McDonald's in the Middle East: Meal deals

Fancy a hamburger? With fries? Go large? Chances are you probably do. Whichever way you look at the numbers, they are nothing short of astonishing: 69 million people a day eat from one of McDonald’s 34,000 restaurants across 119 countries, with 1.7 million employees. That’s about the entire population of Abu Dhabi. Little wonder its global income is close to $28bn a year.

The company may have become a focus for debates on obesity, corporate ethics and consumer habits, but when it comes to a business success story, there are few better ones to be found. It was Ray Kroc, who in 1954 discovered a small burger restaurant in California that was at the time owned by brothers Dick and Mac McDonald. He turned it into McDonald’s, and 59 years later it is a global phenomenon. Nowhere is that more visible than in the GCC where 369 outlets can be found, a figure that will rise to 585 by 2015.

Surprised? You shouldn’t be — after all, 900,000 people a day in the GCC seem to fancy a bite, and punters are liking their Big Macs in increasing numbers. But as far as this region is concerned, the best is yet to come.

“We need to sharpen our saws and we need to work harder and more aggressively to attain our goals,” says Yousif Abdulghani, managing director of McDonald’s Middle East Development Company.

Abdulghani already has plenty on his plate. Since opening the company’s first GCC restaurant in Riyadh in 1993, it has evolved into seven separate partner organisations that are 100 percent locally owned and operated (two in Saudi Arabia). They each own development licences, with McDonald’s acting as the business facilitator. Total sales, when the Middle East and Africa region is included, came in at $1.5bn last year, with the GCC accounting for around $750m.

He explains: “McDonald’s is well known to be the biggest franchiser across the world, and when you look at our ownership model across the system we have different models. Of course, the Middle East is a bit unique because we had a lot of people who were interested in the brand, in bringing the franchise to the region. Yet they were not really willing to dedicate [their] full time and best efforts to the business.”

Abdulghani adds: “So we moved into [a] new ownership structure called development licensees… So these investors basically own their assets in the markets here. We provided them with all the support and know-how that is needed to run the business, but the day-to-day activities are managed, really, by the partners.”

It’s clearly working. Last year’s revenues were “a record year in the sense that we have been growing, growing at the rate of fifteen to 20 percent on revenues,” he says.

Big numbers, but then again, these are big names entrusted with the GCC franchises: HH Prince Mishaal Bin Khalid Al Saud, president of Riyadh International Catering Company, runs the Central, Eastern and Northern Regions in Saudi Arabia. The country’s Western and Southern Regions are looked after by Abdulrahman Alireza, general manager of Reza Food Services. Emirates Fast Food Company, led by Rafic Fakih, has the UAE, and the formidable Kamal Saleh Al Mana, managing director of Al Mana Restaurants & Food Company oversees Qatar (see box for full profiles on partners).

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