More help is needed for restaurants to become franchise chains in the hope that the UAE could spawn its own Starbucks or PizzaExpress, according to a senior official.
The country's franchising industry is worth about US$30 billion (Dh110bn) but Abdullah Sultan al Fa'an Shamsi, an adviser to the Ministry of Economy, believes an independent body or ministry department could help that number grow, by setting up clear rules and providing expertise to small and medium-sized businesses.
"We could then offer that franchise opportunity out to other entrepreneurs," he said on the sidelines of the Arab Food Industries and Franchising Forum in Jordan.
Franchising is already a growth industry, with a quarter more - roughly 400 - systems in operation than there were five years ago. Many people see the option as a safer way to go into business.
"Franchising is a middle ground," said Dr Guriqbal Singh Jaiya, the director of the small and medium-sized enterprises division of the World Intellectual Property Organisation.
"You get a higher return than what you would have gotten with an independent business model, but you pay a royalty fee."
For a restaurant to become a franchise, it must have a registered trademark, a set menu and prices, an interior design concept and marketing plans. The brand must also have manuals that lay down the dining experience in detail.
One business that had made the jump was Al Farooj Fresh, which has franchise leasers in the UAE, some with multiple outlets.
According to Mohammed Diab, the marketing manager for Al Farooj Fresh, successful franchises needed "transferable operations systems" to help every branch feel like part of the chain to customers.
Just Falafel, which opened in 2007 and puts an international twist on the Arab staple, became a franchise in December and has five locations in the UAE.
To help create franchise-wide standards for training and operations, it hired a US consulting firm. The company had to look abroad said Mohammed Bitar, the co-founder and managing director, because the UAE lacked people with the necessary "multinational background".
"I'm not saying we couldn't have done it ourselves, but that would have taken two to three years," he said. "This took around eight months."
The company opened with three options of Lebanese, Indian or Greek-style dishes but has expanded to more than 16 choices, including Mexican. There had been a number of "learning experiences", Mr Bitar said. In the beginning, everything on the menu cost the same, Dh7.
"Some people are willing to pay Dh20 for options, others will only buy the Dh4 sandwich," he said. "So we needed menu items for both."
That ,in turn, shifted the restaurants upmarket. "As our pricing changed, so did our criteria for location."
Mr Bitar hopes to see Just Falafel soon in mall food courts.
"We're not McDonald's or Burger King, so it's hard to pitch it," he said, adding that malls preferred to lease empty spaces to known brands.
He insisted Just Falafel had something more to offer than the US chains that dominated food courts. "Fast food is mostly junk food, and everyone is going to the green, healthier option, vegetarian, fresh dishes prepared daily."
A McDonald's quarter pounder with cheese contains 510 calories and 60 per cent of the recommended daily serving of saturated fat. In comparison, a falafel and hummus sandwich is 318 calories and has no saturated fat.
In 2005, the UN's Food and Agriculture Organisation estimated that the average daily intake per person in the UAE was just over 3,000 calories, almost a third above the recommended limit.
Dr Khaled Ahmed Taki, the president of the Arab Franchise Association, said popularising Arab cuisine could help.
"Hummus, tabbouleh and mixed grills are healthier options," he said, adding the number of local "home-grown" franchisers was increasing each year. He said local brands faced fewer difficulties, with common language, a similar working environment and a greater familiarity with local authorities.
For Mr Bitar, the advantage was clear. Franchising allowed the concept he co-created to grow into a known brand far faster than his team could have managed on their own.
"I could open 10 shops at the same time, or have 10 franchisees open their own shops, and we give them the know-how so they don't make the same mistakes."
mdetrie@thenational.ae
