By Reem Abdalla (@Reem096)
Retail Companies have multiple options for market entry expansion in International territories. They range from: acquisitions, organic growth, joint ventures and in-store concessions. However, many retailers and services choose to operate as a franchise. Franchising is a concept used by many businesses as a mechanism to expand and operate globally. Textbook definition of franchising is “a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate markets” (www.franchising.com).
The number of franchises has multiplied numerously in the UAE. This resulted in an increase in the number of opportunities which formed a global bridge between the world and the UAE. This bridge grew smaller exposing the UAE culture to different global food, pop culture, fashion, etc. Global companies such as the likes of Louis Vuitton opened their flagship stores in the UAE, while other companies made UAE home to their brands in the Middle East Market. This gives the UAE a cutting edge to expand and get exposed locally and globally.
Franchising is usually derived from changes in global economic environment such as reduced trade barriers, legislation, etc. Looking at the UAE, franchising has not only been in the fashion, food and arts but also in education. As world-class educational facilities have opened their universities and institutes in the UAE, for example, the World-renowned Sorbonne University opened their branch in Abu Dhabi, UAE.
Most franchising companies found in the UAE are brought in the UAE from abroad. Hopefully, in the near future, UAE-based companies get to be franchised in other parts of the world as well. Many UAE-based companies have great potential to being international names. Take “Wild Peeta” as an example. It is an Emirarti new age shawarma restaurant that took the traditional shawarma and added a twist to it. They substituted the flat bread with pita bread and offered a choice of sauces varying from traditional ones to those that are not usually used in a shawarma sandwich, such as, alferedo sauce, Indian sauce, Mexican sauce, etc. The owners, Mohammed and Peyman Al Awadhi, have showed interest in opening their joint in Japan. This can be an opportunity of franchising a UAE-based company in international markets.
Franchising makes it easier to enter new markets with the help of local influences and expertise. The chances of success are higher than any other business. As culture works differently in every region and country, franchisors faces challenges to adapt to their culture. Most of the companies that chose to operate in the UAE as a franchise have adapted their advertising, branding and image to suit the UAE culture.
For example, in the UAE we would not see any provocative ads that may have been the positioning of many of the international brands due to the respect to the UAE culture. For instance, AXE deodorant positions itself as a male deodorant that attracts female attention when sprayed. However, when entering the UAE market, AXE ads have been less challenging and more tamed. In addition, some food outlets have also adapted to the UAE by introducing cultural based dishes to suit taste preferences in the country. Given the example of International names such as McDonald’s that have introduced dishes with a local twist to appeal to the local market such as McArabia and KFC with Rizo (a dish with chicken, rice and Arabiatta sauce), etc.
Franchising has given UAE citizens the opportunity to experience different culture, food, art and education and to get introduced to numerous strong and powerful brands in their own country rather than travelling abroad. This opportunity has allowed UAE citizens to excel by being exposed to various nationalities, different cultures and the knowledge that comes with it. This is an advantage to put UAE citizens and the UAE on the map.
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Reem aims through her quarterly column to explore issues in society and discuss emerging new trends. Listen to other people’s thought and view their perspectives about the subject. Then raise questions and form unbiased conclusions about it.