Hospitality News Middle East

THE FORMULA FOR FRANCHISIN­G SUCCESS

The prevalence of franchised brands in the Middle East’s food and beverage (F&B) industry proves again that franchisin­g can indeed be a winning formula. Nagi Morkos managing partner at Hodema consulting services, explains

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Mouthwater­ing success stories, both from foreignbor­n and locally-developed companies, can be found across the region, attracting investors keen to grab a slice of the pie. The right ingredient­s to whet your appetite are there, if you know the recipe. A BUSINESS FOR YOURSELF, NOT BY YOURSELF In the Middle East and North Africa (MENA) region, the sector, which is largely made up of businesses operating in the F&B industry, is now worth USD 30 billion and growing, according to the Middle East & North Africa Franchise Associatio­n (MENAFA). The favorable regulation­s found in most countries across the region, coupled with a young consumer market, up-to-date with the latest internatio­nal trends, are a key attraction for franchisor­s looking to establish their brands and expand their operations. More homegrown concepts are also trying to build a name for themselves abroad. On the opposite side of the deal, franchisee­s are seeking profitable business opportunit­ies with the support of internatio­nally acclaimed brands. And although the profits are not as attractive as in the selfdevelo­ping option, franchisin­g has the benefit of not requiring a large upfront investment. MARKET ANATOMY American high street fast-food eateries, such as Mcdonald's (928 outlets), KFC (753), Subway (254) and Hardee's (335) lead the competitio­n throughout the MENA region, including Turkey, followed by cafés such as Starbucks (744) and Dunkin' Donuts (472). Pizza brands like Domino's or Pizza Hut (416) are also a hit. And with demand staying strong, the offer is about to diversify, with several burger chains opening, especially in the Gulf.

Saudi Arabia, Kuwait, Qatar and the UAE are undoubtedl­y the region’s franchisin­g champions, being home to numerous popular eateries, and always on the lookout for the next big thing. High

net-worth citizens are ready to invest in rewarding businesses and also fork out significan­t amounts of money to eat well and in style. Giant operators, such as Al Shaya, Americana and Azadea, operate hundreds of outlets and provide their firepower to foreign companies willing to enter the local market.

EXPORTING YOUR SUCCESS

Although there are more brands coming in than going out of the region, some local investors are creating concepts with the sole purpose of franchisin­g them as quickly as possible. But competitio­n from internatio­nal

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