Franchising in the Middle East has found acceptance among the local entrepreneurial community. Many local players have launched their franchised concepts to leverage upon the enhanced commercial activity.
Realising the growing significance of franchising now, local or home grown businesses are also making their presence felt in the franchising arena. They are also opting for franchise growth model for their expansion.
Increased acceptance of franchising
Several home grown Middle East businesses have taken the franchise route to further their growth. The local franchise concepts seeking expansion belong to diverse sectors. The brands like Noodle House, Café MORE, Just Falafel, Keen Wash, Heritage of Henna, Dukkan Falafel, Café Ceramique, Wrapt etc are going the franchising way. Even the Government organisation like ENOCC has franchised their brands Prunto and ZOOM. The local brands are at different stages of expansion. Some of them are established, others have just started their franchise journey.
Why franchising?
The entrepreneurial community of the region understands that it is a most suitable way to achieve rapid growth without much risk and capital. The brand owners require considering a critical factor before opting for a franchise model and that is the conviction in their brand. The international brands which have launched their concepts in the region have strong brand name and recognition. Now, the local business owners and entrepreneurs have also developed self belief in their brand equity. They would like to leverage their brand image and finding expansion through franchising more rewarding. Also, the Gulf financial crisis has made both the local and global businesses re-strategise their growth plans. One of the positive fall outs of financial crisis has been emergence of new class of local entrepreneurs who would like to start their own ventures. So, like global franchisors, local brands are discovering an opportunity to tap this potential class of franchise business seekers/buyers.
Advantage to local brands
The experts opine that Gulf brands have own advantage on the home turf. The policy initiatives of the local governments in Middle East countries also provide the needed impetus to the local brands to establish and look out for growth prospects. The local brands are able to have an immediate connect with the local consumers. Being locals they well understand the market pulse. The international players have to customise their concepts to suit the local market. Moreover, the local companies are aware of the local regulations right from the start therefore, they are able to deal with the local authorities better. This is the reason why the international franchisors seek competent local partners while entering into the Middle East market.
The challenges/competition
The international brands offer competition to the local brands as they mostly have presence in various countries and are popular with varied clientele across globe. The challenge also becomes harder, when the consumers have so many brands whether home grown or international concepts, to choose from. Also, the people in the Middle East, are well travelled, foreign educated and have ample exposure and liking for international brands. Therefore, the local brands require offering superior quality products and services, and need to strive for constant innovation in their practices. These factors would help them secure their market share and also deal with competition from international brands and become market leaders in their respective business segments.
Conclusion
To conclude, one can say that both the international and local players have their own set of advantages and challenges for launching their franchise concepts in the Middle East. As is the case with any market, all will be competing with one another irrespective of the fact that the brand is local or global. The rule of the market is ‘survival of the fittest’ and that applies to the Middle Eastern franchisors as well.
