The Middle East is strategically emerging as a significant region especially for food and beverages (F&B) brands from across the globe, including South East Asian food concepts. Franchising is further fueling this growth. Explore more...
As international franchising gets into full swing, the brands from the South East (SE) Asia including countries like; Cambodia, Thailand, Malaysia, Indonesia, Philippines and Singapore are also encapsulated with a strong entrepreneurial spirit. Several food and beverage franchises from this part of the world or brands offering regionally inspired concepts are set out to become globally recognised brands. The Middle East countries are tactically an important part of expansion for most international brands today. The region’s F&B sector has been doing exceptionally well over the past few years. Also, it is the melting pot of various cultures with its large expat and multi ethnic population which appreciate and experiment with food and flavours from across the world. Moreover, now people have become more discerning and are able to differentiate between Chinese and South East Asian cuisines.
Factors for growth
In spite of financial up and downs affecting other sectors like real estate, luxury, fashion and construction sectors, people still go out to eat. Thus, the F&B industry is able to survive better in the adverse economic conditions. Now, with region’s economy back on track, this sector is seeing heightened commercial activity. Besides, wider distribution of wealth among the residents and immigrants has raised income levels making consumers deep pocketed to go out more often and eat. A recent survey has revealed that in the UAE alone, people prefer eating out at least twice a week. It is highly obvious that the F&B players have lot of business at hand in the region. Besides, the pro-franchising policy of Middle Eastern governments offers conducive trade and operational business environment. Therefore, the foreign franchisors find expansion more convenient and viable to establish and expand their brands in this market.
Considerations
It is very important for food franchisors seeking commercial entry into the region to abide by the regional and local government regulations. Especially the companies operating in the food and beverage industry in the Middle East need to comply with highly stringent regulations governing food operations in the context of religious policies. They have to operate within Halal certified guidelines.
Brands in fray: Where in several South East Asian food brands are already present several other are making inroads in the region’s market.
Jollibee: Jollibee from Philippines already has presence in the Middle East, it is looking to grow its presence further. It is an international food brand competing with top fast-food chains around the world like McDonalds and Burger King. The brand has re-entered the Kuwaiti market. It previously opened its first store in 1994 and lasted till 1999. However, Jollibee presently operates seven stores in Saudi Arabia; one in Qatar and several others in pipeline in the Gulf region.
Teriyaki Experience: Offering healthy alternative to traditional fast food is the brand called Teriyaki Experience which was founded in 1986. The unique concept is built around the teppanyaki grill which allows preparation of the meals fast and fresh for the customers in three minutes or less. Nicole Veloce, COO, Teriyaki Experience shares company’s Middle Eastern expansion: “Our international expansion plan calls for individuals or companies with extensive food and beverage hospitality background to be our Master Franchisees. In the Middle East, our long time Master Franchisee is Yum Yum Tree Food Courts. Currently, they are operating in Bahrain, Kuwait, Dubai and Abu Dhabi with our brand. At present, there are ten locations operating in the region, with an additional one being opened in Abu Dhabi shortly, with yet another location identified already as a new location”.
New Enterants
Kebab Turki Baba Rafi: A food franchise headquartered at Surabaya, Indonesia, Baba Rafi has over 700 outlets across domestic market. The company established in 2003 by Hendy Setiono set out for expansion in the Middle East last year and now in process of finalising its master franchise arrangements in the region.
Ramen Ten: Based out of Singapore, ‘Ramen Ten’ is the first Halal Japanese restaurant offering affordable modern Japanese Cuisine. Ramen Ten which means noodle shop in Japanese originated in Singapore in year 2002. It adopts the concept of hip and vibrant décor in line with the fashionable Japanese downtown Harajuku. It is the first Halal Japanese restaurant in Singapore which offers affordable New Age Japanese Cuisine with a twist and offers more than 25 types of Ramen. Roger Tan, Executive Director & Co-Founder of Ramen Ten and Shin Tokyo Group shares brand’s expansion plans in MENA: “We have confirmed a Master Franchisee for 15 Countries in Middle and North Africa including countries like Qatar, the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, Iraq, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia and Algeria”.
Yellow Cab Pizza: It is a pizza chain from Philippines looking for expansion in the overseas market via franchise route. Established in 2001, it operates in the QSR space offering New York-style pizza to its consumers. The company was recently acquired by Pancake House Inc. which is planning to expand 'Yellow Cab Pizza' in Malaysia and the Middle East and will also continue the domestic expansion of the brand. Presently, there are 82 outlets of the brand, most of which are situated in Manila, Philippines. Also, the brand has worldwide presence with its restaurants in Qatar, Malaysia, Guam and the mainland US.
Future aspirants
Recognised as the healthy alternative to traditional fast food, the first outlet of café and restaurant brand Sakura Kristal was established in 2003 in Lebuh Pudu, Kuala Lumpur. With strong presence in the home market this Malaysian brand is certified HALAL. The company is seeking to enter into the untapped market of South East region like Indonesia, China and the Middle East in the near future.
Emerging trend
The Middle East franchise market is opening up to the idea of sub franchising and multi unit and single unit franchising. Therefore,sub-franchising, wherein a locally present Master Licensee signs up multiple franchise partners, is catching up with franchising as the most popular way for regional entrepreneurs to take on an established brand name in the Middle East. Therefore, the aspiring unit franchisees can explore the new brands entering the Middle Eastern market.
Finally
To fully exploit the F&B industry in the Middle East, the franchisors and the supplier price need to rationalise the products and services in terms of quality and prices. Brands which are able to well understand the region’s market dynamics and adapt to the local taste, customs and preferences and still provide an international food experience.
