Spanian’s Kebabs shrinks to three businesses as franchisees face mounting risks
Spanian’s Kebabs has reportedly contracted from ten outlets to three, with its Newtown shop closed and its Kogarah store struggling. The rapid decline raises questions about the franchise’s viability, with franchisees bearing much of the financial risk after paying substantial fees to use the brand.
Suppliers say the remaining businesses are food trucks in Brisbane and Melbourne, plus the Kogarah shop, which has reduced staffing and deliveries. The Newtown outlet closed about nine months after opening, as reported customer numbers fell and online reviews criticised the food. Franchise rights reportedly cost between A$250,000 and A$350,000 plus GST for up to seven years.
In short
- Spanian’s Kebabs has reportedly shrunk from ten outlets to three.
- The Newtown shop closed around nine months after opening.
- Franchisees may have paid up to A$350,000 plus GST.
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The case for
The contraction may reflect the difficulty of building a new food brand in a competitive market, rather than proving the franchise model is inherently unviable. Franchisees chose to invest in a brand with potential reach and received the right to trade under it; the remaining outlets may still improve through changes to staffing, delivery or the menu.
The case against
The closures and reported trading difficulties raise legitimate concerns about whether franchisees were given a realistic picture of demand and the risks involved. With rights reportedly costing hundreds of thousands of dollars, franchisees can face substantial losses if customer numbers fall, while the brand owner may be less exposed to each outlet’s day-to-day costs.
Explained simply
Spanian’s Kebabs is a food business built around the name of Spanian, an Australian online personality known for videos about life on the streets and his travels. It expanded through franchising, allowing separate owners to run outlets using the brand.
Franchisees typically pay for the right to use a brand and operate a business, while covering costs such as staff, stock and rent. The reported franchise fee for Spanian’s Kebabs was A$250,000 to A$350,000 plus GST for a term of up to seven years, a substantial commitment for owners.
The number of outlets matters because franchisees depend on customers and a functioning brand to make that investment pay off. A shrinking network can raise questions about the business model and the risks faced by owners, though the circumstances can differ from one outlet to another.
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Originally published by Daily Mail as “The full story of Spanian’s Kebab’s downfall: Insiders reveal the warning signs before the fast-food empire crumbled to two trucks and a struggling shop – even as the YouTuber boasted of his ‘unstoppable’ rise”.