In Egypt, franchising has grown significantly over a short time, especially in the fast-food sector. Currently, there are approximately 40 international franchisors operating in Egypt, including 25 food franchisors and 15 non-food franchisors, with hundreds of individual outlets. The Egyptian fast-food market, dominated by U.S.-based franchisors, has experienced notable expansion since it began in the 1970s, and market sources expect the growth to continue at an annual rate of 10 to 20 percent over the coming years.
During the 1990s, non-food sectors started to develop, and they now have a large market potential. A limited number of companies in the fields of hotel management, car rental, language education, health and fitness, electronics, and computer training are also currently franchising in Egypt.
Actually, Egypt is considered the franchising center of the Middle East with more than $14bn invested in the franchising sector. Thus, franchising significantly contributes to the country’s GDP by speeding up Egyptian economic growth and promoting foreign investment in Egypt. Franchising entered the Egyptian market with the implementation of the Open Door Policy in 1973.
Wimpy, an English fast-food chain was the first to establish a franchise in Egypt. Within a few years, the franchising sector began to see rapid growth and hundreds of international brands established a presence in Egypt.
Examples of famous foreign brands in Egypt include Chili’s, Hard Rock Cafe, KFC, McDonald’s, Pizza Hut, Baskin Robbins, Carvel Ice Cream, and Ruby Tuesday. Other franchising sectors are expanding fast in Egypt, including lifestyle brands, home appliances, and clothing. For example, Ikea has established a home furnishings franchise presence. Furthermore, the large Egyptian population requires the convenient services that franchising can provide across all sectors. As a result, franchising in Egypt is an emerging market. Cairo, for instance, is the location of 65% of Egyptian franchised outlets. Another 8.6% are found in Alexandria.
Franchising in Egypt makes it one of the main methods of foreign and local investment.