International brands keen on opening franchises in the UAE
Dubai: The UAE is a point of entry for international brands that want to expand in the GCC and the wider Middle East and North Africa (Mena) region, according to exhibitors at the Franchise UAE Expo on Wednesday.
The show will run until Thursday at the Al Bustan Rotana hotel in Dubai.
Brands are setting their sights on the UAE because of its growing economy and proximity to other regional markets.
“The UAE is a step into the region. Our closest market is Cyprus, but from Dubai, we can expand to the GCC,” said Theodoros Kringou of Montreal-based Presse Café, which offers coffee, sandwiches and pastries, among others. This year marks the brand’s second participation at the show.
Presse Café currently has separate franchise agreements for the countries it operates in, including Canada, Australia, France, Cyprus, Senegal and Morocco, he said.
Similarly, Asian restaurant-chain Barbecue Garden views Dubai as an entry point to the Mena region. Its large population makes it an attractive region to do business, said Robert Beausoleil, the brand’s director of franchise.
“Mena is one of our target markets next year,” Beausoleil said, adding that the brand is looking for development partners in the region. “I suspect that we will get enough [deals] to close all of Mena within a month after the show,” he said.
The franchise market in the Middle East is estimated to be valued at $30 billion.
In the UAE, there are 850 local and international brands, which are growing at a rate of 16 per cent year on year compared to regional markets, Mana Al Suwaidi, CEO of Franchise Middle East Consultancy, the show’s organiser told Gulf News.
There are 300 retail brands in the UAE, with 80 new ones entering the market between 2014 and 2015, and 80 service brands, according to Roy Seaman, managing director of Franchise Development Services (FDS) in the UK.
Entry of brands to the UAE is easy compared to other regional markets.
“The UAE does have a business friendly environment. I think within the region it’s advanced with its laws, so franchisors dealing with local franchisees can feel comfortable with the relationship they are entering into,” said Marcus Wallman, partner at Al Tamimi and Co., a law firm.
There is no law for franchising in the UAE , but there is one being developed.
A franchise law would “clarify obligations between franchisors and franchisees,” said Wallman.
Not enough local brands expanding
Meanwhile, there are “not enough” local brands expanding outside the UAE, Seaman said.
According to him, the reason for this is a lack of education about managing an overall business operation, including setting business goals, managing time and teaching and motivating staff.
Al Suwaidi said that although most local brands in the UAE are not franchised, they are seeking help from consultants.
He added that local brands are capable of expanding internationally.
“Local brands have a set of standards and quality that are on an international franchising industry level,” he said.
Many of the brands that are entering the international space have a local flavour. Some of these include camel milk brand Camelicious and Just Falafel, a food retail brand which opened its first outlet in Abu Dhabi in 2007.
Fadi Malas, CEO of Just Falafel, said that strong demand from outside the UAE has allowed it to expand. “Our franchise operators in Egypt and the Saudi Arabia in particular have had an immediate receptive customer response and also in those interested in becoming sub-franchisees,” he told Gulf News in an e-mailed statement.