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The Growth Of Franchising In The Middle East

Written by Ken Gaebler
Published: 10/12/2012

Francorp reports that franchising is positioned for explosive growth in countries scattered throughout the Middle East.

The international marketplace plays an important role in the success of many well-known franchises. But according to Francorp, the Middle East is one of the world's fastest growing franchise markets with new franchise opportunities popping up throughout the region.

Growth of Franchising in the Middle East

In the past, only the wealthiest Middle Eastern countries (e.g. The United Arab Emirates) were considered to be viable franchising territories. Now, viable franchise opportunities are spreading to other countries, each of which represents a unique franchise marketplace.

Although American-based franchises represent some of the most recognizable opportunities in the Middle Eastern marketplace, businesses headquartered outside the U.S. also view franchising as a way to grow revenues and share aspects of their cultural identity with consumers in the Middle East.

In an interview with The Daily Times Pakistan, Francorp International president, Ramon Vinay said, "Every country has a unique culture that drives its business and identity throughout the world. So Pakistan has no exception, it needs to share its cultural values and tradition across-the-globe with food items and entertainment services."

Saudi Arabia has become a highly desirable market for many franchises, largely due to the brand recognition of U.S. products and services among Saudi consumers. In fact, U.S. franchises currently dominate the Saudi franchise market, representing more than 70 percent of the nation's franchise operations.

Francorp Saudi Arabia provides several key indicators of the potential for franchising in Saudi Arabia and throughout the region:

  • Approximately half of Saudi Arabia's total population of 23 million is comprised of people under the age of 15 years old -- many of whom have traveled to the U.S. and Europe, and nearly all of whom are eager to purchase U.S. products and services.
  • More than one in four people are expatriate workers who see franchising as a valuable resource for decreasing "product unfamiliarity".
  • The Saudi financial system offers franchise entrepreneurs easy access to international and local banking opportunities.

But franchising in the Middle East also comes with certain unique challenges. It's important for aspiring Middle East franchise entrepreneurs to understand that cultural and religious beliefs across the region may require franchise concepts, including gender separation and advertising messages, to be adapted for local consumers.

U.S. entrepreneurs interested in Middle East franchising should also understand the risks associated with international franchising as well as the franchise law issues associated with franchising in the Middle East. From the outset, franchise entrepreneurs need to determine whether they will sub-franchise with a local developer or establish their own local office, which can significantly complicate the launch and operation of new franchise locations.

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