Franchise

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This is the first group of services we specialize on. Consultation services specialized in franchise development, including helping SMEs to grow through franchising method, help franchisors to recruit prospects and all franchising ongoing services. The company has recently signed a licence agreement with one of the most international reputable brand based in the U.K, and that specialize in the field of franchise consultations with more than 25 years of experience.  www.franchisecompany.co.uk

Use our specialized expertise to establish businesses franchise system, through the following services.

    • Feasibility studies for existing businesses, to assess their viability and suitability for franchising
    • creating the franchise package for new start up franchisees
    • Preparing business plans and financial models
    • Help UK/international clients to expand in the Saudi market.
    • Help Saudi franchisors to expand in the UK and other European markets.
    • Ongoing operational and marketing support.
    • Territory analysis based on demographics.
    • Creating state of art operating manual.
    • Help in enhancing the marketing plan.
    • Establish the franchise agreement document.
    • Create recruitment procedures.
    • Help in drafting the marketing brochure.
    • Financial forecasts for franchisors and franchisee.
    • Help you to recruit local and international franchisees.
    • Help franchisee to raise finance through al Tasleef bank.
    • Act as in-house franchise department to receive inquires.
    • Use our experience to create a state of art training materials.
    • Enhance your existing business systems.
    • Workshops to fully understand the franchise.
    • Provide you with on-going support.

Saudi Market

Saudi Arabia is the largest market in the Middle East with the fastest growing economy in the region. The oil sector remains the core of economic activity in Saudi Arabia, providing the financial backup for government expenditure plans and broader economic confidence. Due to sustained high oil prices over the last few years, the Saudi budget and current account surpluses are at record levels. With growing liquidity available, the non-oil economy continues to strive and has been the main engine of economic growth. The Saudi government has placed a large emphasis on economic diversification and has increased private sector participation. A published economic study by a local bank stated that there would be substantial growth in the non-oil sector despite the slump in oil revenues. Hundreds of billions of US dollars will be spent in the next 10 years on these highly ambitious and diversified projects taken up by the Kingdom of Saudi Arabia. With relatively low inflation rates, low taxes and ample capital availability, Saudi Arabia remains an attractive destination for foreign investments.

Saudi Franchise Market

Franchising has witnessed remarkable growth in the Middle East region over the last few years with an increasing number of international companies seeking to establish a presence in the region. According to a business journal, franchising projects represent 50 percent of retail business models worldwide with a total value of $9 billion, out of which 5 percent is represented by the Middle East. The past five years have witnessed a tremendous growth in the Franchise market in Saudi Arabia with many successful American, European and local franchise concepts taking shape. Many of the international brand names are already well entrenched in the market, and some of the big local brands names have already developed their franchise model. It is estimated that Saudi Arabia represents a multi-billion dollar market for franchising with an estimated value of $1.3 billion in annual fees and royalties, and expected to grow an average of 12-15 percent per year. Most of the franchise concepts are focused in the restaurant, food & beverage and retail fields. Catching on the trend, many local Saudi franchise developers have managed to promote more than 30 Saudi concepts using franchising within the Kingdom, with some of them having gone international. Franchising is perceived to be an ideal business model for small to medium enterprises (SME’s) in Saudi Arabia.
Marcom research shows that Saudi franchise developers managed to develop more than 30 Saudi concepts within the Saudi market; some of them even have gone internationally. Currently, it is estimated that more than 300 Saudi successful concepts are potential franchisors that need to be developed.

Market Trends and Analysis

Saudi Arabia is the largest market in the Arabian Gulf and the Franchising approach continues to expand in several business sectors. A thriving economy coupled with a growing and young population makes Saudi Arabia an inviting market for the franchising industry. With a per capita reaching its highest level ever at $18,531 and a young population, 57 percent are under the age of 25, both combine to provide an important base for the franchising sector. Saudi youths usually opt for managing and operating their own businesses, which in turn opens up opportunities for growth along various franchising sectors. Moreover, there is an overwhelming number of Saudis who have studied and travelled abroad extensively, and who have acquired a taste for Western trends and culture. As such, these entrepreneurs elect to acquire and work with a recognized and renowned brand, which facilitates and streamlines their business undertaking. The latest figures revealed that there are close to 500 international franchise concepts prevalent in the market encompassing areas such as food & beverages, retail, automotive services, healthcare, education, furniture, hotels, cosmetics, laundry services, apparel, patisseries, juice centres, corn shops, etc. It is also estimated that 20-30 franchise brands were locally conceived, especially in the food and beverage sector, including Herfy, Al-Tazaj, Steak House, Hungry Bunny, Dajen, Dr. Café, and Kudu.
The Saudi government encourages and supports private sector contribution and growth in line with its strategy to diversify the economy and lessen dependence on oil resources. The government provides soft and subsidized financing to assist Saudi entrepreneurs and youths with start-up projects. The Centennial Fund is one such organization that provides financing and mentoring to young Saudi entrepreneurs. The Saudi Chambers of Commerce & Industry also have been instrumental in promoting new business concepts through their members and committees.
There are no guidelines for franchising in Saudi Arabia. The Saudi government uses commercial company law as a baseline for franchising. Recently, the Saudi government permitted foreign companies to engage in wholesale and retail trade where many franchise companies are categorized, thus allowing foreign partners to own as much as 75 percent of the Joint Venture. U.S. companies wishing to do business in Saudi Arabia must have a joint venture with a Saudi partner. The partnership would allow for up to 75 percent equity partnership for the foreign (i.e. U.S.) partner. In the beginning, the percentage would likely be closer to 50-50. After perhaps three years, the foreign partner is allowed to own equity up to 75 percent in the Joint Venture.
The majority of the franchises operating in Saudi Arabia are owned and managed by a select group of merchant families who possess the structure and the resources to handle these franchises, without having to sub-franchise to other parties or business entities.

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