Franchise Forum | Middle East: Strong Start to Summer for Franchise Business Growth
Current franchising trends in the Middle East indicate that 2013 will mark a busy summer for the franchise industry. According to relatively recent estimates, the Middle East franchise market is worth approximately $30 billion U.S. dollars.
According to an article from Zawya Business Pulse, the Middle East is ranked the third fastest place in the world to start a business. Notably, in places like Dubai, 90% of private enterprises are small and medium enterprises (SMEs). In the UAE, Zawya notes that the fast-food and fashion retail sectors are currently dominated by American and French brands. This is changing however; as Asian franchisors begin to enter the local market and other opportunities start to develop in different economic sectors. Currently, family conglomerates and large companies continue to have a grip on a large percentage of the franchise activity in the region in not only the retail and fast-food sectors but also hospitality, leisure, financial services, education and real estate. According to Zawya, 90% of commercial activity in the Middle East is run by family businesses. This may change as local concepts begin to mature and the government continues to support the development of SMEs. Part of the reason for franchise successes in the Middle East has been governmental support in programs that provide business training to entrepreneurs.
The Middle East and North Africa Franchise Association (MENAFA) has noted the following commercial developments:
- French company Carrefour, the world’s second-largest retailer has inked a deal with African distribution company CFAO to expand its footprint in Africa. Under a joint venture, Carrefour will develop different store formats in eight countries in West and Central Africa including Cameroon, Congo, the Democratic Republic of the Congo, Gabon, Ghana, Ivory Coast, Nigeria and Senegal. Carrefour is already present in Egypt, Tunisia and Morocco.
- C House Italia, a sophisticated brand of Italian fine dining has signed a master franchise agreement in Qatar to expand its offering of fusion Italian foods, non-alcoholic cocktails and signature espressos to the region.
- Menchie’s Frozen Yogurt, one of the world’s largest self-serve frozen yogurt franchises has opened 100 locations worldwide in the past 10 months, has signed master franchise agreements in the UAE and multi-unit agreements for countries like Jordan and South Africa.
These developments are simply a sampling of the commercial activity currently taking place but strong indicators of a promising season for franchising activity.