Gulf family firms eyeing overseas franchise deals

  • Share via facebook
  • Tweet this
  • Bookmark and Share
Dubai-based BinHendi Enterprises established 7Franchise Group last year in a bid to sell its local food and beverage concepts to investors across the GCC and wider Middle East

Dubai-based BinHendi Enterprises established 7Franchise Group last year in a bid to sell its local food and beverage concepts to investors across the GCC and wider Middle East

Up to 150 regional family-owned companies may franchise their brand outside of their home market in the next three years as they look to grow their regional footprint, a leading franchising consultant has said.

Restaurants and service businesses are most likely to look at the franchising model but many are being held back by a reluctance to lose overriding control of the company, Michael Seid, founder of MSA Worldwide, told Arabian Business.

“There’ll be a lot of companies in this next year who express an interest [in franchising]. I’ll be surprised if in the next three years between 50 and 150 companies haven’t expanded,” he said.

“Restaurants, service businesses, anything to do with professionals will take off very well,” he added.

“There are some extraordinary restaurants that if they were in any other part of the world and people had an entrepreneurial spirit they would be leaping to it.”

The Gulf has long been a magnet for retailers and restaurants looking to expand their business through franchise thanks to its wealth and large numbers of foreign workers.

Dubai, home to the Middle East’s most lavish malls, is the second most popular city for American retailers to expand outside of their home market, according to a recent study by global real estate consultants CBRE.

Dubai-based BinHendi Enterprises established 7Franchise Group last year in a bid to sell its local food and beverage concepts to investors across the GCC and wider Middle East. But very few family-owned businesses have expanded their geographical reach through franchising, said Seid, who this month opened MSA Worldwide first Middle East office in Dubai.

“The whole concept of running a good family business but letting someone outside of the family run the branches and giving away day-to-day control is a very odd concept [in this region],” he said.

“You are looking at a market that is in my opinion prime for finding itself as an entrepreneurial market again. I truly believe that the market is right now ready for some very strong indigenous growth.”

The low cost involved in franchising coupled with increased brand recognition is likely to encourage more family-owned business to consider the franchising model, added Seid.

“Every time a franchise is opened, the company that franchises that company [see] their brand value go up, it gets a revenue stream from the sales and it may get a revenue stream from the sales of products and goods. It didn’t risk much because it wasn’t its capital that went into opening that location.”

 

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Qatari

Their governments should attract them and give them some kind of facilities to list their companies in the stock markets.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Q&A with Noor Bank

Q&A with Noor Bank

Kazim Ali, head of corporate banking at Noor Bank, discusses...

Saudi bank's $6bn IPO ignites religious controversy

Saudi bank's $6bn IPO ignites religious controversy

Plans by National Commercial Bank have prompted some clerics...

Dubai flexes legal muscles as financial court system grows

Dubai flexes legal muscles as financial court system grows

Landmark ruling by the court system in Dubai's financial free...

Most Discussed
  • 16
    ‘How my Dubai mortgage landed me in a police cell’

    loans in any form need to filtered with the terms and condition, assuming thing will be in order is not excuse, one need to check with banks when property... more

    Friday, 31 October 2014 5:49 PM - Jacob
  • 10
    Do you actually own your house?

    This is unbelievable from Nakheel. In a case where we want landscape our garden with some tiles and grass costing around 12500, Nakheel is demanding a... more

    Thursday, 30 October 2014 9:06 PM - skp
  • 1
    Men arrested for working in women's shops in Saudi

    “We won’t spare any mall or shop employing expatriate men to sell women’s accessories,” the ministry’s director general in Makkah, Abdul Monem Al Shahri... more

    Friday, 31 October 2014 12:22 PM - cba