Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market

Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market
McDonald's chain restaurants in Dammam, Saudi Arabia. Shutterstock
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Updated 07 March 2025
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Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market

Franchises boosting Saudi economy, as Kingdom dominates half of MENA’s $30bn market

JEDDAH: Franchises are proving increasingly vital to Saudi Arabia’s economic development, driving employment, government revenue, and cultural transformation in a youthful nation.

Economic experts have told Arab News that the introduction of a law in 2019, followed by expansion of regulations the following year, helped open the Kingdom up to international businesses, as well as strengthened the relationship between franchisors and franchisees.

These moves, together with the economic expansion of Saudi Arabia as part of the Vision 2030 initiative, means the Kingdom now accounts for nearly half of the $30 billion franchise market in the Middle East and Africa, according to Yaseen Ghulam, associate professor of economics at Riyadh-based Al-Yamamah University.

He told Arab News there is consensus among researchers and industry observers that franchise businesses are expected to grow by more than 20 percent per annum for the coming five years and beyond.

“This presents an exceptional opportunity for international brands to enter the Kingdom through franchising, given the fact that European and North American consumer markets are struggling due to economic uncertainty, unemployment, and higher cost of living,” Ghulam said.

He added that franchise registrations in the Kingdom stood at 1,788 by the end of the third quarter of 2024, up from just 185 three years earlier.

With 1,232 entries, the accommodation and food services sector — which includes lodging facilities, dining establishments, and enterprises associated with tourism — led the registrations, the associate professor said.




Yaseen Ghulam, associate professor of economics and director of research at the Riyadh-based Al-Yamamah University. Supplied

He added that the wholesale and retail division came in second with 689, and the transport and storage sector with 257. An important element of this development, he noted, is more widespread activity, covering almost all major cities, rather than clustered around one particular region or sector.

“With 647 franchise registrations, Riyadh has led the field, followed by Makkah with 363, and the Eastern Province with 225. According to some estimates, over 1,200 brands are available for franchising, and the franchising sector in Saudi Arabia is offering over 10,000 business opportunities.”

Ghulam noted that more than 600 international and 380 local franchise brands are present in the Kingdom, according to the Small and Medium Enterprises General Authority, known as Monsha’at.

Abdullah Al-Maghlouth, a member of the Saudi Economic Association, told Arab News that government support for SMEs through streamlined processes and a business-friendly environment has helped drive the franchise sector. 

He added that the 2019 law bolstered the Kingdom’s business ecosystem, attracting local and international investments through a clear legal framework.

“The 2020 executive regulations complement this by providing a comprehensive legal environment that facilitates franchise operations and ensures guarantees for all parties involved. This enhances transparency between franchisors and franchisees, making the Saudi market increasingly appealing to investors,” Al-Maghlouth said.

Reflecting on the key factors driving growth in the sector in the Kingdom, Ghulam said Monsha’at’s Franchise Center is “aggressively advancing entrepreneurship” through different programs, such as Tomoh. 

He added that trademarks are now fully protected thanks to the Kingdom’s recent successful implementation of an intellectual property rights plan, with online portals making trademark registration and protection simple and accessible. 

Financial guarantees provided by the Kafalah program are also proving to be a factor in sourcing finance from local investors, Ghulam said, and he noted that the Social Development Bank has played a significant role in advancing franchising in the Kingdom. 

The institution provides financing solutions ranging from SR150,000 ($40,000) to SR4 million with a maximum financing length of 8 years as part of its program to assist new franchise developments and expansion.

“Another significant step in bolstering the franchise community is the founding of the Saudi Franchise Association, the Kingdom’s first specialized association. It has worked to promote the idea and culture of business excellence since its foundation. Additionally, it has organized numerous seminars and workshops and signed various partnerships with colleges and chambers of commerce,” said Ghulam.

Arrangements are also in place in Saudi Arabia to support franchise business and provide consulting. For both domestic and international businesses, Arab Franchise Marketing Corporation provides media platforms, administrative and legal services, and new franchise opportunities. “Through useful solutions, they work with a profit system to grow the franchise market in the MENA area, especially in Saudi Arabia,” said the associate professor.

Highlighting how Saudi Vision 2030 has influenced the development of the franchise market, Ghulam said that the objectives of Saudi Arabia’s Vision 2030 are to invest in globally competitive industries, diversify the country’s economy, boost the private sector, and create jobs.

“Following this, one important economic area that is highlighted in Vision 2030 is franchising. For the success of the Vision, a comprehensive legal, regulatory, financial, and economic set up was needed and has been established for the promotion of the private sector to diversify the economy and reduce dependence on the oil sector,” he said.

The development, he added, of the basic and changed framework has indeed helped the private sector grow in the last few years.

Ghulam said that the franchising industry has greatly benefited from Vision 2030, with support mechanisms, new institutions, and financial aid serving as key enablers.

He added that investment in mega projects, sports events, and facilities has created youth employment, raised real wages, and driven demand for sectors like education, health, dining, beauty, and fitness.

This has attracted international franchisors and local investors, fueling significant growth in the sector.

Ghulam emphasized that Vision 2030 has also shifted the mindset of Saudi youth, encouraging private sector roles and self-employment through franchising, offering substantial returns on investment.

He advised foreign brands seeking to expand into the Saudi franchise market that there is significant potential in sectors such as food, retail, and education, as well as health, fitness, and sports.

“More specifically, customers are quite fond of education franchises, including both domestic and international franchises that focus on training, early childhood care, development centers, and tutoring,” Ghulam said.

He continued that Saudi Arabia’s focus on health-related industries has driven high demand for gyms, nutritious food franchises, and medical services, adding that loosened social regulations, particularly for women, and government support for regional designers have boosted the retail sector, particularly fashion.

Al-Maghlouth agreed that beyond traditional sectors like tourism, hospitality, and food, the Saudi franchise market will continue to expand into emerging fields such as technology, education, and healthcare.

“The supportive legal framework will continue to enhance market transparency and drive growth in economic activities, fostering a sustainable investment environment. This will not only benefit all stakeholders but also solidify Saudi Arabia’s position as a leading investment destination in the region.” he said.


Radisson doubles down on Saudi Arabia with aggressive hotel expansion

Radisson doubles down on Saudi Arabia with aggressive hotel expansion
Updated 14 May 2025
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Radisson doubles down on Saudi Arabia with aggressive hotel expansion

Radisson doubles down on Saudi Arabia with aggressive hotel expansion

RIYADH: Saudi Arabia now accounts for half of Radisson Hotel Group’s Middle East portfolio, as the Kingdom cements its role as a global priority for the hospitality giant. 

The company currently has 100 hotels either open or under development across the region, with 50 of them located in Saudi Arabia, revealed Radisson’s top executive in an interview with Arab News on the sidelines of the Future Hospitality Summit in Riyadh. 

The expansion aligns with Saudi Arabia’s fast-growing hotel sector, as the Kingdom plans to add more than 362,000 new hotel rooms by 2030, backed by a $110 billion investment. 

Elie Younes, executive vice president and global chief development officer at Radisson, said: “Saudi Arabia sits in one of the top five countries for us globally.”  

He said that of the 50 hotels in Saudi Arabia, 30 are open and 20 are under construction. 

Providing details and a timeframe for their planned 20 hotels in Saudi Arabia, Younes said the projects will be rolled out over the next three to four years, with an additional 30 hotels expected to open in the following three to four years. 

The new wave of properties will translate into approximately 4,000 to 5,000 rooms. “If you multiply 20 by 200 to 250, you will get 4,000 to 5,000 rooms currently planned under construction in Saudi Arabia, which will eventually also make an economic impact because that will create job opportunities for approximately 5,000 people,” said Younes. 

Radisson is also ramping up its presence in the capital. The company recently opened Radisson Blu Minhal in Riyadh and plans to launch its third Radisson Collection hotel in the city soon.  

The Mansard Hotel, part of its urban portfolio, was noted as the brand’s first resort in Riyadh. Service apartments under the Radisson Collection brand are expected to open in the next four months. 

The group sees strong potential across multiple segments. “There is room for another 10 to 15 Radisson Blu hotels. As for Radisson Collection, which is our entry-level luxury brand, there will be fewer opportunities to grow it because of its luxury nature — maybe four or five more hotels. We already have three in Riyadh alone,” he said. 

Younes highlighted the scalability of the core four-star Radisson brand, particularly in smaller Saudi cities.  

“We recently opened three of them here in Riyadh alone, and I think we could open at least or sign another 20 or 30 of them in the Kingdom across the next four to five years, focusing on places like Riyadh, Jeddah, Makkah, and Madinah… to some extent, and specifically, after that, in some of the secondary regional cities, where we also see opportunities for business development,” he explained. 

Commenting on global tariffs, Younes said it is difficult to assess the impact of what he described as a “semi-political, semi-non-political” decision. 

 “We don’t see that to have a direct impact in Saudi Arabia because — you have to remember that — over 50 percent of the travel industry in Saudi Arabia is domesticated in terms of traveling, and over 90 percent of investments in Saudi Arabia comes from Saudi Arabia,” he added. 

Younes also spoke about broader trends in the hospitality industry, including growing traveler volumes and a heightened focus on sustainability. “I think we are very lucky and should be grateful to work in this industry because it is one of those ever-growing industries,” he said. 

He noted shifts in travel behavior as business and leisure increasingly merge: “People going for a long business trip but integrating into that trip a little bit of fun, bringing the wife, bringing the kids, spending the extra day. Wanting to have fun.” 

The executive noted that operational challenges are mounting, driven by rising costs and technological disruption. “The cost of labor going up. Inflation going up. The influence of artificial intelligence. All of these elements will push us and will result in us becoming more efficient,” he said. 

While artificial intelligence will likely shape back-end operations, Younes emphasized the enduring value of human service: “The human touch will never go away. We all know that.” 

Looking ahead, he sees the convergence of hospitality and residential real estate as a key evolution in the sector.

“I see more integration and fusion between the conventional hospitality and residential real estate as we move forward to try and achieve all of these efficiencies and economies,” he concluded. 


Closing Bell: Saudi main index closes in green at 11,532 

Closing Bell: Saudi main index closes in green at 11,532 
Updated 13 May 2025
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Closing Bell: Saudi main index closes in green at 11,532 

Closing Bell: Saudi main index closes in green at 11,532 

RIYADH: Saudi Arabia’s Tadawul All Share Index extended its upward momentum for the second consecutive day, gaining 43.62 points, or 0.38 percent, to close at 11,532.27.

The total trading turnover of the benchmark index reached SR5.37 billion ($1.43 billion), with 120 listed stocks advancing and 121 declining.

The Kingdom’s parallel market Nomu also closed higher, rising 585.86 points to end at 27,928.99.

Meanwhile, the MSCI Tadawul Index edged up 0.41 percent to close at 1,474.55.

The best-performing stock on the main market was Saudi Arabia Refineries Co., whose share price jumped 9.85 percent to SR65.80.

Zamil Industrial Investment Co. also saw gains, with its stock rising 7.73 percent to SR47.40.

ARTEX Industrial Investment Co. recorded a 4.35 percent increase, closing at SR13.44.

On the other hand, Gulf General Cooperative Insurance Co. saw its share price decline by 6.45 percent to SR7.11, making it one of the worst performers of the day.

On the announcements front, Al-Babtain Power and Telecommunication Co. reported a net profit of SR88.2 million for the first quarter of 2025, a 6.77 percent increase compared to the same period last year.

The company attributed the rise to improved productivity, cost reductions, and stronger profit margins. Its share price rose 1.45 percent to SR49.

Tabuk Cement Co. posted a 28.35 percent year-on-year decline in net profit for the first quarter, reaching SR13.04 million.

In a statement to Tadawul, the company cited a decrease in sales and other income as the primary reasons for the drop. Its stock fell 0.50 percent to SR11.90.

Riyadh Cement Co. reported a net profit of SR75.68 million for the first quarter, up 7.95 percent from the same period a year earlier, driven by increased sales volume and higher average selling prices. Its share price rose 0.45 percent to SR33.35.

Arabian Drilling saw its net profit plunge 48.63 percent year on year to SR75 million in the first quarter. Its stock declined 1.78 percent to SR82.90.

Fawaz Abdulaziz Alhokair Co., also known as Cenomi Retail, reported a net profit of SR1.8 million for the first quarter, reversing a net loss of SR151.7 million in the same period last year.

The company credited favorable seasonal dynamics and a continued focus on operational efficiency for the turnaround. Cenomi Retail’s share price rose 2.71 percent to SR15.94.

Al-Jouf Agricultural Development Co. reported a net profit of SR34.65 million in the first quarter, up 5.26 percent year on year. Its share price increased 1.76 percent to SR49.15.


Aramco to sign MoUs with NextDecade, Sempra for 6.2m tonnes of LNG

Aramco to sign MoUs with NextDecade, Sempra for 6.2m tonnes of LNG
Updated 13 May 2025
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Aramco to sign MoUs with NextDecade, Sempra for 6.2m tonnes of LNG

Aramco to sign MoUs with NextDecade, Sempra for 6.2m tonnes of LNG

RIYADH: Saudi Aramco will sign on Tuesday memoranda of understanding with US liquefied natural gas producer NextDecade and utility firm Sempra , Aramco’s chief executive said, as the oil giant expands in the LNG market.

“The US today, in terms of gas, is almost 100 billion (dollars) in sales ... and it is continuously increasing,” Aramco’s CEO Amin Nasser told the US-Saudi Investment Forum in Riyadh.

“The US is really a good place to put our investment,” he added, noting that under the MoUs Sempra and NextDecade would supply around 6.2 million tonnes of LNG to Aramco.

The US is already the world’s largest exporter of LNG and producers have plans in place that would double capacity in coming years.

NextDecade last month signed a deal with a subsidiary of Aramco, which is seeking to become a big player in the LNG market, under which the US firm will supply the superchilled gas from its Rio Grande facility for 20 years.

“We do have other investments. So we’re looking at, by 2030, almost seven and a half million tons of LNG,” Nasser noted, speaking of expansion plans.

Nasser also said that one of the investments that Aramco plans to sign on Tuesday involved an expansion of the Motiva Port Arthur’s refinery in the US, noting the oil giant would invest $3.4 billion in the refinery.


SMEs account for 30% of listed companies in Saudi Arabia: CMA chief 

SMEs account for 30% of listed companies in Saudi Arabia: CMA chief 
Updated 13 May 2025
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SMEs account for 30% of listed companies in Saudi Arabia: CMA chief 

SMEs account for 30% of listed companies in Saudi Arabia: CMA chief 

JEDDAH: Small and medium enterprises now constitute 30 percent of listed companies in Saudi Arabia, following significant efforts by the Capital Market Authority to streamline the listing process and enhance the parallel market, according to CMA Chairman Mohammed El-Kuwaiz.

Speaking during “Finance Week” at the SME Support Council — an event organized by the Small and Medium Enterprises General Authority, also known as Monsha’at — El-Kuwaiz underscored the regulator’s commitment to broadening financing options and encouraging more SMEs to enter the capital market.

According to the Saudi Press Agency, El-Kuwaiz highlighted the 2017 launch of the parallel market, Nomu, as a major milestone in expanding access for smaller firms. Since then, 14 companies have successfully moved from Nomu to the main market, underscoring the strength of the investment ecosystem.

The Kingdom is targeting a 35 percent contribution from the SME sector to its gross domestic product by 2030, in line with the Vision 2030 economic diversification plan.

El-Kuwaiz noted that the Nomu index has grown tenfold since its inception, with market capitalization soaring 26 times to nearly SR60 billion ($16 billion) by the end of 2024. Liquidity has also surged, with trading values reaching approximately SR14 billion this year — an eightfold increase.

To further ease capital market access, the CMA has introduced a suite of new tools, including direct listings and regulatory simplifications, in collaboration with strategic partners. As a result, companies now have access to nine distinct financing options, most of which were developed in recent years.

The CMA chief also pointed to the rapid growth of the fintech sector within capital markets, with revenues more than doubling — up 105 percent compared to 2023.

He emphasized the growing importance of credit ratings and evaluations in securing financing, particularly through debt instruments, which are increasingly vital for fostering sustainable growth in the financial sector.


Jordan’s industrial index rises 2.73% in Q1 2025: official data

Jordan’s industrial index rises 2.73% in Q1 2025: official data
Updated 13 May 2025
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Jordan’s industrial index rises 2.73% in Q1 2025: official data

Jordan’s industrial index rises 2.73% in Q1 2025: official data

RIYADH: Jordan’s industrial production index climbed 2.73 percent year on year in the first quarter of 2025, reaching 87.62 points, driven by robust growth in manufacturing and electricity output, according to data released by the Department of Statistics.

Manufacturing production rose 3.2 percent during the first three months of the year, while electricity output increased 4.97 percent, the Jordan News Agency, Petra, reported. However, the extractive industries sector declined by 8.03 percent over the same period.

The rise in industrial activity comes as Jordan’s inflation rate accelerated by 2.21 percent annually during the first two months of 2025, fueled by rising prices in several key commodity groups.

The upward trend in the index was also reflected in January’s figures, which showed a 2.76 percent annual increase to 88 points.

In March alone, the industrial index grew by 1.73 percent year on year, reaching 87.62 points compared to 86.13 points in March 2024. Petra noted this growth was supported by a 3.38 percent increase in manufacturing and a 4.02 percent rise in electricity production, despite a sharp 23.89 percent decline in extractive industries.

Month on month, the index rose 0.44 percent from February to March, increasing from 87.24 to 87.62 points. During this period, the extractive sector rebounded with a 9.96 percent increase, while manufacturing inched up 0.41 percent. The electricity sector, however, contracted by 7.18 percent.

Meanwhile, Fitch Ratings earlier this month affirmed Jordan’s long-term foreign currency issuer default rating at “BB-” with a stable outlook, citing macroeconomic stability and ongoing fiscal and economic reforms.

The US-based agency highlighted Jordan’s resilient financing environment, supported by a well-capitalized banking sector, a robust public pension fund, and sustained international assistance.

Despite the stable outlook, Jordan’s credit rating remains lower than several of its regional peers. In February, Fitch reaffirmed Saudi Arabia’s rating at “A+” with a stable outlook and the UAE’s at “AA-.”

A “BB” rating indicates a higher vulnerability to default risk in the event of unfavorable economic or business conditions, although some financial flexibility remains.