Opinion: Launching international F&B brands
Internationalising your brands sounds sexy. For the brand owner, you’ll land some easy money from franchising and enjoy a glamorous global jet-setting lifestyle. For the local operator, you buy a brand name, which means you put it above the door and it’ll pull the crowds. The franchiser provides the menus, the training, and tells you what you need to do to make even more money. You can buy a villa with a swimming pool and live the dream. Simple, right? Well, maybe not!
Doing your homework
You only need to look at Dubai to see the consumer demand for international brands in the Middle East. While home-grown concepts are growing, there is still big scope for bringing an established concept into the market. With it comes a number of eager franchise partners. These come in all structures and sizes, as do the opportunities. At the event we were told the key to getting started was doing your research. Analyse market needs, gaps, the consumer tastes for foreign flavours, and styles of operations that suit the brand.
The biggest piece of advice our panel gave is to remember it’s your business and you need to work hard to get it to work. What the franchiser is providing is a great framework, a reputation, and much of the work already done. You now need to get it firing in your country! Expect hard work.
Once you’ve done your research, it’s time to look for a potential brand. For someone that has run brands and represented brands from Europe, my advice is don’t think it’s going to be easy. Our panellists highlighted two ways of working, one was to work with agents or consultants who will help analyse the market, and find great brands — they may provide more credibility with any approach to brands. If you know the origin market you are looking for brands, you could work with consultants there. The other is to do it internally, analysing industry news and trends through online research and then visit destinations. This will be more long winded and may lack the context that will help you make a good decision.
Build a relationship
Once you’ve started conversations with potential brands, it’s vital you build a relationship. Like a marriage, this is going to be a long-term relationship. Both businesses need to get to know each other and work out if you can work together. This will often come down to personalities.
The guidance is to spend lots of time together, talking through all the scenarios. Remember that relationships are always easy through the good times, but become tough when there is pressure — that will come later.
Interestingly, many international brands are starting to split the KSA market from the rest of GCC or are selling country by country territories — rather than the whole of the GCC, which was traditionally the case.
The proof is in the pudding
Going back to my original comments about this being easy, let’s be clear, it’s not. It’s going to be tough. Opening any new restaurant business is hard, especially with multiple partners involved and new regions with time differences and travel involved. It will be easier if both partners have franchised before and know the nuances. If you haven’t, give it time and allow lots of time to get it right. Remember that the company will want to ensure their brand is best represented and it will be a learning curve, with friction.
Our expert panel said that ideally you want someone who knows the brand supporting day-to-day at the beginning, not just periodically. In deals I’ve been involved with, an experienced GM and chefs from the brand may work alongside the local manager for a good few months to get in right. In the case of established franchisors with lots of units, it may be far better documented and the support may be less.
Localisation comes with trust
Localisation is required for most brands, this needs to be negotiated and well championed. In the case of Saudi Arabia, that will mean menus changed for halal products, no alcohol, and it has often meant separate seating areas for families, although it was fascinating to see and hear about this changing rapidly.
As you go on your journey you may find more that you feel should be changed. The brand owner will likely push hard against changes, encouraging purity of brand. It is important to discuss and find ways that you can maximise trade while respecting the brand you are working with. This will come with time, understanding and respect.
James Hacon is managing director of Think Hospitality, which advises multi-site brands on growth, brand and development strategy, as well as investing in early-stage concepts with a bright future.