GO SMALL TO GO BIG!

As franchising is a very tempting business model throughout the world and the Middle East, choosing the right concept is key to the entire process. Raja Nasri, managing partner at N4TC, a hospitality consultancy firm, speaks about adopting the right stra

AN ALTERED MARKET

Back in the day, large restaurant concepts, especially those imported from the US, for example, such as TGI Fridays Restaurant & Bar, The Cheesecake Factory, P.F. Chang’s, and Chili’s among others, were found everywhere. More recently, the trend is shifting towards single or mono-unit developments, including homegrown outlets that are making their mark on the hospitality scene. These concepts are driving a trend towards smaller, more focused concepts, which are easy to duplicate and fit within the franchise scheme. In Lebanon, for example, young concepts, such as Breakfast Barn, offering healthy food items, sandwiches, yogurts and fruit cocktails, and Frank Wurst, a hot dog concept developed in caravans or kiosks, are great examples of small-unit outlets standing out from the crowd and making a good impact. Such places turned into true influencers. Lebanese restaurants that used to have large outlets are now developing smaller ones with a more modern look and feel, while preserving their traditional quality and standards. These include Fawzi by Burj Al Hamam and Abdel Wahab Bistro, offering the Mezza Bar for convenient business meals. Shortly after the opening of the outlet, or even prior to completing the first year of operations, a reasonable number of potential franchisees would likely want to be part of the brand’s expansion, especially when the group behind the concept has industry experience.

WHAT THE FRANCHISEE GETS

Besides the benefits found within the traditional franchise agreement, the franchisee would acquire a freshly developed concept for lower fees. He or she will also be able to adapt the concept, if there is a need, as it is still young and flexible. Additionally, there is a possibility to invest in the mother company and become a strategic shareholder. The franchisee is also able to group concepts that complement each other, such as oriental-western sweets and ice-cream, under one roof.

WHAT THE FRANCHISOR GETS

The franchisor can move to obtain the cooperation of a partner willing to expand and accompany the progress of the brand right from the early stages. They will also be able to increase the value of the asset in case of loan requests, while working on a progressive fee structure based on outlets opening. Besides the lower operational costs, the franchisor can accelerate the setup of the organization through hiring the right profiles quickly, instead of waiting for the brand to become well established.

A small restaurant concept that is specialized in one F&B offering is easier to opertate and more appealing to franchise

GURUS WITH THE SAME APPROACH

Even though it’s irregular and conflicts with some of the franchise business models, several mega-franchisees are adopting the same strategy. Alshaya’s Shake Shack, Katsuya and even Cheesecake Factory were originally multi-unit brands and were much smaller than other wellestablished international concepts. Another confirmation of the concept of small outlets becoming more successful is the strong wave of street food festivals that kicked off in Lebanon with ‘Souk Al Akel’ (The Food Market). The souk was initiated by a blogger who asked young, dynamic and unconventional food lovers to gather once a week in a high-traffic district. The recurrence of these gatherings transformed many of the kiosks into a standalone concept. They are even being ‘asked out’ for franchising at a rapid rate. Finally, this entire trend is a real ‘quick-win’, as well as a ‘win-win’ game, as it puts the judgment ball in the customer’s playground.

Franchising has always been associated with the entrepreneurial spirit. The idea of taking an idea and making something with it financially, has been a major selling point of the franchise sector. The allure of starting your own business, self-employment and making your own work hours has drawn people to franchising. There are numerous success stories of people with a vision that have made fortunes in the franchise sector, either by creating their own unique idea or purchasing a franchise that has already been established