Middle East is a testing ground for international brands. Since franchising began to grow globally, it has been a place where many of them have tested their products. Fast-food chains such as McDonald’s, KFC and others were the first to enter.
They sold locals on American dreams.
They were a sure-fire way to achieve success. These brands are now common in Arab cities, along with many other well-known ones.
The majority of these brands are located in busy malls with food courts and offer the same profitable concepts as in the United States.
Fast-food is taking over.
McDonald’s operates 1,950 outlets across the Middle East, GCC and North Africa. This is far less than the global network of almost 42,000 McDonald’s branches.
It dominated regional import franchises for many years. Starbucks, which has expanded rapidly in the past few years to roughly 2,000 locations across the region, is now catching up.
All types of fast-food restaurants, including burger joints, pizza parlors, coffee shops and more, are now part of our daily eating habits. Local favorites like shawarma and falafel were familiar to consumers, as was the takeaway culture. Local coffee shops have been selling coffee on the go for many years, helping Western coffee chains to blend in easily.
The Concepts Unpacked
Fast food franchises, casual dining restaurants (including coffee shops and pizza) and one-item offerings are the three main categories of franchises. Subway, KFC and Hardee’s are all major franchises in the first category. A multicultural population is embracing Western-style takeaways across the Gulf. Pizzas are a mainstay of the casual food segment.
Brands such as Pizza Hut and Domino’s compete for the customers. Pizza Hut, Domino’s and Pizza Express continue to dominate the pizza category.
P.F. Global casual concepts such as P.F. Chang’s and Chipotle have become familiar names. Coffee shop franchises such as Costa Coffee Tim Horton’s Starbucks Cinnabon Joe’s and Joe’s have also become household names.
The thriving coffee culture of the area is reflected in &The Juice.
The French bakery Paul was converted into a café and has found success in the casual dining market. As well, dessert chains that specialize in a single product, such as Baskin Robbins Cold Stone, and Krispy Kreme, have also become local favorites.
If done correctly, big business can be achieved
Local investors and entrepreneurs also enjoyed major benefits as international brands flourished due to Middle Eastern consumers. Across F&B and hospitality, as well as fashion, health and beauty, leisure, and the latest in technology, a handful of major operators dominates the region.
Kuwait-based Alshaya Group manages nearly 60 international brands, including Starbucks. In addition to P.F.
Chang’s Pinkberry Pizza Express Chipotle Shake Shack Shake Shack. Americana is another Kuwaiti giant that operates fast food chains such as Hardee’s and KFC.
Azadea, a family-run clothing shop in Lebanon that began as a small store opened by a single person in 1978 has grown into a large group which manages brands such as Paul and Eataly.
Saudi Arabia’s BAAN Holding Group (formerly Al Hokair) has carved a niche for itself in the hospitality industry, managing franchises with hotel giants like IHG, Radisson Accor Hilton Golden Tulip and IHG. It manages 22 properties with over 2,700 rooms.
Expanding outward
After relying on imports for years, many regional developers, including Lebanese, began to turn the tables. After years of thriving on imported concepts, regional developers–many of them Lebanese — began turning the tables.
These entrepreneurs have embraced authenticity to stand out. Em Sherif, a Lebanese company, is a well-known brand with 37 restaurants, cafés, beach venues, and delis spread across the Middle East as well as Monaco, Ivory Coast and Madrid. They will also soon expand into China and Hong Kong.
They have also expanded to the Gulf, Europe, and other Lebanese brands such as Abd El Wahab and Al Falamanki.
Global contenders
The regional franchisors no longer limit themselves to oriental or traditional cuisine. Many are now competing with the global giants.
Herfy is a Saudi fast-food chain that has almost 370 stores in the UAE, Kuwait and Bahrain. Kudu is close behind with over 300 outlets.
Both are smaller than American giants.
Local franchisees in the Middle East, Africa and the Middle East have been successful at expanding chains like Zaatar W Zeit & Casper & Gambini’s.
Throughout the decades, this region has welcomed international franchises, wanting to be the first in the world to try the latest styles. As the competition and market maturity intensifies, today local brands have emerged as serious contenders. They are ready to not only import, but also export, the next generation of global franchise concepts.