Franchising is positioned for explosive growth in countries scattered throughout the Middle East, Francorp said in a report, with new franchise opportunities popping up throughout the region.
Saudi Arabia has become a highly desirable market for many franchises, largely due to the brand recognition of US products and services among Saudi consumers. In fact, US franchises currently dominate the Saudi franchise market, representing more than 70 percent of the nation's franchise operations.
Francorp said Saudi Arabia provides several key indicators of the potential for franchising in Saudi Arabia and throughout the region as its approximately half of Saudi Arabia's total population of 23 million is comprised of people under the age of 15 years old – many of whom have traveled to the US and Europe, and nearly all of whom are eager to purchase US products and services.
More than one in four people are expatriate workers who see franchising as a valuable resource for decreasing "product unfamiliarity".
The Saudi financial system offers franchise entrepreneurs easy access to international and local banking opportunities.
However, franchising in the Middle East also comes with certain unique challenges. It's important for aspiring Middle East franchise entrepreneurs to understand that cultural and religious beliefs across the region may require franchise concepts, including gender separation and advertising messages, to be adapted for local consumers.
US entrepreneurs interested in Middle East franchising should also understand the risks associated with international franchising as well as the franchise law issues associated with franchising in the Middle East.
From the outset, franchise entrepreneurs need to determine whether they will sub-franchise with a local developer or establish their own local office, which can significantly complicate the launch and operation of new franchise locations.
The Saudi Gazette