What works in the West might not work in the East
One example of that would be the food truck business. In the United States, it has proven to be a successful business model, where some estimates show that the food truck industry is outgrowing the restaurant industry. This owes to the fact that even with substantial startup costs, the food truck industry is being seen as a safer option. First-time business owners who are wary of the high costs of commercial space can use their food trucks to experiment with ideas and generate a revenue stream.
Studying the success in western and European markets, entrepreneurs and investors in the GCC decided to the join the movement and try out the model in the GCC a few years back. As lucrative as it may have seemed to them then, the concept was soon faced with hurdles and roadblocks unique to this geography. Underdeveloped regulations, complicated investor-owner relations, unfactored expenses and a general difference in the behaviour of consumers in the west and Middle East saw the trend fizzle out slowly.
For instance, In Dubai, an operator would need to obtain permits from the Department of Economic Development (DED) and the Dubai Municipality, and approvals from both the Roads and Transport Authority (RTA) for the truck license and from the Dubai Electricity and Water Authority (DEWA) for amenities and all of this doesn’t come cheap. If these expenses are incurred by the investor while the food truck is operated by another person, the essence of the concept gets diluted.
“It was an amazing idea at the time and everybody over-invested in food trucks and we soon realised that RTA doesn’t talk to municipality, municipality doesn’t talk to the owners and the business model wasn’t ready. In the western world, it is an owneroperator model where the chef drives, cooks and sells. So it’s not an external investor,” explained Naim Maadad, founder and CEO of Gates Hospitality.