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
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