Gulf expansion on the menu for US fast-food brands

‘Healthy’ restaurant chains look to bolster revenues with Gulf franchise deals
Gulf expansion on the menu for US fast-food brands
Dubai Mall
By Elizabeth Broomhall
Sun 04 Sep 2011 03:13 PM

Dozens of mid-sized US fast food brands are eyeing franchise opportunities in the Gulf in a bid to bolster their revenues as increased competition stalls growth in their domestic markets.

At least six brands offering ‘healthy’ fast food options are actively scouting for partners in the region, World Franchise Associates said, hoping to meet demand for nutritious dining options.

“I think what has happened is that all the big brands from the US are pretty much sold, and there’s been a shift in the market,” David Cairnie, CEO of WFA, told Arabian Business.

“I think some of the older brands have lost their appeal and relevance, and will be replaced by more exciting and emerging brands. The action in the market is very much around these very successful fast-casual brands.”

Dubai is the second-most attractive emerging market for retailers after China, in part because high disposable income, according to management consulting firm AT Kearney.

Retail accounts for 30 percent of gross domestic product in the emirate, which is home to about 40 shopping malls, Standard Chartered Bank estimates.

MasterCard said Aug 18 that consumer confidence in the emirate was at a seven-year high, as the UAE sidestepped the political unrest seen in other Middle East economies.

Among the brands keen to sign a franchise deal to open stores in the Gulf this year is UFood Restaurant Group, which claims to offer “healthy comfort food'. The chain hopes to open more than 120 outlets across the region, Cairnie said.

Other US brands include Which Wich, a sandwich chain hoping to open 80 outlets through a franchise deal, restaurant chain Spicy Pickle, Vietnamese chain Pho Hoa and salad brand Dressed. The latter two are both eyeing 60 stores across the Gulf, according to WFA.

“At the moment we have short of 100 F&B brands looking to debut in the region, and I am working on about 25 agreements,” Cairnie said.

Freshii, the Canada-based healthy fast food chain, opened its first Gulf store in Dubai last October, with a view to opening a further five within a year.

The chain, which offers a range of foods including burritos, wraps, soups and salads, said it was meeting a demand for fast, nutritious food.

 “Business is doing well,” said Richard Cenque, manager of the Freshii outlet in DIFC. “We are planning on opening another outlet early next year.

“Our concept is different… people can make their own food, which is popular among those who are health-conscious… [but] they can get their food within five minutes.”

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