JEDDAH, 27 June — Franchise opportunities available within Saudi Arabia and overseas were discussed at the Second Middle East Franchise Investors Forum held at the Jeddah Chamber of Commerce and Industry on Monday night.
Inaugurating the forum, held for the second year in a row, JCCI Secretary-General Dr. Majed Al-Kasabi said small and medium enterprises could benefit from and expand their businesses through franchising. “There may be more than 100 such enterprises ready for franchising but their management techniques have discouraged them from becoming franchises,” he said.
In his introductory remarks, Middle East’s franchise pioneer Talal M. Badkook said franchising was taking off in the region and there had been growing evidence of it from the tremendous interest generated by the region’s business community.
“There is an environment of privatization taking root in the Middle East which, combined with the increasing importance of the private sector, diversification of industries and easing of investment rules, is helping to cultivate the growth of franchising,” he said.
According to a recent study, franchising in the Kingdom was growing at a phenomenal rate of 10 percent a year — outpacing other industry sectors, and was dominated by fast-food franchises, which make up an estimated 35 to 45 percent of them. “However, there are still many untapped sectors in the region,” he added.
“The forum will also prepare local businessmen who are embarking on a tour of Singapore to study its franchise market,” Sary M. Hamway, managing director of FDS ME, said during his presentation on “Franchising in Saudi Arabia.” Nearly two-dozen local businessmen interested in expanding their businesses through franchises will visit Singapore, which will coincide with the island state’s third international exhibition and conference for franchising, licensing and business opportunities from Sept. 19 to 21.
Singapore’s franchise market claims to have an 80 to 90 percent success rate, whereas it is estimated to be only 40 to 50 percent in the Kingdom. Albert Kong, president and chief executive officer of the Singapore-based FDS (Asia) who presented the Singapore’s experience in franchising, told Arab News that he would also be examining the local franchise market and see its adaptability. “I want to see whether the Singaporean franchising experience could be usefully adapted to the Kingdom’s conditions,” he said.
Kong suggested the formation of a franchise association together with the respective chambers of commerce and industry. “Local franchise seekers should pay attention to factors like uniqueness of the business concept, cultural sensitivities and competence or strength in the long term before buying a franchise,” he said.
“A lot of American franchises which are thriving in many countries are here but not all of them are successful. Reasons could be varied,” said Kong, who heads seven FDS offices in the Far East.
“What’s successful in one country need not be so in another country, but much depends on local needs, conditions and management techniques, as well as the size of the market,” said Kong.
“Buying a franchise does not guarantee success. Team work and commitment coupled with integrated and intelligent management, especially on the financial side are essential part of making it a success,” Kong said.
Although an island state, Singapore today has over 280 franchises successfully working, mostly in the food and education sectors, according to Kong.
