By: Asyad Omar Al-Haza'a, VP of Franchise Arabia
The strategic geographical location of the Middle East makes it an ideal destination for international franchise brands looking to expand in new fertile markets. Located at the crossroads of Europe, Asia, & Africa, the region offers lucrative unmatched growth opportunities for brand owners and franchisees.
The Middle East North Africa (MENA) region is generally divided into 3 big markets;
➽ Gulf Cooperation Council (GCC): Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman & Bahrain - This dynamic market represents massive potential for franchise brands. It has an affluent customer base for franchisors and franchisees to benefit from and a combined GDP of well over 2.1 trillion dollars.
➽ North Africa: Egypt, Algeria, Morocco, Tunisia, Libya & Sudan. Egypt is the top franchise destination in North Africa, while Morocco has also proved to be a quality location for several franchise brands.
➽ Levant Countries: Jordan, Palestine, Lebanon, Syria, and Iraq. Jordan leads the way in terms of number of franchise brands operating in the country, while Lebanon falls in second place.
The Gross Domestic Product (GDP) for the MENA region is 5.2 trillion dollars.
It's estimated that over 80% of all retail sales in the GCC markets are generated from sales of international brands. Also, there has been a huge increase in franchises that are breaking into fitness, education, F&B, and tourism throughout the MENA region.
The Kingdom of Saudi Arabia (KSA) represents 60% of the region's franchise market, the F&B sector alone is valued at $13 billion.
The United Arab Emirates (UAE) is the hub of franchise brands in the region with a favorable business environment and unique business opportunities for investors & SME’s.
The five hottest franchise markets in MENA are; Saudi Arabia, United Arab Emirates, Kuwait, Qatar, and Egypt.
MENA IS THE NEXT BIG THING
Here are some of the reasons why the MENA region has become a popular destination for global franchise brands;
➽ Large population of high net-worth individuals.
➽ Business-friendly environment.
➽ Reliable retail infrastructure with many big & busy shopping malls.
➽ The franchising industry is worth $33 billion with 29% annual growth.
➽ Favorable demographic & commercial factors.
➽ Population of 315 million people with annual growth of 3% to 5%.
➽ Receptive market towards international brands.
➽ Common market characteristics and similar culture across the region.
MENA has a growing culture of entrepreneurship, with a growing number of startups and incubators across the region. This has created endless opportunities for brands that offer innovative products and services and can adapt to changing market conditions.
Overall, the MENA region offers unmatched opportunities for international brands looking to expand and grow in the region and seek to adapt and understand the unique cultural and economic factors that can impact their business success in the region.
