Franchising
Industry Worldwide
Currently, franchising companies and their franchisees
account for $1 trillion in annual U.S. retail sales in 320,000 franchised small
businesses in 75 industries. Markets outside U.S. borders represent new avenues
of opportunity for franchisors with visions of expansion. While in the U.S., Canada
and part of Western Europe franchising has reached domestic market saturation,
emerging markets remain relatively untapped.
U.S.
franchisors are expanding their operations into many countries previously not
considered, both developed and developing. Canada, while still the most popular
country for U.S. franchise expansion, is today attracting a smaller percentage
of franchising activity than it did six years ago. Researchers said this attributed
to the growing popularity of expansion into other countries.
Asia,
South America, Central America and Mexico are the areas of greatest international
franchising growth.
Small
& Medium Business Enterprises: A
Special Sector
Small
& Medium Enterprises of western countries will find an attractive and comfortable
niche in MENA region. The SME owners will find many similarities within their
own Hands-on Working Approach and the personalized approach preferred by the business
community here.
Focus
On Emerging Markets
Analysts will put three indicators to identify an emerging
economy: the level of economic development, economic growth and market governance.
Countries that are liberalizing their economic institutions and democratizing
their political structures are often referred to as Transitional Economies/Countries.
These transitions have been welcomed by the Western economies and regarded as
opportunities for international franchising expansion.
Middle
East Markets : Advantages & Growth Potential Advantages
The primary
reason of interest in this region is the affluence of Middle Eastern markets,
the preference for quality goods, fairly consistent import standards and requirements.
Middle
East is one of the fastest growing and developing markets in the world economy
today. The region is probably the most investor friendly region with full support
from the Governments, attractive tax free facilities and world class infrastructure.
Add to this improved Intellectual property Legislations, a high number of High
Net-worth Individuals and a young upwardly mobile consumer market keen on leisure
and consumer spending, the Middle East is a perfect answer to business investors.
Potential
Franchising,
essentially is a coming together of the western business entrepreneurs in the
region who exhibit a high degree of professionalism, and the cooperation and dependability
of Arab business professionals.
Franchising in the Middle East is growing at
a commendable rate of 27% annually. The franchising industry worldwide has taken
notice of the enormous potential of Middle East Region.
UAE
- The Gateway to Mena Region
In addition to inter-Gulf trade, Dubai also
reaches an “outlying ring” of huge markets including East African countries,
the CIS, Iran and the Indian sub-continent. Therefore, by establishing a base
in Dubai, international businessmen, manufacturers and exporters of less sophisticated
equipment and mass consumer products can also successfully find readily available
buyers for their goods.
Considerations
For Franchisors
However this should not be presumed that the market conditions
in MENA Region are easy for a new company coming in. In terms of market demography,
government, corporate laws and taxations, labour issues as well as the socio-cultural
dynamics, the Middle East markets are diverse in nature. middle East is a amalgam
of diverse demographic & commercial factors. There are many different countries--each
with its own customs, cultures, languages and laws--which makes expanding into
this market more challenging. thorough understanding, research and analysis of
market and local conditions will be imperative for any new organization entering
the markets.
