How to Give Franchise of Your Business in the Middle East (Dubai, Saudi Arabia & Other GCC Regions)

Franchising is one of the most effective and profitable ways to grow a business, especially in the Middle East where many foreign brands adopt franchising as their most favoured path to market.

The Middle East region including Dubai, Saudi Arabia & other GCC areas has converted into a global hotspot for many foreign brands. This is because companies find the Middle East's economic climate to be an interesting proposition.

To put it simply, franchising can be regarded as the most common solution for companies looking to expand their business without spending a huge amount of their own capital. There are an array of franchising opportunities in the Middle East, especially in the food, beverage, hospitality and retail sectors.

According to the experts at Global Intelligence Alliance, the GDP for the Middle East is around $1.4 trillion. Besides this, there is also a population of 315 million people in the region, hence the Middle East can be chosen for new franchising ventures.

Foreign brands are attracted to the Middle East for franchising due to the multiple tax-free zones, more numbers of foreign workers and the elite jet-setters that are keen on investing in flourishing business models. Middle Eastern countries like Dubai, Saudi Arabia and including those in the GCC encourage franchising as it boosts their local economy and offers employment opportunities.

However, before thinking of how to become a franchisor, you need to first pay attention to both the benefits and the hurdles associated with the entire process.

Advantages of Franchising Business

Franchising can be profitable for everyone involved in the venture. Before focusing on how to set up franchise business , it is important to know how franchising is beneficial to any business model.

Here are some of the key advantages of Franchising a business:

Reputation

The key benefit of a franchise is the franchise’s reputation. Hence, if the franchise is already famous for certain products, then customers already know what they can expect from the new local unit.

This will bring additional business especially if the franchise’s reputation is very much positive.

Financing

Franchised businesses have already seen a phase of trial and testing and hence are easier to finance. So getting loans from the banks is comparatively advantageous because of the franchise’s reputation.

The bank knows the success of the franchisee and hence are very generous in supporting business financing.

Cultural Adaptation

Regional franchise partners should offer complete support, this is very important especially when it comes to adapting to the ways of Middle East countries. To make the entire transition more streamlined, hiring regional franchise partners who are very much familiar with the business methods in a country can help.

Growth Advantage

For a franchisee experiencing slow business in their home country’s, opening a unit in another country having strong growth opportunity can be really beneficial. The Middle East is one of the countries that have some exhibiting growth areas.

05 Key Steps to Franchise your Business

Franchising your business typically signifies you can grow your business utilising "other people's money." However, this may not be entirely true, as there goes a lot of work and effort before the payoff. The Franchise setup checklist involves a series of steps and hence it becomes important to go through the complete guide to setup franchise business.

To succeed as a franchise, you must be aware of these 5 key steps:

Step 1: Financial Feasibility

The first and foremost step in the entire franchise process flowchart is Financial feasibility. The financial feasibility of both franchisee and the company should be considered.

Thus, it is very important to create a financial model for both parties. While developing the financial model, the product and services, the capital investment required, operating cost, revenue projections, breakeven sales, ROI, sales projection, pricing model, franchise fee, tax calculations, etc are to be taken into consideration.

Step 2: Operations Feasibility

Operations feasibility takes care of different departments like purchase, accounts, sales, HR, IT, marketing, Admin and Management. The development of SOPs for all of the department is something that should not be overlooked.

Step 3: Legal Feasibility

Legal feasibility is about the legal part involved in any business. Before getting the franchise, you must check the terms and conditions mentioned in the agreement.

The application form needs to be filled after which the letter of intent is signed before going ahead with the agreement. The franchise agreement is the most important document having all the conditions that need to be abiding by throughout the period.

Step 4: Support Your Franchisee

This step can make a huge difference between you and your competitors. For instance, you can help your franchisee in the form of recruitment support, operational support, training support such as software training, audit support and so on.

All of these parameters are very much valuable for your franchisee.

Step 5: Marketing Support to the Franchisee

If somebody takes your franchisee, it means they are showing confidence in your brand and your products. Hence, they would assume ease in getting the customers and that there will be no hassle in finding the customers.

This needs to be justified by the company by doing the right kind of marketing so that the franchisee gets the customer.

 Why YRC to build your franchise plan?

Your Retail Coach is by your side as a franchise business consultant if you need any help with strategy formation or creating the roadmap. We can help you prepare the financial model, search for the right franchise partner, create the legal agreements, develop SOPs and establish the audit process.

YRc has a team of franchise experts that works closely with the clients to have a better understanding of their business as well as the requirements. We help you make better decisions when it comes to deciding the correct path for growth and expansion by formulating an effective expansion strategy.

At YRC, we understand how important it is to have a franchise plan as, without careful assessment, a franchise dealer can face extreme losses. Hence, it is our key priority to focus on everything from the expenditure required and turnover to revenues and pricing before developing a franchise plan.

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Category: eCommerce Solutions and Developers Profile: Your Retail Coach (YRC) is a retail consulting and outsourcing company in India offering a wide range of services in retail offline, retail eCommerce, and retail omnichannel catering to a multitude of industries. Your Retail Coach (YRC) helps retailers and retail enterprises set up their eCommerce business right from planning (eCommerce business consulting) to implementation. Our experience and expertise in both offline and online retail channels will help businesses overcome challenges in adop ...