Paul stayed
on as managing director.
“I don’t own a controlling share, but my
view is I’d rather own part of a successful
company than all of a dud. And being associ-
ated with a heavyweight like UCS has been a
big advantage.”
Financing new equipment became a lot
easier and Gaap’s growth accelerated. Today
it employs 165 staff and has a branch in every
main town. It has almost 3 000 customers in
SA – 30 percent of the market (roughly the
same as major competitor Micros), is expand-
ing into Zimbabwe and the UK and looking
into opportunities in other African coun-
tries, the Middle East and Asia.
While some big companies have battled in
recent years due to the global economic
downturn, Gaap has continued to grow,
thanks in large part to cash-strapped con-
sumers turning to budget fast food franchises
for their weekly eating out fix.
“Several national restaurant chains have
jumped on this trend and started fast food
franchises. One, the Fish and Chip Company,
has grown from nothing to 200 stores in less
than three years and was bought by JSE-
listed Taste Holdings in February. They’re
now our biggest customer by number of
stores. KFC remains our biggest customer by
volume, though.”
Rival chain Old Fashioned Fish and Chips
has 280 stores and Gaap is in 140 of them.
“Many of these franchise owners started
with one outlet. Running a business on this
scale is new to them and it can be quite intim-
idating.
“We’ve become much more than an equip-
ment and software provider. In many cases
we provide business advice and mentoring.
About 80 of our clients are franchises, so
we’ve become experts in this field. It’s in our
best interest to pass on our knowledge and
experience. If they prosper, so do we.”
D’Abbadie lives in Joburg and spends
most of his time at Gaap’s Midrand head-
quarters, but he is often in Durban to visit
the company’s development and administra-
tion teams and to spend time with his family
– his father, now 80, still takes a keen interest
in the company.
Jean-Paul d’Abbadie,MD of Gaap,the point-of-sale company that supplies restaurants. Picture: GCINA NDWALANE
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It wasn’t easy competing with international rivals to make an
impact where it counts, at the tills, but Gaap’s presence is now
felt countrywide, writes Alan Cooper