Forum in Dubai contributes significantly to regional franchising market’s growth

The World Franchise Forum and Exhibition 2016 was held recently in Dubai.
The World Franchise Forum and Exhibition 2016 was held recently in Dubai.

The premier franchise event in the Middle East, the World Franchise Forum and Exhibition 2016, was held recently in Dubai with the aim of capitalizing on the region’s substantial potential for franchising and providing a platform for global brands seeking to carve a niche in the regional franchise industry.

“Dubai became the perfect venue for the forum and exhibition as the emirate serves as the focal point of robust business activities across the region,” World Franchise Associates Chief Operating Officer Sary Hamway told Gulf News Journal. "The extremely successful 2016 edition was almost 10 times bigger than the first one launched eight years ago. We are confident that we can further increase the number of our exhibitors, visitors, participating brands and investors in our event’s future editions.”

Most of the premium brands have already established their presence in the Middle East-North Africa region. Franchising offers these international brands an opportunity to expand and carve their niche in the regional market, with its business model having been proven to be highly successful.

‘’The event significantly contributes to the regional franchising market’s growth, which is now increasing at a minimum of 20 percent per year,’’ Hamway said. “Additionally, we will introduce new relevant topics such as women in franchising, how to support small- and medium-size business, and micro-franchising, among others, as part of our contribution to the growing franchise industry in the region.’’

The Middle East’s franchising industry is expected to continue to grow in the long term. In the Gulf Cooperation Council, the United Arab Emirates (UAE) market is geographically smaller compared to Saudi Arabia, but it has more franchise brands than any other country in the region. This can be attributed to the vision of the UAE leaders, the country’s investments in large-scale and modern infrastructure projects, and superb government services that meet international standards.

Though the UAE market is the most business friendly in the region, Hamway said two key areas still require further development. First is the legislation. Franchising falls under the UAE's Agency Law, which applies to most commercial activities and  is well respected when it comes to distributorship. Franchising in itself, however, is a unique segment that requires specific and dedicated franchising regulations to protect the interest of all parties involved.

The second challenge is for UAE banks to embrace the idea of franchising and, thus, provide banking products and services specific to the franchise industry much like in sectors such as real estate and automotive.

“For example, many major banks in the U.K. have established a dedicated franchise department to assist franchisees and local franchisors,” Hamway said. “Unfortunately, this kind of service is not yet available in the UAE. Generally speaking, if all essential elements for success are in place such as good location, excellent management team, smooth operations and modern management systems, a good franchise should generate a 20 percent return on investment every year.’’

There are many new developments in the franchising industry in the region, in which digital and social media play a significant role. Food and beverage, retail, fashion, and health and beauty have been effectively leveraging social media networks to promote their products and services and widen their reach.

‘’The marketing tools have transitioned from traditional to digital, with many brands now heavily relying on social networks for their promotional activities, and other initiatives aimed at gaining customer loyalty and generating repeat business,’’ Hamway said.

The forum intends to incorporate a separate section in the future for small and micro businesses in recognition of their huge economic contributions, and provide a pavilion offering relevant seminars and presentations to help them understand franchising.

 ‘’This is important especially since major industry players have been dominating the regional franchising sector,” Hamway said. “Small entrepreneurs need all the help they could get to become successful and compete with large companies. Being born and raised in the region, I have personally witnessed the positive economic impact of franchising, especially in terms of providing jobs to fresh graduates and young entrepreneurs.’’

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