“If a brand is already a tested, popular concept back home, and its owners are committed to international expansion, it will tend to do well here provided its target market can be clearly defined and the franchise partner can deliver expert operational and support teams such as logistics, property, marketing and HR.”
But it’s not just the well-established family-owned firms that are vying for a slice of the action. Razzaq launched AWGAL Investments this year specifically to target the food and beverage section and is already in talks with several US-based franchises about opportunities in the UAE. Tabco Emirates, which plans to open 20 branches of Elevation Burger in UAE, was established earlier in the year to do just the same.
While fast food is clearly a popular choice, there is growing demand for branded table service restaurants such as the organic burger chain Elevation Burger, Mooyah Burger and Texas Roadhouse, all of which have either opened or plan to open in the near future.
The region’s growing obesity and diabetes rates — five of the ten countries where diabetes is most prevalent are located in the six-nation GCC according to the International Diabetes Federation — also makes it a target for healthy fast food concepts, says Corrin.
“[The Middle East] is by a long distance the most franchise momentum that we get in any region,” he explains. “The local retail market, at least with the American and European brands, is operated by just one or two very large groups… and they are now recognising for the first time that they are missing their healthy options,” he adds.
Franchises are being lured to the region by a number of factors, most notably Dubai’s extravagant shopping malls and the high disposable income of its residents. The combination makes the UAE an attractive market from which to gauge consumer demand and act as springboard from which to launch regional operations.
“Malls are open every day of the year, which is amongst the highest in the world, and the spending and the usage is very good so it looks from the outside to be a very good market for food and beverage concepts to come in,” says Nick Maclean of global real estate consultant CBRE Middle East.
“Because of the number of nationalities, the internationalisation of the Dubai market and the amount of travel that people who are resident here do, invariably the people living here have experienced those restaurants in their home markets, so one of the overriding factors when we talk to those retailers to try and persuade them to come here is the familiarity with the brand.”
“With an average regional GDP growth of around five percent versus flat or negative growth in Europe or the US… the region is promising for companies that are looking to maintain or build their revenues,” adds the Alshaya spokesperson. “We generally launch either in the UAE or Kuwait and then look to spread more widely across the region. Both markets have a proven demand for well-established international retail brands, together with access to premium mall locations for us to choose from,” they add.
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