“We foresee exponential growth for Just Falafel in 2012 and 2013, and we aim to remain profitable so that we have the option to eventually go public,” chief executive officer Fadi Malas said in a telephone interview from London Jan 10.
“The conditions of the financial markets would have to be there and we would have the option to go public after at least three profitable years.”
Just Falafel, which has secured paid franchises in countries including Saudi Arabia and Lebanon, is seeking to boost the number of global stores to become the leading retailer of the Middle Eastern vegetarian food. The company, which may list its shares in the UAE, said Jan 8 full-year profit was AED7m ($1.9m).
The Bloomberg Quick Service Restaurant Index, made up of fast-food chains such as McDonald’s Corp, surged 16 percent in 2011. That compares with a 20 percent drop in the MSCI Emerging Markets Index and a 17 percent decline in Dubai’s benchmark stock index.
Money raised from initial public offerings in the UAE fell to $243m in 2011 from $7.4bn in 2007 after Europe’s debt crisis hurt regional stocks.
“This trend of entrepreneurship is the consequence of a general downturn in the global financial sector,” said Mohammed Ali Yasin, chief investment officer at Capm Investment in Abu Dhabi. “Investors are looking into franchises or areas of the real economy that are cash-generating businesses; there’s a belief today that the food business produces revenue, and may have the potential to go public when market conditions improve.”
“Just Falafel’s selling point across the Middle East is that we’re offering retail franchising, and historically in the region, there’s not much of that,” Malas said.