Kavin LAL UJJAINWALA

Vinay KUMAR PREMCHANDRAN

Year of completion: 2015

THE UNIVERSITY OF STRATHCLYDE MBA PROJECT

March 11

2015

The Food Franchise War - A study of the growing Franchise market within the food Industry in Dubai which is being infiltrated by International brands thereby leaving very little market share for the homegrown brands to grow.

UNIVERSITY OF STRATHCLYDE BUSINESS SCHOOL

MBA PROJECT The Food Franchise War - A study of the growing Franchise market within the food Industry in Dubai

which is being infiltrated by International brands thereby leaving very little market share for the homegrown brands to grow.

MACBETH - Kavin UJJAINWALA (201257009) & Vinay PREMCHANDRAN (201286569) Project Supervisor: Dr. Frank Martin

11/3/2015

Submitted in partial fulfillment of the requirement of the degree of Master of Business Administration of the University of Strathclyde.

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Statement of Academic Honesty

We declare that this dissertation is entirely our own original work.

We declare that, except where fully referenced direct quotations have been included no aspect of this

dissertation has been copied from any other source.

We declare that all other works cited in this dissertation have been appropriately referenced.

We understand that any act of Academic Dishonesty such as plagiarism or collusion may result in the

non-award of a Master’s degree.

Signed by:

Kavin Ujjainwala

Vinay Premchandran

Dated:

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Abstract

The purpose of this research was to investigate how the influx of international and established food

retail brands, through the franchising distribution method, within the economy of the UAE has affected

the growth of local food retail entrants. Does the influx hinder or support the growth of local brands?

A literature review was formulated after reading through various available journals, thesis and articles.

Literature was discovered which covered the likes of development and franchising food retail brands in

North America and other European countries, however very little literature is written on developing

economies such as the UAE. It wouldn’t be ideal to deduce solely based on the available literature hence

a planned research was undertaken. A gap was identified here as there was no research carried out

which measured the development of home grown brands to those of international food retailers which

are locally governed and controlled by royal families.

We identified players within the market and narrowed down to three key participants who we thought

would provide vital information to uncover the answers based on the three traits of Brand DNA, Core

Product and Social acceptance – Just Falafel (Mr. Fadi Malas), Lemongrass (Mr. Stephane Jacques) and

Mandilicious (Mr. Fayez AL Nusari). We took systematic approach to interview these three clients

keeping our focus on qualitative data rather than quantitative. These primary data collection along with

secondary collected data provided us with deeper understanding of the cultural trends of building brand

equity within this market, how important is differentiating yourself in terms of menu boards even when

you can replicate systems and operations of other international food retailers. In addition to this, we

were able to discuss on how the government is playing a role in empowering the people within the

country to innovate and build ideas, and how the laws, if any, play a role in the franchise business within

the UAE.

Our analysis was broken down to concentrate upon the concept of the brand; it’s USP, the competition

for the brand, and markets. All three brands have distinct offerings, but Just Falafel and Mandilicous are

focused on culturally driven concepts. Just Falafel was even successful in creating a new food category

within the QSR industry as their core product is a Falafel – they have successfully been able to compete

with international retailers due to this. Where Lemongrass is the oldest, as they have been around for a

decade, they have managed to open up to franchising only recently due to its complex operation by

concentrating on a full dine in option and not in the QSR industry. On the flip side, the other two are

highly invested and interested in expanding at a rapid pace through the franchise model.

The UAE has not been at the forefront to create laws governing and protecting the franchise industry

since these are very early stages for the country to experiment with this model. We believe, in the

future an association will be created branching out under the International Franchise Association to

govern such a development and boost the economy further. In conclusion, the three clients supported

the idea of Dubai’s government to welcome and ease the business environment for international food

retail brands as this helped in developing world class home grown brands in light of competition and

knowledge development.

Word count: 23,513

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Acknowledgements

First and foremost, we would like to thank our supervisor Dr. Frank Martin for his disciplined, quick and

profound feedback. He is a devoted professor, who has really taken the time to guide us through the

research. He is incredibly efficient and has an immediate oversight. He taught us the immense value of

building strong arguments supported by facts and data. He consistently showed us that quality

arguments enable identification of patterns.

Furthermore, we would like to thank the participants – Founders and CEO’s – Mr. Fadi Malas from Just

Falafel, Mr. Stephane Jacques from Lemongrass, and Mr. Fayez Al Nusari from Mandilicious who have

given their time in their extremely busy schedules to share their experience and viewpoints. The

extensive nature of the discussion with them proved extremely valuable to the research and motivation

for progress.

Above and beyond, we would take this opportunity to thank our family and friends for being supportive

throughout the years at the University.

The two years at the University of Strathclyde have been great.

Thank you all.

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Contents 1. Literature review ................................................................................................................................... 6

1.1 History of Franchising ......................................................................................................................... 6

1.1.1 Where it all began ........................................................................................................................ 6

1.1.2 Models of franchising and their success story ............................................................................. 6

1.1.3 Governance .................................................................................................................................. 7

1.2 Retail Food Franchising ....................................................................................................................... 8

1.2.1 Benefits of franchising ................................................................................................................. 8

1.2.2 Drawbacks of franchising ............................................................................................................. 8

1.2.3 Economic push that caters to growth .......................................................................................... 9

1.3 Retail Food Franchising in the UAE ..................................................................................................... 9

1.3.1 Geographic Placement of the UAE ............................................................................................... 9

1.3.2 International brands VS Local brands ........................................................................................ 10

1.3.3 Adaptability of local operators with an international conceptualization .................................. 11

1.3.4 Laws governing food franchising ............................................................................................... 11

1.4 Summary of Literature Review ......................................................................................................... 12

2. Research Methodology ....................................................................................................................... 14

2.1 Chapter Outline ................................................................................................................................. 14

2.2 Research Philosophy ......................................................................................................................... 15

2.3 Research Approach ........................................................................................................................... 17

2.4 Research Strategy ............................................................................................................................. 17

2.5 Time Horizons ................................................................................................................................... 18

2.6 Collection of Data .............................................................................................................................. 18

2.7 Data Analysis & Ethical consideration............................................................................................... 19

3. Interview ............................................................................................................................................. 21

3.1 Just Falafel ......................................................................................................................................... 26

3.1.1 The Humble Falafel .................................................................................................................... 26

3.1.2 Taking on the Big Boys ............................................................................................................... 27

3.1.3 Early Adopters ............................................................................................................................ 28

3.1.4 "Locations need to earned" ....................................................................................................... 28

3.1.5 New Frontiers ............................................................................................................................. 30

3.1.6 Government Governance ........................................................................................................... 30

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3.1.7 Conclusion .................................................................................................................................. 32

3.2 Lemongrass ....................................................................................................................................... 33

3.2.1 Too Fast Too Soon ...................................................................................................................... 33

3.2.2 "Everybody is our competition" ................................................................................................. 34

3.2.3 Inside out Approach ................................................................................................................... 36

3.2.4 Government Recognition ........................................................................................................... 37

3.3 Mandilicious ................................................................................................................................ 38

3.3.1 Traditional Roots ........................................................................................................................ 38

3.3.2 A Serious Investment ................................................................................................................. 39

3.3.3 Embracing the Mall Culture ....................................................................................................... 39

3.3.4 Unorthodox ................................................................................................................................ 40

3.3.5 Educating Customers ................................................................................................................. 41

3.3.6 Government Validation .............................................................................................................. 42

3.3.7 The Formula of Success .............................................................................................................. 43

4. Data Analysis and Critical Review of Gathered Data .......................................................................... 44

4.1 Inception/Concept/USP .................................................................................................................... 44

4.2 Competition ...................................................................................................................................... 47

4.3 Markets ............................................................................................................................................. 49

5. Conclusion ........................................................................................................................................... 53

5.1 Earning their spot .............................................................................................................................. 53

5.2 The Key Research Question .............................................................................................................. 54

5.3 India - A Rude Awakening or the Ultimate Equalizer? ...................................................................... 55

6. Personal Learning ................................................................................................................................ 61

6.1 Kavin Ujjainwala ................................................................................................................................ 61

6.2 Vinay Premchandran ......................................................................................................................... 63

7. References .............................................................................................................................................. 66

8. Appendix ................................................................................................................................................. 69

8.1 Participant Information Sheet .......................................................................................................... 69

9. Bibliography ............................................................................................................................................ 75

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1. Literature review

1.1 History of Franchising

1.1.1 Where it all began

According to the website of FranChoice, the origin of the word franchise goes back to Anglo-French,

meaning freedom, liberty, and from Middle French, franchir, to free, and earlier from Old French franc,

free (Merriam-Webster’s Dictionary of Law). The concept of franchising dates back to the Middle Ages,

but it is known to have picked up when Isaac M. Singer, located in New England, saw an opportunity to

route the distribution for his success with sewing machine, through the USA. With this push, came the

necessity of licensing and training people who would own the rights from him for distributing his

products.

There exists a debate for over centuries regarding the birth of franchising, which has recently been

challenged by Michael Seid (Strahota, 2007). According to him there is evidence in relation to the first

ever business concept that adopted the use of the franchise model – printing – which was

conceptualized by Benjamin Franklin. Michael H. Seid identifies documents which make a strong case

that Franklin’s business dealing are parallel with those conducted in franchising. Franchising became the

dominant mode when the economic scene after WWII demanded products and services to quickly grow

in the USA.

1.1.2 Models of franchising and their success story

The credit must be given to entrepreneurs such as Ray Kroc, for McDonalds, and Dave Thomas, for

Wendy’s, who have used the business format franchising model successfully and shown the generation

the value of managing growth of huge corporate empires.

There are different types of franchises that have grown according to the needs of various industries. For

companies such as Pepsi, Exxon and Ford Motor Company, product distribution franchises makes more

business acumen as they simply sell the franchisor’s products and are supplier-dealer relationships. In

such businesses what is important is their trademark and logo, more than its operations and systems to

run a business unit.

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According to the IFA education foundation studies (An Introduction to Franchising) – although product

distribution franchising represents the largest percentage of total retail sales, most franchises available

today are business format opportunities. This type of model does not only use a franchisor’s product,

service and trademark but also the complete operating system and procedure to conduct the business

itself, such as marketing plan and operations manuals. Such business models are a huge success within

the service industries, such as restaurants, car rentals, maintenance, construction, retail and lodging.

Research conducted by the IFA in 2005 suggests that the total contributions to the US economy

attributable to franchised business is enormous– there are more than 20 million jobs created, $660.9

billion in payroll, and $2.31 trillion in output (Welsh et. al., 2011). Another author states that in the US, a

new franchised store opens every about eight minutes as compared to Canada, which stands at every

two hours (Preble & Hoffman, 2006). In the United Kingdom, 35% of all sales are through franchised

organizations (Bellett, 2003; Preble & Hoffman, 2006). Internationalization of business services has

gained momentum in recent years and among the three popular methods by which businesses expand

their market and distribution channels, franchising is the ultimate primary means of foreign market

exploitation, the other two being licensing and distributorship (Petersen & Welsh, 2000).

1.1.3 Governance

With the large influx of franchised units globally, there was a need for legislation and consumer

protections that followed. This led to the foundation of IFA – International Franchise Association – in

1960 as a membership organization of franchisors, franchisees and suppliers with the purpose of

providing help and guidance to the entire industry. This is an important step in the development of the

model as this adopts a Code of Ethics framework representing best practices within the franchise

industry. This led to the creation of Franchise Disclosure Document – FDD – by the Federal Trade

Commission within which a franchisor should share its history, the offices, litigation history, estimated

investments, an overview of the business concept, and a copy of the franchise agreement (FranChoice).

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1.2 Retail Food Franchising

1.2.1 Benefits of franchising

It is estimated that U.S. franchising generates in excess of $800 billion worth of business in gross sales

and represents 40% of the retail trade (Welsh, Alon, Falbe, 2006). For the UK, the total annual franchise

sales would be worth 33.3 billion pounds and make up around 19% of all retail sales (Welsh, Alon, Falbe,

2006). A major reason for the adoption of the franchise model within the community is to support the

growth of economy at a rapid pace as it has proved itself as a highly significant strategy for business

growth, job creation and balance the supply-demand ratio.

From the franchisor’s point of view, the ability to franchise has its distinctive pros. For one, they are able

to expand their service business to relatively unsaturated markets as compared to their competition

that might not be franchising. This is primarily due to the success in standardizing one’s operations and

using the franchisee’s money to invest in the business, completely eradicating the risk factor for the

franchisor. The franchisee also enjoys in this equation as they will undertake the responsibility of a

recognized brand with standard operating guidelines, set customer service and publically accepted &

recognized concept. Operational benefits include, but not limited to, are periodic system wide programs

and promotions, new product innovations and launched as an LTO, superior market research and advice.

With the help of the franchisee’s work, the franchisor has the opportunity to acquire a broad base of

knowledge concerning local customs, market conditions, economic networks, political affiliations and

industry experience of the franchise partner (Welsh, Alon, Falbe, 2006).

1.2.2 Drawbacks of franchising

Franchisors however have to deal with political environment, which may be in terms of legal constraints,

changes in legal environment, bureaucratic conditions, or limited infrastructure to nurture growth at

expected levels. In terms of protecting intellectual property, it might not be an issue when expansion

through the franchise model is within the country. However, globally it could lead to troublesome days

where the concept could be replicated in terms of operations. At the same time, legally protecting

international copyrights, trademarks and patents could be a difficult and expensive affair.

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Franchisees may well not break their head on the development of concept and its operations, however

relationship between the franchisor and franchisee could turn sour if the trust between them is broker

for reasons leading the product development, aggressive marketing, poor research & advice, lack of

training and operational support.

1.2.3 Economic push that caters to growth

The model being successful in the developed countries has a lot of potential in the emerging markets as

they include relatively unsaturated markets, urbanized and highly populated cities for the most part, a

growing youth market, free trade zones, relatively friendly business laws, liberalized markets and

transitioning economies, and a huge pent-up demand for the western style goods and services (Welsh,

Alon, Falbe, 2006).

Politically, the risk is low surrounding foreign investment. The franchisor has the opportunity to acquire

a broad base of knowledge concerning local customs and market conditions, economic networks,

political affiliations, and industry experience of the franchise partner, which can greatly enhance the

possibility of success for both the franchisor and franchisee(s).

1.3 Retail Food Franchising in the UAE

1.3.1 Geographic Placement of the UAE

In our discussion, UAE is considered an emerging market as the country has a lot of potential to nurture

the unique culture, to take it globally and has been in transition. For the past twenty years, the country

has achieved milestones, one after another without an endpoint in sight – with incredible infrastructure

to woo international investments within the economy – from reality, to FMCG and everything in

between. The country has strategically placed itself as a transit destination, with its highly advanced

ports of air travel, road and sea travels, where the east meets the west. In terms of infrastructure, the

country is in development of an advanced railway network connecting the GCC countries.

The Gulf Cooperative Council is a union of political and economic strategies, somewhat similar to the

European Union (Furey, 2007). The UAE is a growing, lucrative marketplace that has recently captured

the interest of the world for political as well as economic reasons (Welsh and Raven, 2006). UAE has

thrived itself on the tourism industry, partnering itself with the biggest names from the western

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countries and inviting investment in the hotel industries, reality development, food and retail outlets.

The numbers of international brands showing optimism in this economy has been brilliant and been

growing with a rapid pace year on year.

1.3.2 International brands VS Local brands

The success of international brands fairing very well within the country has been due to the control and

ownership by local high net worth value families such as the Al Ghurair, Al Shaya, Al Madani, Al Futtaim,

and others likewise. These family businesses, under the banner of the family name, have been able to

capture, bring, develop and implement international brands at a fast pace which has helped develop the

economy, in addition to the image of Dubai and the UAE. Al Shaya has brought in the majority of the

brands, within the food industry, such as Starbucks, P.F. Changs, The Cheesecake Factory, Shake Shack,

Ihop, to name a few from their stronghold portfolio. With such a strong foot hold of being the Master

Franchisor/Area Development Franchisor within the economy, the recognized and developed brands

would want to partner with them as these family businesses understand the consumer behavior of the

UAE and have funds to promote growth.

UAE is definitely considered a franchise hot spot, with ripe conditions and the demand is apparent.

Taking it one step further and thinking about this situation, the discussion does move on to cultivating

local home grown brands into a franchise model. Thought question: Is it not becoming more and more

difficult for a home grown, culturally driven brand to utilize the franchise model, to grow and compete

with the established and recognized names in the game? A lot of factors affect this question, in terms of

finance, brand recognition, consumer behavior towards becoming a franchisee of a local brand

compared with an international brand where the risk could be lower. However, one can argue that the

opportunity for smaller entrepreneurs in franchising, in Dubai, is a hundred times what it was five years

ago (Mary Ames, 2012). Other thought questions that will be brought up during interviews with key

personnel:

Where do we see gaps?

What opportunities does the MENA region offer for exporting UAE brands?

What tips do established UAE brands and companies have for budding ones?

How can UAE food brands support each other and take advantage of cross marketing

opportunities?

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How do we approach brands that have mixed nationality? (Where an expat starts a home grown

brand)

How do local brands compete with and differentiate themselves from established brands which

are imported on a large scale?

How do UAE consumers drive the success and demise of UAE brands?

Does the government have a role to play?

How does the UAE Company’s law help or inhibit the growth of UAE brands?

1.3.3 Adaptability of local operators with an international conceptualization

Local, home grown brands need to culturally differentiate themselves in regards to taste and menu

engineering, keeping the global view point in mind in terms of expansion and acceptance from the

international community. Emiratis, even though with sufficient capital and entrepreneurial mindset,

need to have the visualization to venture out on their own with a fresh operation or idea, creating

excellence and optimizing for the use of franchise model.

The paper by Aliouche & Schlentrich (2011) develops the first global index of international franchise

expansion that ranks countries according to their attractiveness to US based franchise firms – UAE is

ranked 38th where USA is ranked first, UK the second and Canada at the third position. Within the GCC

threshold, Saudi Arabia is ranked 16th on the index.

The local government understands the preference of local Emiratis, who want to be self-employed and

to diversify from the oil businesses. For the same reason, the government has introduced many

initiatives to support and fund growth of local food concepts such as Wild Peeta (a submarine sandwich

QSR concept) and Just Falafel (a falafel sandwich QSR concept).

1.3.4 Laws governing food franchising

Some Middle Eastern markets have arcane legal systems (Swartz, 1997), as well as diversity in corporate

laws, tax structures, labor practices, etc. (Chaplin, 1998; Preble & Hoffman, 2006). Business ownership

and development in the UAE is affected by legal restrictions on FDI’s and ownership which makes

partnering with local agents a necessity, be it a sole establishment or an LLC (Bassem Nasri, 2013).

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According to the Dubai Chamber of Commerce, the UAE does not regulate the franchise model as a

different form of business. There only exists a mutual contractual agreement between the franchisor

and the franchisee. The legislative environment is not ready to support franchising, as per Ali (2008).

This jots the question whether or not prosperity of franchising in the Middle East is meant to be limited

to entry of foreign franchises through their area development master franchisors in the region rather

than to creation of local concepts (Bassem Nasri, 2013).Franchising has no dedicated law that

determines the relationship between the franchisor and the franchisee as in the western countries.

1.4 Summary of Literature Review

Franchising has been an acceptable model for over a century in the United States and it has seen

positive growth in other regions across the globe, including the United Arab Emirates. There have been

extensive studies undertaken in the western economy highlighting the importance of the franchising

model within a country’s economy. However, there is lack of studies undertaken primarily within the

UAE market for how valuable franchising can be – not just becoming a master franchisor but also the

opportunity given to the people for becoming a sub franchisee for an international brand or being a

franchisee for a local home grown developed concept. Only one major study has been carried out to

support the discusses in the Middle East, and that has been carried out by Bassem Nasri for his

Doctorate thesis – Emergence of local retail food franchises in the Middle East: The influence of foreign

franchises. As more and more individuals are suiting to the idea of entrepreneurship through a

franchisor-franchisee model, a higher amount of knowledge is demanded in this field of study.

UAE has proved itself of being at the centre of trade and finance, now it is time for the local community

to grow within and expand outside rather than just focusing on bring in developed concept from the

USA or the UK. Retail food franchising in the UAE has been described as importantly developed and

advanced, but only in the sense of successful import of foreign franchises, not the creation of local ones

(Bassem Nasri, 2013). There is a need for creativity, visualization and governing bodies to take note and

start creating a track to conceptualize the idea.

It has also been discovered that franchising in the country is dominated by a small number of wealth,

well-established family businesses. Sub franchising is not a developed concept due to the contractual

agreements between the franchisor and the area development franchisor. Awareness has to be brought

in and adopted by the local residents as an entrepreneurial opportunity – this will affect the

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development of home grown brands who will be then be able to sell their concept rather than spending

millions on marketing the idea of franchise operated stores. Lack of sub franchising in the UAE has

hardly been mentioned in any of the researched articles which do not denote if it was a possible factor

for local entrepreneurs, instead of working for master franchisees of retail franchise chains, to create

concepts comparable to the imported ones with edges of favorite local ambience and flavors.

One has to keep in mind “The Stakeholder Model”, which was proposed by Welsh & Falbe (2006),

illustrating the international retail franchising in emerging markets from the viewpoint of its

stakeholders: the franchisor, the franchisee, host market, home market, and the consumer. Under this

model, Welsh et al (2006) again had only minor mentioning of the Middle East with no case studies

brought along.

The region witnesses a franchising sector growing at an annual growth rate of 27 percent (Furey, 2007)

world’s largest shopping developments (Young, 2001; Glynis Jones, 2003) relatively high brand

penetration, and retail expenditure compared to highly developed world economies. Despite such facts

describing the importance of retail franchising in the UAE, the gap exists where there is no research

been carried out which measures the development of home grown brands to those of international food

retailers which are locally controlled and governed by established and wealthy families. For this reason,

we have decided to go ahead and gather first-hand information from home grown branded business

owners who have already started franchising locally or internationally, by means of interviewing them.

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2. Research Methodology

2.1 Chapter Outline

After reviewing the literature and before we jump into considering collection of data and approaching

key clients to answer our questions, it is vital for the research, to understand the concept of research

methodology and apply it to our specific scenario in order to conclude the right path moving forward in

terms of our approach. Defining the methodology is quite significant as this will highlight the path

towards constructing a knowledgeable insight to achieving answers to the research question and

eventually our research objectives. The tools, such as the questions, interviews and scientific arguments,

are used to deduce a theoretical concept; the methodology can be seen as an operational guideline to

get an understanding of the received data (Leedy, 2010).

The economic and social importance as well as the current status of food retail franchising within the

country was covered in the literature review of this research. The fast growth and development of food

retail in general & food retail franchising particularly in this country during the past two decades was

found to have been based primarily on franchises imported from foreign countries, like USA and Europe.

Vast literature and knowledge does not exist for this country, with regards to our questions, and it has

left many questions unanswered. For this reason, it is simply not acceptable to deduce solely based on

the literature available.

This chapter highlights the key insights of research philosophy – positivist vs interpretivist, research

approach – deductive vs inductive, research strategy – survey vs experiment vs case studies, research

type, choices of data – quantitative vs qualitative, and thereafter the data analysis strategy & techniques

(Dr. Knut Hinkelmann & Dr. Hans Friedrich Witschel, University of Applied Sciences Northwestern

Switzerland). Systematic categorization of research will be undertaken according to the dimensions

shown in the figure 1 – the research onion; to answer the mentioned research question and its

proposed elements, hence justifying the use of the respective methodology. The chapter will also

describe sources chosen to collect data, the strategy to analyze the collected data, and its validity &

relaibility relevant around the research question and justify this choice.

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2.2 Research Philosophy

The idea of embarking on this research is to add value by developing knowledge in the field of food

franchising within the country. This is where the term research philosophy plays part. Studying the

existing literature, which is not extensive, we can now assume the relationship between the knowledge

and the process by which it is developed (Saunders, 2012). We personally agree with Saunders when he

states that one philosophy is not better than another. Rather, they are better at doing different things –

depending on the research questions we seek to answer.

Tashakkori and Teddlie (1998) suggest that it is more appropriate for the researcher in a particular study

to think of the philosophy adopted as a continuum rather than opposite positions – this literally

Figure 1 - The research onion (Mark Saunders, Philip Lewis and Adrian Thornhill 2008

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translates to at some points the knower and the known must be interactive, while at others, one may

more easily stand apart from what one is studying (Tashakkori and Teddlie 1998:26, Saunders, 2012).

The philosophical context chosen to be appropriate as foundation of this study is realism, breaking it

down and focusing on direct realism rather than critical. As management researchers, we believe that

our scientific approach will underpin the development of knowledge within this field and stand true to

the philosophy of realism which states that there is a reality independent of the mind (Saunders, 2012).

As it can be seen from the interview transcript chapter, our core focus will be upon three traits - namely

Brand DNA, core product and social acceptance – these can be further understood only by conversing

with our interviewees who will provide us with a realist scenario, further strengthening our beliefs and

developing our knowledge, of the market. This approach will be of much better value as compared to

the existing shallow literature.

We also believe that the track we will be following with this research also hints at the mixture of both –

the positivist and interpretivist philosophy, as we prefer working with an observable social reality with

our interview list (Figure 2). This will provide us with an indication of the underpinning viewpoint and

thinking of the research methods and the questions used. It indicates with which philosophical mind set

the findings are interpreted (Crotty, 1998). We have decided to use data collection to search for

regularities and causalities as a base to create a general picture, which is common for a research in a

philosophical context of positivism (Gill and Johnson, 2010).

Figure 2 - Positivist VS Interpretivist

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We are more interested to create a value system by defining ways which can bring about positive

consequences, through this data collection.

2.3 Research Approach

Inductive approach is chosen as the preferred method as this research moves from data to theory. This

is most logical method going forward, due to the lack of literature for the UAE which could’ve possibly

assisted us in deducing scenarios before taking up interviews. Induction approach will allow for a close

understanding of the research context within food retail franchising, the collection of qualitative data

rather than quantitative, for debate, and lead to a fairer – more structured conclusion.

2.4 Research Strategy

The research strategy is on the three onion layers, as shown in the figure above. This forms the research

design, in addition to the research choice and time horizon. Choosing a research strategy was not the

difficult part for us. As we were heading down the path of inductive approach, and we were quite

confident of meeting with our primary respondents, the best suited approach was that of surveys

(questionnaires) and that of informal & in-depth interviews. The copies of these can be found in the

appendix. The questionnaires are designed to be closed ended which would help us read the minds of

our primary respondents before we lead to open ended, discussion based interview questions where we

would have a vast opportunity to dig deep within the current and future franchising scenario - from the

business leaders themselves and also who are active within the industry. The focus would be on

collecting qualitative information from our respondents, in terms of the three traits as mentioned

before.

From an ethical perspective, we will be approaching our respondents beforehand and handing out the

questionnaire & interview questions for them to be familiar with what topics we are primarily

concerned with, eventually giving them the opportunity to make us aware if any part of this interview

process needs to be considered as confidential. This would not only help us achieve informed consent,

but also ease the mind of the research participant, minimizing the potential for distress, which is an

important basic principle of research ethics (Laerd Dissertation). The primary respondents would be

aware of how the data will be collected and stored – primarily through recording the interviews with the

interviewee’s consent and storing them safely on the cloud servers.

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To summarize, the methodological choice is a mono qualitative method.

2.5 Time Horizons

This study describes the phenomenon of retail franchising within the country, during the current period

compared to that of the past and its prospective future. For this reason the cross sectional design is

used. The aim of this study is to understand from the active business leaders within the franchising

industry, how they are changing the shape of brand development and recognition within the Dubai

market – which would help them to build and gain success. As Cohen et al said; a cross sectional study is

one that produces a ‘snapshot’ at a particular point in time.

2.6 Collection of Data

In order to accomplish our objectives of this research, it is important to cohesively integrate the use of

both primary and secondary sources for data collection which can then be our information towards

breaking down and analysis, to widen our knowledge on retail food franchising. Primary research

involves collecting data about a given subject directly from the real world (Purdue Owl). Conducting

primary research appropriately will be key in our thesis as is will help us dig into our research question

with our respondents and eventually greatly supplement the research in secondary sources.

Conducting primary research has to be carried out with care and with ethical responsibility on our part.

The questionnaires will be handed out to the respondents to fill in before the start of the face to face

interview, which will be closed-ended and relate directly to the open ended discussion based interview

questions that would follow. Our main concern will be reliability of the data gathered and if the

respondent would be comfortable to share the findings with us. To make them feel more open about

this research, we decided to hand out the approved ethics forms and questions before we met the

respondent so they would realize the questions are not quantitative where confidential answers will be

demanded, rather it’ll be an intellectual Q&A session which they would benefit from as well. Also

knowing that one of the team members is from the F&B background, it would help to create a debate

over issues and possibly dig deeper within the current market situation.

Primary data will be regarded to display high level of authenticity, objectivity, and reliability, for the

reason that it had not been published nor altered (Alvsson, and Skoldberg, 2000). Balnaves (2001) claims

that primary data sources are seen as authentic sources that represent facts.

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Secondary data collection sources will primarily be the database of HCT library based out of the UAE,

University of Windsor library based out of Canada, and other scholastic journal articles searched within

Google Scholar. Via these channels, plenty of literatures were read and a handful of those were

considered important within our literature review. As we already concluded that there was not enough

studies carried out within this research topic, concentrated within this market and hence primary

research will play a key role in decoding the research questions and arising with deeper fundamentals to

why retail food franchising has grown enormously within the past few years in the country, and what

excites the consumers with this model. According to Schwandt (1997), secondary data gives good insight

into the topic of the research and broadens the contextual knowledge for this study. Even though, the

secondary data is less focused around the objective, it is considered to be equally significant for the

research (Burns, 1997).

2.7 Data Analysis & Ethical consideration

Once the primary data is sourced and stored by the means of recording, it is time to make sense of the

data and learn from it. The key whilst analyzing would be to, to pull out the information that is the most

pertinent to our writing, information that we can highlight and discuss, and information that will support

our findings from secondary data (Purdue Owl). Qualitative data analysis procedures will be undertaken,

allowing us to develop theory from our data.

The only way to deconstruct the qualitative data collected will be to paraphrase and summaries the

hearings from our respondents, categorize them in sub sections and restructure them to a narrative

form, to support meaningful analysis; as transcribing the interviews will be a very time consuming

method and not cost effective. We will be comparing the interview answers within six fundamental

primary questions which are highlighted within the appendix, in relation to pre-defined three traits.

The greater richness of qualitative data and the way that qualitative data is often presented creates

potential ethical challenges. On the one hand, there is the desire, especially amongst researchers to

present qualitative data in all its richness. Failure to do so can not only limit the descriptive and

explanatory power that is on the advantages of using qualitative research designs, but also leads to

criticisms of poor research quality because other researchers cannot easily validate the claims that are

being made. On the other, there is the danger that such richness exposes research participants to

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greater risks since it is more likely that they can be identified through such qualitative data analysis

techniques (Laerd Dissertation).

Research ethics, for us is not an afterthought, and is dealt with by making it part of our dissertation

process – referencing the rightful owner for secondary data collection and providing approved ethics

application, from the University, to our respondents and sharing the approved questions before setting

an appointment for an interview to collect our primary data.

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3. Interview

During the course of our research in an effort to understand and gauge the ever growing franchise scene

in Dubai we decided early on that our primary methodology of capturing key data to best understand

this dynamic sector would be to carry out personal one on one interviews.

Once this was decided we went through a process of elimination to arrive at 3 key franchise brands to

interview and for this purpose we made sure that these 3 brands will encompass all or a majority of the

below traits to be even considered:

1) Brand DNA – This particular trait was very important for us mainly because to understand the

current growth of any brand we needed to go into its roots, How did the founders arrive on this

concept? Did they see a gap in the market to breathe life into their concept? Has the initial

brand image carried forward or evolved over the period of time to where it is currently?

2) Core Product – This particular trait was the next biggest consideration for us mainly because we

wanted to see how the brand has organically grown from its initial product offering to its

current product offering. For e.g. We all know McDonalds serves burgers but over the years

their menu has changed in order to remain competitive and ensure there is something for

everyone, hence their healthy salad options. What this also proves is that no brand can exist

with only their core products. We wanted to see how innovative the brand was in coming up

with new products to complement their existing line or improve their overall product offering.

3) Social Acceptance – One of the key things all home grown brands require is the support and

acceptance of the social sphere within which they operate in. This determines how successful

they will be when they take their brand out of their country of inception. If you are successful in

creating a solid social ecosystem in your country of origin the chance of you replicating it outside

your country of origin is high, multiple solid social ecosystems is what creates a strong brand

following worldwide eventually translating into brand equity.

Surprisingly we found a lot of home grown brands in Dubai lacked either all or majority of the above

traits. But then we found that it would be considered reckless to do a study on Franchising in Dubai and

ignore Brands like Just Falafel, Lemongrass Thai Restaurant and Mandilicious. All of these 3 brands have

the above 3 traits which we were looking for but what was more surprising was that these 3 brands are

where they are today because of very distinctive Singular focuses within their concepts.

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The following are the 3 interviews which was done face to face, captured electronically and paraphrased

with Mr. Fadi Malas the ex CEO of Just Falafel and current chairman of the board, Mr. Stephane Jacques

an ex commercial pilot who also happens to be the founder and CEO of Living Brands the owners of the

Thai food concept Lemongrass and Mr. Fayez who is the founder and CEO of Mandilicious which is the

newest of the 3 and specializes in serving Mandi a rich Arabic form of cuisine which is mainly comprised

of meat and rice in a quick service format.

All the interviewees were mailed the Interview questions prior to the meeting and these questions are

as follows. Please note that the interview was conducted as a discussion based model wherein the

interviewee having reviewed the questions prior to the meeting touched upon our relevant questions in

an order they chose would best suit our purpose. Due to the bust schedules of these subjects we did not

expect to get an answer for each of the questions but we were able to address each of the sections all

answering our key research questions.

What is the main USP that the local brand in question offer compared to its International competition

and what are the challenges it faced from inception till date? : The key is to identify if the particular

local brand has in fact something unique to offer its customers and did they start the brand with a

goal to franchise or was it something they are using to scale quickly? During the Interview process we

aim to give the reader an insight of the brand and how it came into being and what the owners saw as

a clear gap to breathe life into the brand.

a) Give us a brief history of your concept, how it was conceived up to what it stands for today?

b) When you arrived at this concept did you do so after identifying a gap in this market?

c) When you started the first restaurant was it with the intention of one day converting it into a franchise

model? Or did you plan to grow the business organically, one outlet at a time?

d) What according to you were the biggest issues that you faced when you decided to go with the

franchise model for your business?

e) When creating a new concept with a future plan of franchising it one day what are the basic outliers

one should look into to ensure this model is adopted without disturbing the existing scheme of things

within the organization?

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f) How does an unknown brand take its place amongst the giants like KFC and Pizza Hut and hold its

own? What is that you do differently to attract customers as opposed to the millions of dollars spent by

International brands for customer acquisition? If you can put a figure on what is your average spent on

acquiring a single customer how much would it be, do you see this figure coming down over the next

couple of years?

Who in the eyes of the brand is its biggest competition? The key here is to understand how do they

plan to differentiate themselves in the UAE Market where International brands are represented by big

local family conglomerates for whom marketing and promotional budgets are of no concern and how

the local brand perceives competition, do they consider the competition as a direct threat or do they

feel they have the upper hand? Size vs Agility?

g) A brand like The Cheesecake Factory who have been successfully implementing the franchise model all

over the world have made the move to enter Dubai a couple of years ago and they made the transition

rather smoothly, for a brand like this it's easy to say they came they saw and they conquered, but how

would a brand like yours aim to replicate this success which has taken The Cheesecake factory decades to

achieve within a short period of time and with rather smaller marketing spent?

h) One of the key questions within our research is to find out if the influx of International brands through

master franchisors such as Al Shaya, Bin Hendi making it more and more difficult to create a level playing

field for aspiring entrepreneurs who may have a viable concept but the risk of implementing it and

having to go up against the big players makes it not worthwhile, how did you approach this dilemma

prior to you journey?

i) Amongst the local brands who do you consider to be your biggest competition and Why?

If the brand had opened its doors for the first time in a market other than the UAE will it have enjoyed

similar success? The key here is to understand if the brand’s success is linked to the fact that UAE is a

very diverse and infant market compared to and International market such as the US which is highly

saturated and less diverse market that the UAE.

j) Since you have both owned and franchised outlets do you still sell your product or do you sell your

concept to a potential customer? Have you been approached by third parties to lend your expertise and

business model to start a complementing outlet with a different cuisine to go with your existing concept?

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k)Do you think that your retail concept would have enjoyed the same kind of success that it has in Dubai

if you were in another market? Do you think this has anything to do with the multi-cultural expat

population wherein you are guaranteed to have takers for any form of cuisine?

What are the key lessons that the local brand has derived from the more established international

brands? The key here is to understand how much of a positive influence there has been on local brands

from the influx of these international brands? Are most of the success factors easy to imitate? And

how capital intensive is this exercise?

l) Dubai is the land of dreams and as a result we have seen many a dreams come crashing down

especially in the quick service/casual dining scene during the financial crisis, what according to you is the

biggest pitfalls that an entrepreneur can fall into whilst trying to emulate your success by copying your

business model and maybe just going with a totally different cuisine?

m) How have you adopted the social media scene to positively affect your company’s growth within the

region? KFC has successfully adapted to the social media scene in the Middle East, have you adopted any

practices from a successful campaign like KFC's?

n) Wendy’s the popular burger joint had its operations in the early 90’s in the UAE but closed down and

has recently re-entered into the market with a new look and feel, what according to you is the biggest

reasons why International brands fail even in markets like Dubai where customers have the disposable

income? What have you learned from failures of big brands not only in the UAE but outside of this

market?

How important is brand value compared to sentimental value? The key here is to understand the

consumer; does being a local home-grown brand with rags to riches story give the brand an upper

hand when it looks at campaigning for customers? Does it buy loyalty at some level or is it value for

money vs brand value? How does it aim to reduce its customer acquisition costs compared to its

international counterpart?

o) With the recent announcement of the Mall of Arabia, the world’s largest shopping mall and the 1

million sq.ft. Expansion of the current world’s largest mall the Dubai Mall we can clearly see that Dubai is

going to attract many International brands which means more competition for you, how do you plan to

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be prepared to meet challenges such as theses and others that may come your way moving forward?

Does Brand recall and Customer loyalty play a key role here?

p) Do you feel that being a home-grown brand has its advantages? Do you think that customers are

drawn to your story more than your product?

q) Brands like KFC and McDonalds don’t give the feeling of being accessible mainly due to their size, do

you think that however big a brand becomes consumers should always feel that there is someone to hear

them out? Being a home-grown brand and considerably smaller both in size and scope in comparison to

your international competition do you feel you are able to adapt to consumer trends more easily? Give us

an example.

Does the Government have a key role to play to foster the organic growth of home-grown brands to

ensure budding entrepreneurs, National or Expats have a fighting chance? The key here is to

understand from the home-grown brands on how they feel the government should intervene to ensure

a level playing field, either in the form of reforms or taxation towards imported brands like in

countries like India and China.

r) Do you feel that the Government should give more incentives to entrepreneurs who create and nurture

home-grown brands such as yourselves? Should they have a more strict policy when it comes to

International brands entering this market making it difficult for home grown brands to grow as the

major locations and the big bucks are with these brands even before they enter the market?

s) What are your thoughts on the legal structure within Dubai for franchisors such as yours? Do you feel

there is a lack of set guidelines which would help local companies such as your operate more peacefully

within the region? Have you faced any issues legally with franchisees and if so how were they dealt with?

t) How would you react to the statement that due to the influx of International brands in this market the

growth of local brands by expats or Emiratis are being affected? In your opinion what can be done to

ensure that local brands are nurtured so that money remains within the Dubai economy as opposed to

International brands taking a big slice of the pie now?

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3.1 Just Falafel

3.1.1 The Humble Falafel

We were fortunate enough to have a one on one personal Interview with the first CEO and current

chairman of the board of Just Falafel Mr. Fadi Malas. He played a pivotal role in the success this home-

grown food brand has enjoyed from its inception with one store in 2007 in Abu Dhabi to its current tally

of 700+ stores signed in 18 countries with 52 stores currently in the process of opening.

Lebanese national Fadi Malas moved to Dubai in 2005 originally coming from a banking background in

London. Malas was approached by Mohamad Bitar the managing director of newly opened up fast food

concept called Just Falafel mainly serving the Arabic street food Falafel with a twist. They had opened

their first store in Abu Dhabi in 2007 when the UAE was in full swing with the property boom and retail

explosion. But it was only in 2011 that Malas joined the helm of Just Falafel as the CEO with the goal of

scaling the business by way of franchising.

“Initially he (Mohamad Bitar) wanted to grow organically one store at a time, mainly because the market

was just recovering from the financial turmoil, but I put together a 5 year plan to have 20-25 stores

under our belt and shockingly to all of us we sold 25 stores in a couple of weeks and since then the

growth was astronomical”, says Malas with a sense of pride in his eyes.

Mohamad Bitar founded the brand with 2 of his college mates with the aim of uplifting an Arabic staple

to the world stage, he was sure that he could do it better than anyone else, how?” Innovation! Says

Malas. “Just Falafel is where it is today not because we were good sales men but simply because we

emphasised from the beginning on Innovation. We wanted our food, our approach and the overall brand

to be perceived as a young, fresh and dynamic brand and as a result we have used social media

platforms such as Facebook and Twitter to elevate the brand to a level where today we have over 2

million fans and have been approached by Facebook to do a case study to show other brands how to

harness the undeniable power of social media to leverage your brand perception amongst your

customers and peers.”

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3.1.2 Taking on the Big Boys

Fadi Malas is not in competition with other home-grown brands and he is aware that industry peers

consider Just Falafel as growing too fast. When asked about his biggest competitors in this space the

answer was a bit surprising given the fact they were a new home-grown concept, “we consider brands

like Subway, KFC etc. as our biggest competitors, we are not competing with them in their food level but

with their business model. Subway currently has one of the world’s largest franchise networks which is

42,000 stores and counting, when compared to them we have a long way to go!” Malas sees global

brands as his primary competition mainly because his vision for the Just Falafel brand is anything but

local. He wants to take this brand to every major city in the world and on the onset it looks like they are

en route to just achieving that.

Malas sees competition from KFC and Subway as a blessing in disguise, he feels that Just Falafel is

complementing the competition by offering a completely new food offering to consumers “We are lucky

to be amongst brands that have more than 50 years of history and brand equity, these are the brands

that drive footfall into major locations and we are happy enough to benefit from this form of attraction

especially for a brand that has been in the forefront only for the last 2 to 3 years”

One of the biggest advantages global brands have over newbies is the low cost associated with acquiring

new customers. A brand like KFC which has a rich history spanning over 60 years their biggest asset is in

the intangible, their brand equity. One can say that it’s worth as much as the business and it will only

keep growing.

Fadi Malas was in the driver’s seat while trying to navigate Just Falafel through the retail jungle to

ensure his brand stood out from the crowd but it was not by spending millions on advertisements that

he achieved this, “If we were to try and match brands like Subway and KFC dollar to dollar it would be a

losing battle and we would be climbing up the wrong tree. We were never in competition with KFC or

McDonalds as we were not selling burgers or fried chicken, we were just a new brand in a completely

new food category and we wanted to be the best in our category, currently we are the No.1 brand in the

world offering Arabic street food with a modern twist. Our success is a proof of that.” Malas also adds

that Just Falafel utilised their first mover advantage strategically by ensuring proper communication

highways were established in the form of social media and PR from the very beginning.

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3.1.3 Early Adopters

Currently Just Falafel has over 2 million fans on Facebook with 750 to 1000 fans being added every day;

this is no mean feat for a brand that just opened its first international store in Jordan only in 2012. “We

are a young and energetic brand and you can see that in everything we do from the way our offices are

designed to the way our stores are designed. In today's fast paced lifestyle people want everything on

the go, be it food or information and it would be reckless for a new brand to assume that they will be

able to reach their message to the masses by ignoring the social media space."

From the onset Just Falafel had planned their marketing strategy to revolve around the online realm,

with catchy designs for their websites and their constant policing of their Facebook pages they have

achieved what even established brands find difficult to understand, they have tapped into the psyche of

the common man by simply establishing a communication network and ensuring that the dialogue is

never one sided.

When asked about the negative impacts of being so active on Facebook and Twitter where everybody

has an opinion which could make or break brands Malas said " we see these sites as free monitoring

tools, we don't use Facebook or twitter only to announce offers or new locations, if a customer is

unhappy with his experience of the brand in some outlet I would prefer hearing about it then and there,

it gives the brand a chance to acknowledge its shortfall and ensure that its resolved publicly. Customers

admire brands with a sense of ownership, everyone is aware that nobody is perfect and mistakes tend to

happen because the experience of a customer is not in the hands of a computer or a machine it's in the

hands of our people and sometimes people make mistakes. This is an opportunity to both teach our staff

what they did wrong and at the same time show the customer that we take ownership for our mistakes.

So if you ask me social media is a blessing for new brands like ours because it helps us monitor multiple

stores in one page and moreover it’s free" laughs Malas.

3.1.4 "Locations need to earned"

"Just Falafel has been lucky enough to be able to grab some of the best locations not only in the UAE

retail spaces but internationally also. Last year we signed up to open stores in Canada and the United

States. In Canada we opened our first store on Toronto's Bay Street which is a thriving commercial and

residential centre that receives almost 100,000 commuters daily" say Malas.

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But Just Falafel did not start with the thinking that location is going to make or break the brand. When

asked about the big players in the market always having the unfair advantage of getting the best

locations in prominent malls Malas had this to say" No I don't feel it's unfair at all, in fact I'm happy that

malls fill their food court with crowd pullers like KFC and Subways. New, home-grown brands need to

earn locations such as Dubai Mall and Mall of the Emirates, it adds to the credibility of brands like ours

once we are in the same food court with these giant brands. If these spaces were not governed and

carefully monitored by the mall managements new brands like ours will suffer when we eventually arrive

there, lest face it it's not cheap to have a store in Dubai Mall and we need to ensure that all our stores

need to be making money from their first minute of business and this is only possible when you are in the

same food court as a KFC or McDonalds."

If we look at Just Falafel we see a company that has a strong brand image that has been carefully put

together, every aspect of their day to day operations strongly revolves around the identity of the brand.

So it would be safe to assume that they have a strong marketing strategy all put together for franchisees

to benefit from the very first day they open their own store right? Wrong! "

"We rely heavily on Social Media for our marketing push mainly because it's easy to see your return on

investment almost immediately, the communication is never one sided and feedback be it good or bad is

almost immediate. We use the same approach for our franchised stores also, we don't have set budgets

every quarter for above the line or below the line forms of marketing, we first analyse the location where

the store is and understand the demographics that this store will cater to and then focus on our

marketing activities which will revolve completely around the location of the store. Sometimes certain

store don't require any marketing at all if it's in a prominent mall location we can leverage from the

mall's marketing push coupled with the pull of customers by other prominent brands like KFC and

McDonalds who are our neighbors"

Malas emphasizes that their marketing activities to support their franchisees is always location centric,

this has worked well so far for the brand thanks to their strong social media presence. Just Falafel as a

brand will continue to ensure that they do enough to be associated with the community in the form of

sponsoring events or supporting good causes. The benefits of these associations will eventually trickle

down to its growing portfolio of stores.

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"Innovation was the cornerstone on which this brand was built and we aim to show that in everything we

do. We ensure that all our franchised outlets outside of the UAE have special menu items that the local

customer in that city can associate himself or herself to. For e.g. when we opened our first store in

Canada the menu featured a local delicacy called poutine and this was followed by offering gluten free

options along with a Californian wrap in our first store in the US in California"

3.1.5 New Frontiers

As mentioned earlier in the interview it's clear that Malas wants to be in the same league as the big boys

like KFC, Subway and McDonalds, which is a tough ask for a brand that has been on the up only for the

last couple of years and in operation for the last 7. Currently Just falafel is present in over 14 countries

after it opened its first international store in 2012 in Jordan and they have 700 stores in the pipeline in

over 18 countries. One might say they will probably catch up to the Subways and KFC's of the world if

they grow at this rate. But Malas is not one to sit and see it grow in America and Europe last year Just

Falafel announced its entrance into the Indian Sub-continent a market where even brands like KFC

struggle.

“I want to be in every country in the world because we are in an industry where everybody consumes

food on the go more so now than ever before. If we can communicate clearly to people what we are

doing as a company I'm sure we will be able to find likeminded people in every country who are willing to

take up the challenge, moreover we are not offering another sandwich or fried chicken it is a food

category which is new and there is a huge element of innovation behind it. Most of the other food

categories have been commoditised already and over-consumed and over-available" Malas asserts.

When Just falafel started the founder Mohamad Bitar had a vision to grow one store at a time but after

the arrival of Fadi Malas who took over as the CEO of the company Just falafel has witnessed

unprecedented growth. By adopting the franchise model Malas was able to double the growth of the

brand. “If you ask me did we have a 5 year plan, yes we did, but did we look at it every day? No we did

not!

3.1.6 Government Governance

In the last part of our interview we touched upon the levels of involvement that a local brand like Just

Falafel would like to see from the Government. Dubai as a franchise market is far less advanced when

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compared to the US. The main contract is always between the Franchiser and the Franchisee and each

franchisee operates his/her store under an individual trade license registered under the Dubai

government.

The franchise model works well for Just Falafel because a majority of their stores apart from a few key

proprietary stores are owned and managed as individual businesses by owners who want to see their

investments make a profit. "There is always an individual who comes along and sets a high benchmark

for his store and this is constantly increasing and it allows us to showcase these individuals to the other

owners, this is how we currently set our KPI's as every market is different and every individual is driven in

their own way"

When asked how the Dubai government can help local brands match up with the International brands

Malas said “The Dubai Government has setup the perfect platform for any entrepreneur, they did not

setup one free zone, they setup 20. They promote entrepreneurial spirit amongst the expats and the

locals equally, this is a tax free haven and you have over 200 nationalities living and working here in

harmony. If you cannot succeed here then every other market will be 10 times harder."

*Malas feels that the strong government governance of the franchise markets in mature markets such

as the US is associated with the fact that firstly it's a country with taxes and the franchise market

contributes a significant amount to its GDP (approximately 3.1% in 2014 as per the IHS Economics report

for the International Franchise Association which accounts for over $ 494 billion) and when the UAE

market hits these figures then it makes sense in monitoring this sector and if there is government

governance at this early stage it will only hamper growth.

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3.1.7 Conclusion

Mohamad Bitar had a simple dream to bring a 1000 year old recipe to the 21st century, he met Fadi

Malas whose dream is to take this 21st century brand to every country in the world together they are a

match made in heaven with 700+ stores in 18 countries one would say that they are on the right path.

So the question is what is the secret to their success?

“Just Falafel's success has been the topic of many discussions and I always tell everybody the same thing,

we chose a food category where nobody was invested in, we communicated clearly and efficiently to our

potential customers and kept at it and finally we started when the global credit crunch hit which allowed

us to enter with probably half the cost it would have taken otherwise and this built a good foundation for

our growth and obviously everyone had to eat." Malas closes the interview with these words.

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3.2 Lemongrass

Lemongrass was founded in 2002 by ex-commercial pilot Stephane Jacques. Hailing from a family of

entrepreneurs from Luxembourg he came to Dubai, UAE as a commercial pilot for Emirates airlines and

after a successful tenure of 13 years with them he decided to enter into the F&B space with his Thai

casual dining concept Lemongrass.

"I had no experience whatsoever in the F&B sector when I started Lemongrass in 2002. I initially dabbled

in the retail sector but soon found it too complicated and started Lemongrass. I opened the first

restaurant with the aim of franchising it later on but as you can see we have just franchised our first

store 3 years ago, this is mainly due to the fact that I learned that it is not easy to franchise Thai concepts

due to which you don't see many Thai franchises available in the market."

Stephane was just like many of the expats in the UAE who came here on a contract and decided to stick

around mainly due to the multicultural environment and the open market appeal for SME's. One of the

key things to understand about Stephane and his Thai concept is that they are worlds apart when you

compare it with "Just Falafel" our last interview. Just Falafel is the true rags to riches story with a fairy

tale ending. Mohamad Bitar and Fadi Malas have taken a simple concept with one store in Abu Dhabi in

2007 to 700+ stores in 18 countries in less than 7 years whereas the story of Lemongrass is a bit

different. Stephane's concept was more complicated in terms of the core product compared to Just

Falafel. The style of management was totally different. Malas with Just Falafel concentrated more on

developing the Franchise model whereas Stephane's priority was to create the menu and worked his

way outwards. Which of these styles works best? The question we need to answer is did either of the

food concepts fail?

3.2.1 Too Fast Too Soon

If Just Falafel's mantra was Innovation then Lemongrass's was Consistency. Both these qualities are

required for a brand to be considered good enough to be franchised and replicated in other markets. In

our interview with Stephane our understanding of this market was questioned because here we have a

successful Thai concept which has been in the market for over 12 years and even survived the credit

crunch but with single digit stores under their belt whereas a young brand like Just Falafel has seen

exponential growth in a quick period of time.

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“I was a bad student of marketing and I never understood the value that social media added to my

business. In fact you can say that we maybe in the last 3 years have started exploring this space because

it's getting more difficult to be without a Facebook page, just like 20 years ago when businesses did not

see the need for a website and today its part of your corporate mix. We were very slow to utilise the

social media space and maybe that was my mistake."

Stephane was also intrigued by the speed in which a new brand like Just Falafel has grown so fast within

such a short amount of time but he feels that their main revenues are from store signings rather than

performing stores. “We wanted to expand earlier on but the cost was just too much mainly due to the

fact that our food cannot be served in a quick service manner and the dishes need to be made then and

there. Our product was not just the food but the authentic ambience which just adds that extra touch on

top of the already good food. As I mentioned earlier we aim for consistency and top notch service and I

felt that this would be hard to achieve in a food court setting."

Almost 80% of the signing fee for a new store has to go back into opening the store as is with any

franchise concepts, Stephane feels that brands like Just Falafel might look good in the short run but the

requirement of being constantly innovative is far more difficult than aiming to be constantly consistent.

Stephane is happy to grow Lemongrass at the slow pace because the day he decides to expand at the

rate Just Falafel has done he won't have to leave anything to chance. “I have learned everything I know

through trial and error and I'm glad I did. My focus has been to improve the consistency in all my stores.

Customer expectations have to be met because the Green Curry in my Lamcy store should taste the same

as in any of my other stores, this is easy in principle, but much difficult in practice as we don't precook

anything because we don't have a central kitchen and everything is made fresh on the day"

3.2.2 "Everybody is our competition"

Lemongrass has been in the market for over 12 years now and identifying your competition would be an

easy task but Stephane explains why he has no clue as to who they are. “If you ask me to pick a few

names as our competition that would be impossible. I would say that any operator who puts in the same

passion and attention to detail as we do on a daily basis can become a threat, be it Thai cuisine or any

other cuisine, in essence every such operator is our competition" Stephane goes on to say that the

biggest advantage brands like his have is the fact that there is always enough people to want Thai

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cuisine any given night thanks mainly to the majority of Asian population in the UAE and any Asian

cuisine will succeed if its managed properly.

The next question at this stage of the interview was to understand how Lemongrass had managed to

stay in the game for so long without any major marketing spends or no discount offerings for the last 12

years? “I made a conscious decision from the very beginning not to tie up with companies like Groupon

or Entertainer to give customers discounted offers or 2 for 1 offers mainly because as an owner I will be

discounting my brand to get more customers, I don't want customers who will only come during such

promotions, our prices are very nominal and these are the prices that people have come to expect to

receive good food in a good ambience in Dubai."

Stephane was not hesitant to comment on the core research question addressing the unfair advantage

and privileges a global brand enjoys whilst entering into the Dubai F&B sector

"Thai home grown concepts are very limited in Dubai mainly due to the complicated nature of the

cuisine, Restaurants like Blue Elephant which is another Thai concept from the US are only located in five

star hotels and they are not our competition mainly because they serve to a different price bracket. Yes, I

do feel that big brands are always considered over home grown concepts like ours as malls use these

brands to increase footfall and they are also given totally different rental agreements and other perks.

Which is why we more often avoid malls and it's only now that we have opened at Yas mall in Abu Dhabi

and Al Ghurair mall in Dubai. Thanks to the name Lemongrass has created in the past decade we were

able to tie up with a prominent Local family who are now helping us open more doors. I'm still of the

belief that Lemongrass does not need to be in a mall to operate successfully and our first location next to

Lamcy plaza proves this point" explains Stephane.

Stephane prides himself for the experience that Lemongrass offers to its customers. Lemongrass has

become an household name in the UAE as a premium spot for enjoying Thai cuisine in an elegant casual

dining setup. Lemongrass imports all its base sauces from a single supplier in Thailand and these are

especially made for them. “All are sauces arrive from Thailand and there are standardised procedures for

each recipe that need to be followed step by step. We made this process because each time an employee

leaves us we wanted to ensure that they don't end up affecting the consistency of a dish. Now we have

an ERP system which is accessed by our chef's to ensure every dish follows the steps and thanks to our

sauces we are able to achieve a very high standard when it comes to the consistency in our dishes which

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ever restaurant you are at with the added bonus of being to train new employees to better understand

the methods of preparing a particular dish."

3.2.3 Inside out Approach

It would be fair to say that Stephane had taken his time to ensure that Lemongrass was a worthy

investment for future potential Franchisees, but did Lemongrass miss the opportunity in establishing

themselves much earlier to have been able to use their first mover advantage? Stephane thinks

otherwise “When I started Lemongrass I had zero experience in the F&B sector and my skills as a

marketer was also limited so I ensured that if a customer was coming into Lemongrass then I'm going to

make sure that they get the most genuine Thai food in a good contemporary Thai inspired setting. So

very early on we spent a lot of our time and efforts in perfecting the menu, the decor, hiring of Thai staff

in the Kitchen and customer facing roles. We needed to first perfect the core product offering before we

looked at expanding. "

Stephane adds that if a brand's core product offering is well defined and perfected then the brand does

not need to worry about customer acquisition costs because you automatically end up retaining

customers which is far more difficult to achieve, especially for a brand like Lemongrass which has been

in the market for more than a decade and the Lemongrass mantra has been consistency.

The word of mouth form of marketing is what has ensured Lemongrass's success in this region, it's not

difficult to understand this, before the advent of social media platforms such as Facebook and Twitter if

we liked something we would talk about it our friends and family and if you have ever experienced

Lemongrass as a customer it would not be difficult to comprehend this and it also answers why

Stephane had overlooked today's conventional forms of marketing and let his food do the talking.

Nevertheless Stephane understands that Franchisees look to them for marketing support as its one of

their roles even though each outlet has to take care of their own marketing the push has to come from

top. " We have decided to create a fund which will be later distributed amongst franchisees for

marketing and this fund will be derived from annual franchise fees so for us to have a substantial amount

we need to increase our franchise sales. The more stores we open the more comfortable I will be to set

aside this sum."

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3.2.4 Government Recognition

The Dubai franchise market is still in its infancy when compared to mature markets like the US, but the

world's focus is on Dubai because of this very reason, the potential of this market coupled with the open

door policy and other support for SME's from the government. But with the good comes the bad, during

the financial crisis the local newspapers were filled with stories of businesses going bust and owners

fleeing the country to avoid criminal prosecution due to bad cheques and heavy debts. This proves one

thing that as much as Dubai is seen as a paradise for start-ups due to hassle free setup procedures there

is also another side to it which can be unforgiving and things like a bad cheque could land you behind

bars. "Government monitoring of SME's or other forms of business is completely nonexistent mainly

because Dubai is a tax free country they don't see the need to monitor businesses so it would be naive to

think that the government would impose restrictions on foreign brands coming to their soil to do

business, after all its an income for the government also"

Stephane also adds that a brand like Lemongrass needs international brands to thrive in this market.

“Dubai has over 200 nationalities and I feel there is enough business for everyone to take a share of

Nobody is going to eat from KFC or Pizza Hut every day, the days they want something different and

classy they will come to Lemongrass"

Stephane closes the interview by adding that the major role from the government side needs to be

played by the Department of Economics. "The DED needs to recognize SME's like ours who have been

contributing to this economy and upholding the standards to which Dubai is known for today for over a

decade. Recognition in the form of featured articles or awards would be a big boost for the local brands,

apart from this I feel it's always up to the business owner to push themselves to strive to reach the

standards of international brands, competition is always the healthiest form of capitalism if you ask me"

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3.3 Mandilicious

3.3.1 Traditional Roots

In early 2013 Fayez Al Nusari opened the doors to the world's first restaurant specialised at serving the

traditional slow cooked Yemeni cuisine 'Mandi' in a quick service food court setting.

Originally hailing from Yemen, Fayes Al Nusari was always passionate about his culture and traditions.

He embraced it so much so that he decided to take it up as a career and became a registered German

speaking tour guide, which gave him the opportunity later on to travel to Europe and eventually work as

a destination specialist promoting Yemen to potential in bound tourists.

A foodie at heart the thing Fayez was most passionate about was the Yemeni cuisine, especially Mandi.

Mandi is the most ancient forms of Arabic cuisines which is as simple as it is delicious. Comprising of

mainly meat and rice with spices which are all slow cooked for up to 7hrs depending on the type of meat

in an underground oven. The entire process is very time consuming and often is a labor of love which is

why nobody fathomed bringing this traditional cuisine to the 21st century in a quick service setting

where each orders have to be dished out within 10 minutes of orders being placed.

"Mandilicious" the name coined by Fayez is a culmination of Mandi and Delicious "People understand

what the last bit is but they always ask what Mandi is and this part where we begin to sell the brand to

customers who are not familiar with this cuisine." he says with a smile.

One would think bringing one of the most well know forms of Arabic cuisine to the Arab masses would

guarantee success but Fayez found out the hard way that it was not going to be a smooth ride.

Fayez, after his career as a destination sales professional in Europe returned to the UAE to join the sales

team of Majid Al Futtaim one of the biggest mall operators in world. He soon started noticing new local

concepts like Just Falafel and Shawarmanji who have taken popular Arabic Street foods and branded it

suit a modern mall environment and more fascinating was the fact that both these brands were built to

scale due to its franchise model. It is at this time he noticed that nobody was selling Mandi in this

fashion and three years on Mandilicious is 8 Outlets and growing in the UAE market with landmark

master franchise signings in KSA and Kuwait. Interests from Muscat, Canada & South Africa are being

considered also.

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"When I started pursuing this dream of bringing Mandi to the 21st century my friends and colleagues at

that time thought i was crazy! But I decided that if I'm going to do this I need to do it right the first time

and ensure that nobody else will be able to copy this."

3.3.2 A Serious Investment

Today if a potential Franchisee wants to invest in a Just Falafel store it would cost them in excess of

AED100,000/- as a signing fee and for Mandilicious it would cost a minimum of AED 3 Million! Fayez has

a method to his madness. “I wanted to ensure the barrier to entry was really high as this was a very easy

format to copy. I decided to use my initial stores in Dubai to showcase to other markets that my formula

works and it works really well."

Fayez does not sell single stores outside of the UAE instead he looks for master franchisers due to the

huge initial investment, because of the complicated nature of this cuisine and the time aspect for its

preparation Fayez decided that for all markets outside of the UAE potential investors should copy their

Dubai model to the tee, which meant setting up a massive central kitchen which has the capacity to

serve up to 20,000 meals and service up to 25 stores in that region per day. “This not an investment like

a Just Falafel store where you can experiment with a few thousand dollars, Mandilicious is a serious

commitment and we only look at aligning with such parties especially in our core markets within the GCC

like Saudi, Bahrain, Kuwait & Oman."

He also adds "Franchising was the only way for Mandilicious to grow so when we started we ensured

everything was suited to this model. We were lucky to have brands like Just Falafel to learn from even

though our management styles and marketing strategies were different it proved to me that anything is

possible if done properly and with attention to detail."

3.3.3 Embracing the Mall Culture

Mandilicious has a very big first mover advantage and with their current model of operations the barrier

to entry is also very high. Fayez has managed to bring to Dubai some of the best chef's from his

hometown in Yemen including the Yemeni Presidents personal chef. “I wanted to ensure that my

customers both foreign and local get the most authentic Mandi experience. We ensured that all our

cooks and chefs were from Yemen. Some of them have come from villages were electricity and water

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were absent such is the extent to which we have gone to ensure the authenticity, quality and taste of our

food."

When we asked Fayez about the effects of International brands entering in to the retail market in Dubai

his response was two pronged "I would say that this is both good and bad for new local brands like ours,

When I started Mandilicious my biggest benchmarks for service and quality were derived from these

International brands. I learned that anything if package well, communicated well and executed well

could be a success in Dubai and Mandilicious would not have had this level of standards if I did not have

these brands to copy from. On the other hand I feel malls in Dubai are convinced that they require big

names to pull in the crowds and more often they don't give us a second look. I was lucky enough to get

the opportunity to pitch Mandilicious to Mr Majid Al Futtaim personally but he shot down the concept in

2 minutes!"

Fayez also adds that due to the low standards maintained by traditional Mandi restaurants in Dubai and

the messy nature of their service it is hard for malls to understand how we will be serving this type of

food were people have to eat with their hands and avoid creating a mess in their food courts. It was only

after the first store opened in early 2013 in Times Square Center that the word spread about how

elegantly Mandilicious was able to deliver Mandi to the masses in a food court quick service format. And

as fate would have it Mirdiff City Center which is under Majid Al Futtaim's portfolio of malls contacted

Fayez to open an outlet in their mall. " Getting a call from MAF was one of the biggest validation for me

personally as this says to the world that Mandilicious is a viable and sustainable brand that is worthy of a

place amongst the big players."

3.3.4 Unorthodox

From a business standpoint the way Fayez has progressed with his brand Mandilicious would be difficult

to fathom. As MBA students we are taught that the one thing start-ups should be vary about is high

capital expenses and if this is to be believed then Mandilicious would have been a total write off but

Fayez went about investing heavily on setting up a central kitchen which would even rival international

brands, with a capacity to serve 20,000 meals and service 25 stores every day for 7 emirates. One would

think like Mohammad Bitar and Fadi Malas did of growing the base first and for Just Falafel which has

over 700 stores under them only considered a central kitchen much later.

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“I feel every business has elements which will ensure their viability and sustainability in the market, the

same has to be considered when investing into assets for the business. When I decided to establish our

central kitchen my back up plan was to use it as a central kitchen not only for our outlets but for other

verticals within my business. Today my kitchen caters to almost all the five star hotels in the UAE, we also

do private catering for corporate events, weddings etc. For markets like Saudi Arabia this is a very big

gap, the lack of quality operators have opened doors for brands like ours to enter and fill this void. We

have signed a master franchise deal for 40 outlets in Saudi Arabia with a central kitchen bigger than the

one we have in Dubai. Serious investors are happy to know that their kitchens generate a parallel income

apart from the revenue streams that they have with their stores." asserts Fayez.

3.3.5 Educating Customers

Just because Mandilicious is a niche concept it does not insulate them from competition “When a

customer walks into a food court his decision process is more of an elimination process. If somebody

decides not to have rice today then outlets like ours, Shamiana the Indian outlet and Chinese outlets are

quickly eliminated. But if they decide to go with rice then we have a good chance of winning his purse.

On an average I would say we have a 5 to 10% chance of converting a customer when he or she walks

into the food court."

Mandi traditionally is considered a rich food in terms of calories but Fayez has ensured that their meals

are 26% less in saturated fats and 30% less in Calories than a traditional burger meal from MacDonald's

or Burger King. “We are the first restaurant which approached Dubai Municipality to willingly do a food

count for all our meals; we paid in excess of AED 3000 to the central lab to give us an exact nutritional

count for each of our combo meals. This is not a mandatory requirement but we wanted to show our

customers that our food even though contains rice is a much healthier option than the fast food options

available. Our meals are a maximum of 400 calories and everything is made from fresh ingredients and

none of our food is frozen. We have a number one certification from the Central Lab." he says with a

sense of pride.

Marketing strategy for Mandilicious is very different when compared to Just Falafel. “I was a marketing

and sales professional before starting Mandilicious and I'm very much aware of its importance in

developing a brand like Mandilicious which requires a lot of customer education, but I could not get into

hardcore and fully fledged marketing for Mandilicious like Just Falafel who built their brand through

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targeted marketing strategies. Mandilicious like I said before is for serious investors and it requires very

high initial capex hence I decided that we stay away from the common marketing avenues like social

media platforms or advertisements etc. We do have some presence on social media platforms but this is

mainly to communicate with our customers but I did not want to put too much effort into this as my

clients are all B2B."

Fayez knew very early on that Mandilicious has to be communicated well to his customers due to the

core nature of the product which has deep roots in Yemeni tradition. “I knew that I needed a different

medium to educate my customers, if you take KFC for e.g everybody knows that Col Sanders cooked up

his first batch of chicken with his secret spices but at the end of the day it's just fried chicken and Col

Sanders is used for brand recall. So we decided to create 'Nawaf' a 10 year old local Arab boy who goes

about sharing stories of our cuisine and other tradition to make kids and adults understand the roots of

Mandilicious and where we come from and today 'Nawaf' is our Col Sanders."

Fayez was spot on with creating 'Nawaf' because he was suddenly able to communicate clearly across

borders to potential business partners who wanted to invest with Mandilicious. Fayez currently has

offers from business houses from Canada and South Africa who would like to take this brand across

borders. “At the end of the day our cuisine is only rice and meat, and who doesn't eat rice and meat?”

Fayez adds.

3.3.6 Government Validation

Fayez as many of the expats in the business community echo the same gratefulness towards the

amazing infrastructure created by Dubai for entrepreneurs but he feels more needs to be done.

"The mall culture is a growing one especially in Dubai and we have just entered into this but getting a

space in one of the prominent mall was never an easy task especially if you are not a KFC or Burger King.

We were always met with high costs and our options to choose from in terms of location were rubbish as

we were a local brand. Why can't malls dedicate 10% of their leasing space to foster viable and

sustainable local brands with a proven track record? Make a CSR program out of it."

Coming from being a marketing professional specialising in promoting destinations Fayez feels that the

Dubai government should promote brands like Just falafel and Mandilicious through their partners like

Emirates and Etisalat who already have a strong network world wide and in return the brands can

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promote Dubai as a destination through their foreign outlets in North America and Europe. "In the end it

will always be more beneficial for the government as they create a new network to reach new

customers." adds Fayez.

3.3.7 The Formula of Success

Mandilicious the brand so far in our understanding has broken all rules of business common sense.

Fayez has created a concept which looks like it won't be a runaway success on paper but here we are 3

years on he has proved that with pure determination, attention to detail and basic entrepreneurial

instincts anything is possible. Fayez has created multiple revenue streams from his business model

ensuring the brand is protected; interests from potential investors are carefully studied before Fayez

adds them to his growing outlets. "Personally I think one of my biggest achievements with Mandilicious

was that I identified a niche in the market and I built the franchise model in such a way that it will remain

a niche for years to come." Fayez wraps up the interview.

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4. Data Analysis and Critical Review of Gathered Data

Post our interviews which was carried out in a discussion format which touched on key aspects of the

research questions the following are our analysis for each of the 3 brands; Just Falafel, Lemongrass &

Mandilicious

4.1 Inception/Concept/USP

Just Falafel was a labor of love of entrepreneur Mohammad Bitar and his colleagues. Initially this simple

concept opened with a stand-alone unit in Abu Dhabi with aims to grow organically but this all changed,

when Fadi Malas took over the reins of the brand in 2011.After a complete repackaging of the brand

Fadi grew the brand from 1 store to 55 in less than 3 years with another 700 stores in the pipeline in

over 3 continents. Just Falafel was a brand which embraced the social media boom and started to

consistently build a fan base. Their biggest advantage was the word of mouth which eventually added to

their brand equity. The main USP of Just Falafel is the level of innovation with which they have taken a

simple food concept and converted it into an international brand. They carved a niche for them by

creating a completely new food category ensuring they don't get into a direct competition scenario with

giants like KFC and Pizza Hut. Even though Fadi and Mohammad have admitted that in the pursuit of

growth they have over the years neglected their core product which is the food itself, they are currently

refocusing on the one thing that made them a hit, their simple Arabic street food.

Today Fadi Malas is no more the CEO of Just Falafel but the brand he built has garnered the necessary

momentum to ensure this simple concept remains a force to reckon with for any new entrants with

similar aspirations.

Lemongrass on the other hand was the brainchild of ex commercial pilot Stephane Jacques. Initially

Stephane started the brand with a vision to franchise but soon these plans were put on hold due to the

lack of capital to open multiple stores, instead he set out to perfect his concept and today Lemongrass

has become synonymous with quality Thai food in a casual setting. The key difference between Just

Falafel and Lemongrass is that Just Falafel had chosen a food category which was completely new and

customer never knew what to expect which allowed them to set the benchmark whereas Lemongrass

had chosen a very complicated food category which was well known to customers so it was Stephane's

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soul mission to ensure he met his customers’ expectations at every step. Just Falafel set the standards

and customer expectations were dictated by the brand.

Lemongrass's main USP was their consistency, having completed over a decade in the UAE market

Lemongrass has only recently initiated their franchise models. According to founder Stephane it took

them over a decade to ensure that their food tasted authentic and delicious every time you visit their

outlet and now they have ensured that this consistency is seen across their different outlets with key

investments in ERP systems and strategic partnerships with suppliers in Thailand. It would be safe to say

that in the casual dining sector, for Thai food, Lemongrass has no competitors simply because the food

category is just too complicated to take up and scale and Stephane took a decade to master this with

Lemongrass.

Out of the 3 brands we feel that Mandilicious is the one brand which will have longevity. Fayez Al Nusari

defied the odds when he set out to start his Mandi fast food concept. The term Mandi and Fast food

rarely go together as Mandi is a Yemeni form of slow cooking rice and meats for over 4 hours on average

for any dish. Fayez was aware that his concept will require heavy investment to take off and a lot of

education of customers. Today to own a Mandilicious franchise in a country, the minimum investment

required is over $1 million, but there is a method to Fayez's madness and as he explains for

Mandilicious to be successful he knew he had to start with a central kitchen simply because Mandi

cannot be cooked in the kitchens of his outlets. Today his 25,000 sq. ft. kitchen in Dubai can cater to 25

outlets within the UAE and produce 20,000 meals a day. He has ensured that he does not waste this

capacity and has signed up with some of the biggest 5 star hotels to cater to them. As an investor you

would be happy to know that income comes in multiple formats with this vertically integrated model.

This was validated when last year Mandilicious signed a master franchiser deal for the Saudi market with

an initial phase of 40 outlets. Saudi Arabia is the biggest market in the Middle East and Mandi is one of

the staples of the region. With such a signing Fayez has opened doors to international markets in

Canada and Australia which has strong Arab demographics.

One of the key USP's of Mandilicious is their Quality and their vertically integrated model which ensures

a strong return on investment over the years, but having said that its only suited for serious investors

and not for aspiring entrepreneurs who want to dabble in the franchise market which we feel might be a

letdown as they will lose a big chunk of potential customers due to this barrier for entry.

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Welsh, Alon and Falbe (2006) researched and stated that franchising in the US amounts to 40% of the

retail trade and 19% in the UK, representing an amount equivalent to $800 billion gross sales and 33.3

billion GBP within the UK. With such huge response within the business franchise format models, this

provides a big push and supports the growth of the country’s economy at a rapid pace and proved itself

as a highly significant strategy for business growth, job creation balancing the supply-demand ratio. This

research shows that business format models of franchising are best suited for F&B retail industries and

that concept of expansion has been undertaken by all of these brands, where not only the trademark

and logo is shared with the franchisees to operate the said business but also its business procedures,

marketing plans and operations are put into action throughout the franchisee pool.

Even though the major influx, within the economy of the UAE, has been that of international brands

from the US and UK, primarily through master franchising (Hoffman and Preble 2003, Welsh, Alon and

Falbe 2006) due to the unsaturated nature of the emerging market – no studies have been found to

directly address reasons and factors of how the influx of such international brands affect the sense of

creating local brands and franchising them onwards. This lead us to a thought question – is it not

becoming more and more difficult for a home grown, culturally driven brand to utilize the franchise

model, to grow and compete with the more established and recognized names in the game?

All the three brands in our research have started with a different note and mind set yet they all are

eyeing towards increasing brand awareness, brand visibility, and brand loyalty by expanding within the

country and into different markets through the proven franchise model, in hope of replicating success of

major food chains globally. The acceptance from the founders is important here - on how they have to

culturally differentiate themselves from international taste and food categories, at the same time having

an eye for global footprint. The founders have rightly struck a note amongst the hearts of the people

residing in the emerging market of the UAE and also transiting through the country. This is the reason

why the likes of Just Falafel and Mandilicious are being recognized internationally and have been

successful in signing contracts of development in the global market.

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4.2 Competition

In our interview with Just Falafel ex CEO Fadi Malas he points out that the brand adopted the franchise

model mainly to compete with the big brands like Subway and KFC who have thousands of stores

worldwide. Fadi wants to have an outlet in every major city and such aspirations don't come without a

sound base for growth. Just Falafel with over 700+ stores in the pipeline has the potential to be the next

big thing but a revaluation of their product mix is definitely required as the founders were caught saying

they are aware that the quality of their food has suffered due to extra focus in their growth rather than

their food. Having successfully created a strong Social Media platform to speak to their customers, Just

Falafel will definitely be able to grow at a much faster rate in the coming years but currently a lot of

work has to be done to ensure that other local brands don't copy their methods and learn from their

mistakes paving a path for new players to enter in to their space.

Lemongrass is a brand with a successful track record of more than 12 years in the region and founder

Stephane has ensured that whatever his brand does, his quality and consistency of the food he serves is

not affected. Lemongrass is blessed with the fact that not many operators chose their food category due

to the difficulty in mastering the Thai cuisine or hiring authentic Thai cooks due to stringent labor laws

coupled with the high salaries demanded by the Thai government for their expatriates in the country.

Stephane has gone through all the hurdles and it's safe to say he has found the perfect balance in

ensuring this brand has the potential to scale quickly in the next 5 years. We feel that Lemongrass will

see a very steady growth in the coming years thanks to the strategic tie up between Stephane and a

prominent Local family conglomerate who have taken over the brand's Franchise business to ensure

they are present in all the new Malls and other retail outlets. A prime example of this partnership

working well is the opening of the first Lemongrass casual dining restaurant with a full-fledged kitchen in

the new wing of the Al Ghurair Mall. The store has just completed 1 year and earnings have already

beaten expectations. We feel that this is just the beginning of many such successful stores for the brand,

thanks mainly to the cautious approach of Stephane and the influence of his new partner to open doors

for this brand to grow.

On a cautious note, Lemongrass has to be wary of new quick service brands like GoThai & PadThai who

have carved a niche as express forms of Thai Cuisine. We feel Stephane has to have an alternative brand

which will help them reach the mall traffic who don't have the time to enjoy the cuisine in a casual

setting and with the announcement of 8 new mega mall in the region we feel this is the right time for

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Stephane to start looking at this part of the business to ensure that he is tapping on both aspects of his

customer base.

Fayez Al Nusari and his brand Mandilicious has gone about doing things which normal entrepreneurs

wouldn't even think of. Fayez has made sure that barrier to entry is so high that the brand has literally

no competition whatsoever and with the first mover advantage it's going to take a lot of ingenuity and

innovation on the part of new entrants to really worry Fayez. As mentioned in our interview

Mandilicious is not selling single stores to aspiring entrepreneurs who would want to dabble in the

franchise industry, instead the investment and commitment is so high that only serious investors who

have the financial history to take up a master franchise deal are entertained. The concept is simple and

the business model is vertically integrated to ensure that investors who are willing to take the plunge

are rewarded with multiple revenue streams in the form of catering to five star restaurants, catering for

private parties and events all supplied through their central kitchen which is the backbone of the

business. Currently their kitchen in Dubai which caters to all their stores in the UAE alongside the

numerous contracts they have in place with 5 star hotels there is never a period of time that the full

capacity of the facility is underutilized by Fayez. It's this value proposition that has attracted offers from

Canada and the Kingdom of Saudi Arabia. Mandilicious will easily be a market leader within their food

category without a shadow of doubt. Fayez has succeeded in bringing one of the most complicated and

oldest forms of cooking to the 21st century and due to the strong barrier to entry created by the brand

it would be really surprising if they have any competition if at all for the next 5 years.

The UAE has been described as an attractive market for US and European companies in terms of hotel

developments, QSR outlets and retail outlets, as it being an emerging market, is widely untapped

compared to the western saturated markets (Jones 2003). It is a great potential for franchise

development out of which the Gulf area is most lucrative and tempting markets – UAE is ranked 38th on

the global index introduced for attractiveness to US based franchise firms (Aliouche & Schlentrich,

2011).There were other thought questions that popped up during our review for which we had to dig

deeper, such as what and how does the government play a role in empowering young leaders to step

foot within the retail space and boost their growth or how do UAE food brands compete with and

differentiate themselves from established brands which are imported on a larger scale?

Bassem Nasri, 2013 pointed out within his research that the UAE has been described an important

geographic and retail landscape location for importing of foreign franchises but no the creation of local

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ones. Through our research with primary respondents it is well knows that the government of UAE has

provided an excellent retail space, which is continually developing throughout the city with more retail

properties and options opening up for citizens and residents, for foreign investments coming into the

country as well as for local entrepreneurs to have a chance to stand right up with the international retail

giants and offer uniqueness and value, to their consumers, through their product offerings.

To compete with international food brands, studies have shown that it is vital for local grown concepts

to be culturally different, offering a variety that is unique in taste & packaging, and stand with global

food chains such as KFC, Subway, Wendy’s, McDonalds – rather than go against the food category which

they have created and mastered over decades. The secondary research shows that Dubai offers

diversity, urbanization, growing youth market, free trade zones and a massive demand for the western

styled goods and services (Welsh, Alon, Falbe, 2006). This directly impacts the business models

established in the region, the taste of offerings and the fact that entrepreneurs could test their models

for acceptance in the country, eventually impacting the success for both the franchisor and the

franchisee(s).

4.3 Markets

With over 700 outlets in the pipeline in over 18 countries, Just Falafel's market reach is enviable mostly

because the brand is not even 10 years old. Thanks mainly to the aggressive vision of ex CEO Fadi Malas

the brand has been successful in breaking barriers through various social media platforms in order to get

their message out. Fadi Malas's end goal was to be present in every major city and even after his exit

from the company the momentum that he had created still pushes this young brand in to some of the

most enviable locations worldwide. One such location is Bay Street in Canada which is one of the busiest

spots catering mostly to commuters on a daily basis.

The Falafel as a food category is not alien to most customers in fact outside of the Middle East one can

even call it an exotic delicacy. It is a simple food at a very affordable price bracket. Fadi Malas was

successful in launching this food category with slick branding and packaging in a quick service manner to

the world. He ensured that the menu is custom made to cater to different markets outside of the Middle

East and it worked. Just Falafel's mantra is innovation and one visit to their ever growing number of

outlets will prove this. Fadi Malas considers Subway & KFC as his biggest competitors not because of

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their food but due to their business model. Subway has over 40,000 outlets all over the world and Just

Falafel has taken the step in the right direction to one day emulate this kind of growth.

Earlier in our interview with the founder of Lemongrass, Stephane, it was clear that he would have liked

to grow his brand more than what it is today but due to financial restrictions and the arrival of the credit

crunch he put this plan on the back burner. Nevertheless Lemongrass has achieved what most brands

take decades to achieve, they perfected their product offering. It was lessons learnt in the form of trial

and error but the only way a brand can exist in the Dubai market for over a decade is because the

customers liked what they got.

Having completed 13 years in the UAE Lemongrass has currently 2 outlets in Dubai and 4 in Abu Dhabi.

This is roughly a store every 2 years. This growth is understandable due to the complicated nature of the

cuisine and the larger format of operations. Lemongrass prides itself in delivering authentic Thai food in

all its outlets at an affordable casual setting. Currently Stephane and his team are working to ensure that

the level of consistency is kept similar throughout their 6 outlets. This way the customers are assured

that they get the same green curry in Dubai as well as in Abu Dhabi. This is easier said than done. During

our interview, Stephane told us that they have entered into strategic partnerships with key sauce and

ingredient producers in Thailand to ensure that they are able to deliver on the promise of consistency.

Currently Stephane does not have to worry about his chef leaving and resulting in a complete change in

the taste of his food. Lemongrass has also invested in an ERP system which ensures that stocks are

managed well and also that all the staff have access to the recipes for all their main dishes. The ERP

system was developed by Stephane's IT company which he setup to help Lemongrass have more of a

structured monitoring system and today he has achieved this and is offering similar solutions to other

restaurants in the region.

Such key investments into the brand have setup Lemongrass to scale its operation at a much faster rate.

Franchisees can copy the same processes and methods to ensure they manage their outlets in a similar

fashion and with Stephane's IT company available for support, this is a win-win proposition for anyone

who would want to take up this Franchise. Even though Lemongrass has not seen astronomical growth

like Just Falafel we feel the brand is in a much better position that Just Falafel to scale more quickly

having done all the ground work within the next decade.

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Having only started in 2013, Mandilicious is a very young brand. Fayez Al Nusari had a vision to bring the

traditional slow cooked Mandi to the 21st century and it’s safe to say he has done it in a manner that

will be very hard to replicate. Already Mandilicious boasts 8 outlets in the UAE with 5 in Dubai, 2 in Abu

Dhabi and 1 in Fujairah. Initially Fayez was met with a lot of skepticism when he revealed his plans to

open a Mandi fast food restaurant mainly due to the time consuming cooking methods of this particular

food category but he still went ahead with his vision which is now paying dividends. It is a major

achievement for a young brand to already have 8 outlets under their belt without even having

completed 3 years in the region. Mandi was always considered a food category that could only be

enjoyed in one of the many local Mandi restaurants and often it’s a messy affair as the locals prefer

eating with their hands which is a traditional way of consuming this cuisine. Several of the malls wanted

to avoid this messy aftermath and felt it might deglamorize their pristine food courts.

Fayez knew of this social stigma and the way his Mandi was perceived by locals and expats so when he

did open his first outlet everyone was taken aback to see well packaged boxes with nutritional values

and other relevant information all presented in a slick and cleanly designed formats. Today Mandilicious

is the only brand in the world which caters to this food category and it was not a cheap affair for Fayez

to bring his brand to the level it is today. Mandilicious outlets are catered through their 25,000 sq. ft.

central kitchen which ensures food is freshly prepared every day in their traditional underground ovens

by Yemeni chefs who were handpicked by Fayez from his home town in Yemen; such was the attention

to detail which is the key to the success of the brand. Today to become a franchisee of the brand is not

cheap. Fayez explains that for him to be able to serve a Mandi dish within 5 minutes of a customer

placing an order would not have been possible without his central kitchen. Today if an investor wants to

take the brand outside of the UAE they need to be ready to make the similar investments that Fayez had

to ensure service standards and customer expectations are met as result of which the barrier to entry

which he has created ensures that he is insulated from copy cats with aspiration to enter this food

category. This formula was validated when last year he signed on a Saudi group to recreate his business

model in the biggest Arab market in the world with an initial commitment of over 40 stores and

currently Fayez is also in talks with investors in Qatar, Bahrain, Oman & Canada who see the madness in

his methods and we are confident that this is a young brand that will be a force to reckon with in the

next 5 years even more so than Just Falafel who are in the Arab food category.

Franchising business & legal infrastructure has been hardly identified where the UAE government has

recently realized the benefits of the franchise business model (Furey, 2007) and has started to

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encourage franchising, together with the support of franchising summits and events to develop interest

amongst the youth. Due to the emerging status of the country, its lucrative marketplace and its ability to

thrive on the tourism industry, UAE has captured the interest of the world for political as well as

economic reasons (Welsh and Raven, 2006). This, along with the primary data collection, explains why

the geographic location and the offerings of the UAE are of absolute high caliber.

The UAE has managed to strategically place itself at the centre of world economy where people from

around the world are present to see a brand blossom and as Furey (2007) mentions that the region is

witnessing an annual growth rate of 27% within the franchising sector with its largest shopping

developments (Young, 2001; Glynis Jones, 2003) providing high brand penetration. The diversity is what

helps the brand gain traction within the country and have the ability to reach various markets in the

Middle East and internationally towards the UK and America’s. The retail expenditure is currently

equivalent and comparable to high developed world economies (Jones 2003).

The key to the success of the three primary brands researched is that of creating a food category, be it

within the QSR or fine dining footprint, which is culturally inherited which ticks the right boxes for

creating fresh concepts. The country and the laws governing businesses within this market just help

them push boundaries and shake up the food retail franchising market in the region.

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5. Conclusion

International Brands - A Catalyst or an Obstacle for Growth of the Franchise Industry in Dubai?

When we started our research we went into the interviews with 3 of the most successful local food

brands with the hope that at least one of them would cite the influx of international brand as an

obstacle to their growth but what we gathered after each interview was surprising. Each of the 3 brands

were convinced that they were able to elevate their respective brands to international standards thanks

to the lessons they learnt by observing brands like Subway, KFC etc. Fadi Malas the ex CEO of Just Falafel

said that thanks to brands like Subway they were able to compete with them head on in the food courts.

The mall culture is very prevalent in Dubai thanks to some of the largest shopping avenues being

present here. This has been a key attraction for a lot of the International brands who all want a piece of

the action and due to this heavy influx they set the benchmarks for aspiring local brands such as Just

Falafel & Mandilicious to be even considered an equal and eventually giving them a spot in one of the

many food courts. During our interview with Fadi Malas of Just Falafel he said that brands today need to

earn retail spots in Dubai Mall or Mall of the Emirates but it also does not mean that brands can only

survive if they are in high end retail spaces. Customers appreciate good food and good service, its only

brands that take this to another level through social media engagement and CSR programs that make it

big. Entrepreneurs are spoiled for choice if they ever wanted to learn or emulate a super brand thanks

to the international appeal that Dubai poses anyone can walk into the Dubai Mall food court and see

firsthand how these brands operate on a daily basis.

5.1 Earning their spot

When we interviewed Fadi Malas we went in with the expectation that here is someone who will

definitely have a lot to say about the high rents and the nature of major mall's to overlook local brands

whilst trying to fill their food courts, but instead we were amused at his take on things. Fadi was of the

notion that a lot of local brands have it "easy" due to the ease of access to world class infrastructure

coupled with services which are of international standards, as a result of which its fairly simple and

straight forward for an entrepreneur to set up his/her company in Dubai. The major malls like Dubai

Mall and Mall of the Emirates are aware of this and always require proof of concept or in other words

they require local brands to show proof of successful existence within the UAE. Brands with a proven

track record are only considered to even apply for a vacancy in the food court.

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In most cases these malls have scouts who keep a track of new and exciting brands both locally and

internationally and as soon as a spot opens up these brands are approached with the proposition to

open their doors in one of their malls. A local brand "earns" their spot when you receive an invitation

from the Mall to open your store in one of their newly vacant spots. In most cases Malls offer attractive

perks like reduced rents and smaller cuts in the overall earnings per annum to lure these locally

successful brands. Fadi Malas and Just Falafel took 3 years to "earn" their spot, to earn their right to be

next to a KFC or a Subway and he feels that it is a privilege to be amongst such super brands and lets you

know that your brand has truly arrived now.

Just Falafel, Lemongrass & Mandilicious were all met with obstacles when they initially approached the

big malls to campaign for a spot in their food courts but these obstacles where in turn seen as

challenges to their respective founders. They felt they still needed to work on their brand to be

considered worthy of an outlet in Dubai Mall or Mall of the Emirates. This has driven them to further

improve their operations, customer engagement and their core product - their food. We feel

International brands help local entrepreneurs dream big in manners of positive emulation. If brands like

Subway or KFC did not exist then customer expectations will be low. The International brands have

helped in raising customer expectations and as a result positive enterprises are created.

5.2 The Key Research Question

But this still does not answer our key research question which is if these brands are considered a

hindrance for the growth of local brands? The answer is Yes and No. From our above research it's easy

to identify a positive co-existence between local and international brands so naturally it is easy to

assume that they in fact act as a positive catalyst for growth but being MBA students we are always

asked to question the obvious and challenge the status quo. We feel even though International brands

have positively impacted growth of new and innovative local brands we are vary of the fact that the

balance is still in favor of International brands when compared to the number of local brands in

operation within the local market.

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5.3 India - A Rude Awakening or the Ultimate Equalizer?

Brands like KFC and McDonalds are synonymous with the term "fast food" and are brands which have

taken over the world through their franchise models. In the Mid 1990's both these brands entered in to

the Indian market with hopes of emulating the similar success they have enjoyed for over 50 years in

other parts of the world, predominantly in the US. But both these brands were faced with problems like

they never experienced before. India was under the British rule for over 200 years and after achieving

freedom in 1947 under the umbrella of the world's largest democracy the Indian market was

inaccessible for foreign brands which actually paved way for what it is today, a nation with one of the

biggest economy in the world after China with local brands taking the center stage in all sectors ranging

from Automotive, IT, Retail and so forth.

KFC & McDonald’s were faced with uncertainty due to the ever changing tax policies put together by

ruling parties elected every 5 years. Tax reforms were put in place to protect the domestic economy and

local businesses and before long KFC had to close its operation in India after being branded a "foreign"

corporation whose operation within the country would pave way for closures of local food producers

such as chicken farmers as they purchased their supplies from suppliers outside of India. It was only in

2004 that they resumed their operations in India but this time around they learned from their mistakes

and ensured they spent a good number of years setting up local supplier networks to ensure the

domestic economy also benefits by ways of job and opportunity creation. But still KFC faced the

unknown when it came to tax policies which targeted International brands operating within the country

but being the second largest economy and MacDonald's already having a head start they could not

ignore the market for all its merits.

McDonald's spent the first 6 years after its decision to open up in India setting up a local supplier

network. They ensured that all their suppliers were trained to deliver products with International

standards with a local flair. Jobs and opportunities were created along with a promising supply chain to

ensure that the brand had a good base to grow within the country from. But McDonalds have also

struggled over the years mainly due to their core product offering which are beef burgers and beef is

considered a taboo in India due to religious beliefs marking the cow a sacred creature. In an

independent study done by Technopak in 2001 it was found that over 70% of the Indian population

prefer home cooked meals and eating out even if it’s a chicken Big Mac was reserved for special

occasions such as Diwali or Christmas in addition to this the Indian taste buds found the bland taste of

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burgers and fries too alien for their liking. MacDonald's responded to this by completely removing beef

from their menus and replaced their beef burgers with chicken and mutton substitutes. They also added

"masala" flavors to their menus along with more vegetarian options to go with their non-vegetarian

combos. But in spite of all these efforts McDonalds still fell into hot water when they got into a long

legal battle with its now former joint venture firm Connaught Plaza Restaurants from whom McDonalds

wanted to purchase 185 of its initial restaurants to redistribute it to its new owners in their network

based in other states but the Indian high court put a stay on this purchase from going ahead and halted

McDonalds from taking the case to an international court for arbitration to protect the investment of its

citizen. This is just an example of how the Indian government ensures that investments and agreements

done on their soil remains intact and seldom do International brands get their way. Due to the court

order McDonalds ended up losing its foot hold and first mover advantage which allowed KFC to catch up

with them. According to a study done by Euro monitor in 2008 McDonalds reigned supreme amongst

the western brands with a total revenue north of Indian Rs. 6.6 billion while KFC lagged behind with

sales of Indian Rs. 1.5 billion mainly because they only reentered in to the Indian markets in 2004. Today

KFC has overtaken McDonalds with an annual turnover of over Indian Rs. 16 Billion.

In 2012 the Indian government under the Congress Party, the then ruling party announced that they are

reviewing a tax proposals in the new budget which would allow the government to back track and tax

foreign companies operating within India as early as the 1960s, this news was met with an exit of over

half a billion US dollar leaving the Indian stock exchange in fear of being liable for large tax amounts. In

an interview with Dr. Pravakar Sahoo at the Institute of Economic Growth (IEG) conducted by the

National Bureau for Asian Research (NBR) in 2012 for the Senate India Caucus reviewing the budget for

the year Dr. Sahoosaid "India will not realize the full potential of outside investment unless the

government confronts political opposition to key policies, such as allowing FDI for multi-brand retailers

like Walmart and Target, and undertakes crucial reforms to sustain investor confidence".

One of the key lessons we can derive from our quick glimpse into the hurdles faced by International

brands like KFC & McDonald's in India is that the role of government however small or big is imperative

for fostering growth in a domestic level. Even though India is an extreme case due to its close door

policy towards FDI, it is still an example to go by. If we stop for a moment and imagine if the Indian

markets were as welcoming to foreign enterprises as much as Dubai is, will there have been companies

like Reliance or Infosys today? "Necessity is the mother of all inventions" - which is also the same for

demand and supply. Due to India's closed door policies towards FDI after its independence local

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companies took in onto themselves to supply to the demands of the nation across all sectors. The Indian

government has always had a tight grip on Foreign Brands infiltrating the economy which has ensured

that the money in the country remains within the country and as a result local brands flourish. Café

Coffee Day is one such example of this, in a world where every second corner has a Starbucks in India

you would find a Café Coffee Day which is the brainchild of entrepreneur V.G.Siddharthahas over 1640

outlets in 29 states in India. One would stop to wonder if this would have been possible if Starbucks had

free reign in India.

Today India is a self-sufficient nation and this is what we as part of our research wanted to highlight.

According to the economic reports released by the Dubai Economic Department it was noted that the

retail sector contributed to over 30% of its overall GDP in 2013-14 and this was set to increase. Unlike its

neighbor Abu Dhabi, oil is not a major contributor to the Dubai economy, tourism and retail is, and we

feel the Dubai government need to capitalize on this opportunity to look at a tax policy towards foreign

companies operating in Dubai and local companies who represent these brands within the Dubai retail

sector. The following is a quick glance at the key elements of the 3 brands which we feel emulates their

international counterparts (next page):

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Table 5-1

The above comparison gives you an idea of the influence and impact International brands have on local

developing brands. These are some of the positives the influx of international brands brings to a local

economy. It develops and creates a platform for entrepreneurs to create the next big brand. But if we

take a close look at the retail sector in Dubai it is always the case that international brands reign

supreme and one would imagine that a lot of the money spent by customers are fed back to the parent

brands operating outside of the country coupled with a no tax policy we feel Dubai is in the losing end

and the playing field is anything but level.

When we interviewed our 3 brands all of them were of the opinion that the Dubai government is fair in

allowing this influx of international brands and that the government has done a lot to promote the spirit

of entrepreneurship within the country. We feel even though Dubai has always welcomed companies

with open arms thanks to their free zone facilities and unparalleled world class infrastructures it should

now start looking further ahead to curb this very obvious leak of money leaving the country. There

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should be strong parameters set in place for International brands wanting to operate within the country

at least to level the playing field especially more so as the Dubai economy is more dependent on non-oil

revenue from sectors such as tourism and retail. A good part of the international brands operating in

Dubai are master franchise deals signed by local family conglomerates we feel that the Dubai

government should incentivize these conglomerates and encourage them to create more home grown

brands and concepts. A taxing policy similar to that of India though not so high to begin with needs to be

set in place for every foreign brand wanting to operate in the country either directly or indirectly

through an agent. A summary of this could be seen in the table below:

Table 5-2

Local businesses are the corner stones of every developing nation as it promotes entrepreneurship and

creates new jobs but having said that the question is whether the market requires government

intervention? Is the income generated directly or indirectly such a big contributor to the annual GDP

that the government needs to monitor it as it is the case in the US where the franchise business is a big

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contributor of its overall annual GDP? According to HIS Economics one of the leading forecasting and

analysis companies in the world in a report created for the International Franchise Association in 2015

they revealed that the gross domestic product (GDP) of the franchise sector will increase by 5.1% to

$521 billion for the US markets. With such income being generated through this particular industry it

would be wise for US government to closely monitor the space especially due to their tax policies. But

when it comes to UAE franchise market which is at its infancy and not as mature as the US markets it

would be debatable whether to setup bodies to monitor the franchise sector? Currently it's just another

form of business activity which thrives in the region thanks to its open door policies and ease of

incorporation for any business and the government is more focused on entrepreneurship and it would

be premature to closely monitor the franchise market but if a tax policy is setup now it would help the

government even the scales and create a better mix of local and international brands operating in

harmony within the region.

We would like to conclude our research by saying that all the three brands which were the highlights of

our study were formed by entrepreneurs who dreamed of one day becoming the next KFC or McDonalds

and so far thanks to the influx of such international brands into Dubai it is paving ways for local

entrepreneurs to create the next big brand as was the case with Just Falafel who in their brief time of

existence are already in over 18 countries, but we feel that the government has still a lot of work to do

in the form of creating a more balanced platform so as to ensure more such local enterprises are

created and nurtured to be able to one day become super brands like their foreign counterparts.

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6. Personal Learning

6.1 Kavin Ujjainwala

What lured me towards studying the franchise environment within the UAE economy is the growing

interest of entrepreneurship, backed by the governments enormous support towards creating funds and

the foresight of giving importance to innovation & developing young minds, the growing number of

locally developed food & beverage retail brands, in addition to my personal exposure and expertise

within the food retail industry. My personal experience includes managing family developed restaurants,

our own brand, as well as being a sub franchisee for an American brand in the UAE. Management style

between these two concepts are vastly different and has helped me gain fair amount of knowledge

from the perspective of operations, systems, training manuals, costs breakdown between an

international brand vs. local creation of brand and most importantly brand equity.

Now it was time to have a deeper understanding, within the UAE, of what makes an F&B brand trusted

by its consumers, the strategy the founder and the team create, how important is differentiation, how

the influx of international F&B brands impacts the development of locally based food chains and if

franchising is the model these locally created brands chose for expanding their presence, if so how

successful have they been. I was greatly supported by my group member, Vinay, who brought good

ideas to the table, in terms of whom to approach, the lead up of the questions to be asked during the

interviews and later decoding the interviews and understanding the findings.

All the three brands in our research have been personally approached and interviewed to understand

the reason of their existence within the market and the acceptability by its consumers. It was my

personal belief that the people with entrepreneurial mindset would not appreciate the fact of royal

families buying off master franchising rights from international brands and opening successive outlets in

the country. It was surprising to realize that all three founders were in favor of the government’s policies

to ensure world class food retail outlets were established in the country, to develop Dubai as a brand,

and also provide learning & development opportunities to the people who are willing to enter similar

industries. After discussing with them, it did make sense because the entrance of high caliber brands

pushed the entrepreneurs to create different and innovate taste and menus based on local & cultural

food thriving on similar operations to international brands. The level of understanding and knowledge

sharing within the market has been enormous due to this.

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Out of three brands interviewed, both of us came to the conclusion that even though Just Falafel has

taken the top spot for the most number of outlets globally, Mandilicious has truly been an

entrepreneurial stride by Mr. Fayez who had the courage to invest in a central kitchen first before

opening its first retail outlet because he had the foresight of how the operations of his food being

served to each and every consumer would be like. Both Just Falafel and Mandilicous have their menu

developed by local cultural trends as compared to Lemongrass which is a Thai cuisine. Just Falafel

focused on growing rapidly and did not really cater to the quality of food being served, due to which we

believe their brand equity has decreased during recent times whereas Mandilicous is new, fresh,

focused on quality and operations which would boost their brand value and recent agreements to

develop their brands in Saudi Arabia and Canada only suggest they are on the right track to attain their

objectives. The key point taken from this research is that even though the operations, the guidelines,

the manuals, the franchising development method could be replicated what is most important in

developing a truly globally successful brand will be dependent upon how we can differentiate the menu

culturally rather than copying successful menu boards – rather than eating a pie of the cake, create a

new food category which has been smartened and fashioned for the generation Z.

After successfully completing interviewing key figures and understanding the franchise environment

here in the UAE, I have realized that to successfully create & sustain food retail brand equity, and

eventually franchising it forward to gain dominance it is important to understand the cultural taste,

innovate the menu offerings, focus on specializing on one core product and be ready to experiment. It is

important to identify the gaps and build on clear business objectives.

Apart from learning the food retail environment of the UAE, general learning’s have also been gathered

during the course of this project. It took me several months to truly define the research question I will

be targeting at since I knew I had to narrow down exactly what question I needed answers for. The

complete process starting from hunting for and reading various literature, building facts, creating an

outline for research to eventually breaking down the cluster of information and arriving to outcomes of

the research questions has helped me to build strong arguments and have a different POV of the food

retail environment in the UAE. The most differentiating part of doing this project as compared to other

assignments during the course of the MBA was the open nature of conducting research and creating

your own boundaries and constraints to eventually narrowing down the information collected towards

your research question.

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6.2 Vinay Premchandran

Being born and brought up in the UAE I can confidently say that I have literally seen an entire city spring

up over the last 3 decades. Dubai has always been known to do the impossible whether it is building the

world's tallest tower or the world's largest shopping mall. As a child growing up in this dynamic city you

were brought up with the belief that anything is possible and this city has made all of us believers. It

should come as no surprise of the ever existent mall culture in Dubai and as an expat I have had the

privilege of experiencing some of the world's top brands all ranging from fashion to food as a result of

which it was always been a childhood dream of mine to one day own my very own food brand with

stores in some of the best malls in Dubai, but over the past decade I had always found that the big malls

like big names and mom and pop stores which used to be around during my school days suddenly had to

make way for the big brands and before you knew it you had nothing less than 15 to 20 International

brands sometimes all under the same roof but under the master franchise agreement with one or two

big conglomerates operating in the UAE.

And then came along Just Falafel, a local brand which is today in over 12 countries with 700+ stores. This

success story is what motivated me to explore mine and Kavin's hypothesis which is that to be able to

compete with brands like McDonalds and KFC you should either have a lot of money to build your brand

or there has to be a serious check on the side of the government to curb this very evident flooding of

international brands into Dubai. Kavin, who is in the restaurant business in the UAE has explored this

space in the past and has always been met with high costs or unrealistic demands from mall

management in the form of higher percentage of profit sharing and high rents. It begs the question as to

how can one build their own brand in a city which promotes the entrepreneurial spirit in everything it

does? We were convinced that without the backing of a deep pocketed investor growing and developing

a brand was just a pipe dream.

Growing up in Dubai a city of opulence as it is today we felt that family conglomerates such as Al Futtaim

and Al Shaya all had an unfair advantage as they had the financial history to easily take up master

franchise agreements with some of the biggest food brands in the world and before you knew it they

flood the market with multiple stores in all the prominent location making it close to impossible for a

young entrepreneur to create and startup a new brand in the city. We felt that the government should

step in to nurture and incentivise local entrepreneurs who are creating homegrown brands instead of

importing brands into the city. But during our interviews all the 3 brands were of the opinion that the

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government is doing enough to ensure the playing field is level and thanks to the influx of the

international brands it has given them a better insight into what it takes to create and operate a world

class brand. They felt these brands have set a very high benchmark for local brands which all in all works

out to the benefit of the city which is considered by many as one of the top destinations in the world for

leisure and tourism.

Me, personally after our research and analysis of our study I'm still not convinced as I'm aware of the

high costs that is involved to even open a single store in a prominent mall. My assessment of this

situation is that there needs to be government intervention if Dubai wants to create a stronger base for

its growing economy. Local brands and businesses are without a doubt the cornerstone of any growing

economy and I feel that if in the future a situation arises like the financial crisis in 2007-08 Dubai will see

a big drain and slowdown of their GDP as most of these brands will curtail their expansion plans and in

some cases might even lay off people to see better returns. A good example is the banking sector within

UAE, during the financial crisis we saw a lot of the international banks cut their operations and laid off

people to ensure that their International financial outlook was in a better position, it is the local banks

that flourished during this period. Even though comparing the banking business with the food retail

business would seem a bit out of the ordinary but the underlying message was that the government

support ensured the banks didn’t go bust. My recommendation is why not extend similar support for

encouraging local business by way of incentives in the form of subsidized rents, guaranteed spots within

premium mall for at least 10% of their total retail spots and value added taxes towards other business

which bring in International brands into the markets. Foreign Direct investments within the country

need to be carefully monitored by the government like India does. Thanks to the stringent tax policies

towards foreign companies entering and operating in India the interests of local businesses are

protected.

The whole experience of dwelling deep into a research study was an eye opening experience all

together. As an MBA student and a working professional it has given me immense confidence when it

comes to tackling a problem within my organization. I feel that this whole experience has given me a

stronger insight into my strengths as a manager and more so it has equipped me with the sense to look

at problems in a 3 dimensional way without being worried about the finer details. I feel that to become

a future leader one must be capable of stepping outside of an issue and look back at it at a macro level

and understand the ripple effect that a decision made at a junior level creates for the entire organization

as a whole. During our Interviews we were fortunate to have spoken to industry trailblazers like Fadi

65

Malas the brain behind Just Falafel and Stephane Jacques the founder of Lemongrass but none

impressed us more than Fayez Al Nusari the founder of Mandilicious. His shear guts and instincts have

helped create an industry first within the GCC and the astonishing fact was that he did with a food

category that was in the region for centuries. The bottom line is that yes entrepreneurial spirit is not

something everybody can learn, you are either born with it or not but every now and then everyone

needs a bit of an helping hand and I feel this push should be initiated by the Dubai government and I'm

sure we will be seeing more brands like Just Falafel and Mandilicious enjoying success within the region.

To conclude I would like to say that as I reach the final hurdle in my journey with the MBA program in

Strathclyde I can confidently say that the years of learning has come to a full circle, during the course of

this research study we as a team felt confident whilst interacting with the founders of our 3 brands, we

were asking the right questions to get to the bottom of our hypothesis and some assumption while it

held true others were disproven, overall this was a tedious but fruitful experience and I eagerly look

forward to the numerous challenges in the course of my professional career thanks to this experience.

66

7. References

FranChoice. History of Franchising. Available: http://www.franchoice.com/franchise-information-

guide/what-is-franchise/history-of-franchising. Last accessed 23rd September 2014.

Hilary Strahota. (2007). Benjamin Franklin: Father of Franchising?.Available:

http://www.franchise.org/Franchise-News-Detail.aspx?id=35738. Last accessed 23rd September 2014.

IFA. (2000). An Introduction to Franchising. In: Barbara Beshel An Introduction to Franchising. USA: IFA.

2.

Welsh, D., Desplaces, D., & Davis, A. E. (2011). A Comparison of Retail Franchises, Independent

Businesses, and Purchased Existing Independent Business Startups: Lessons From the Kauffman Firm

Survey. Journal of Marketing Channels , 18, 3-18

Preble, J. F., & Hoffman, R. C. (2006). Strategies for Business Format Franchisors to Expand into Global

Markets. Journal of Marketing Channels , 13 (3).

Bellett, G. (2003). More Canadians finding future in franchising: Being your own boss is part of the

attraction. Vancouver Sun. July 14, E1.

Petersen, B., & Welch, L.S. (2000). International retailing operations: downstream entry and expansion

via franchising. International Business Review. 9 (4), 479-496.

Dianne H.B. Welsh, IlanAlon, Cecilia M. Falbe. (2006). An Examination of International Retail Franchising

in Emerging Markets. Journal of Small Business Management. 1 (1), 3-15.

Furey, T. (2007), Franchising in the Middle East, Dubai and Beyond. Franchising World. Jan2007, Vol. 39

Issue 1, p86-89, 3p

Welsh, D. H., & Raven, P. (2006). Family Business in the Middle East: An Exploratory Study of Retail

Management in Kuwait and Lebanon. Family Business Review , 19 (1), 29, 20 pgs.

67

Mary Ames. (2012). 5 Tips for Franchising in the UAE with N_K_D Pizza. Available:

http://shelter.ae/profiles/blogs/5-tips-for-franchising-in-the-uae-with-ian-ohan-n-k-d-pizza. Last

accessed 27th September, 2014.

Aliouche, E. H., &Schlentrich (2011), U. A., Towards a Strategic Model of Global Franchise Expansion,

Journal of Retailing. 87 (3, 2011), pp. 345–365

BassemNasri. (2013). Cited difficulties facing retail franchising in the middle east. In:

BassemNasri Emergence of Local Retail Food Franchises in the Middle East: The Influence of

Foreign Franchises.Grenoble Management School. 55-56, 64.

Welsh, D. H., Alon, I., & Falbe, C. M. (2006). An examination of international retail franchising in

emerging markets. Journal of Small Business Management , 44 (1), 130-149.

Furey, T. (2007), Franchising in the Middle East, Dubai and Beyond. Franchising World. Jan2007, Vol.

39 Issue 1, p86-89, 3p

Young, J. (2001). Retailers opt for a market full of eastern promise. Retail Week, 31 August , p. 14.

Marketing Department - Wharton University. (2009). Made for India: Succeeding in a Market Where One

Size Won’t Fit All. Available: http://knowledge.wharton.upenn.edu/article/made-for-india-succeeding-

in-a-market-where-one-size-wont-fit-all/. Last accessed 23rd Feb 2015.

Luthra, S. (2012). Determining India’s Economic Trajectory: The Role of Foreign Direct

Investment. Available: http://nbr.org/research/activity.aspx?id=204. Last accessed 23rd Feb 2015.

Prabhakar, B. (2011). How KFC & McDonald's plan to target each other in India. Available:

http://articles.economictimes.indiatimes.com/2011-08-28/news/29935857_1_kafeccino-kfc-s-krushers-

colonel-sanders. Last accessed 23rd Feb 2015.

Sharma, ABahree, M Beckett, P. (2012). Rising Risk: Foreign Firms Sense Hostility in India. Available:

http://www.wsj.com/articles/SB10001424052702304177104577311441951841400. Last accessed

23rd Feb 2015.

68

Siddhartha, V.G. (2011). Everybody Said It Wouldn't Work. Available:

http://forbesindia.com/article/leaderhip-awards/vg-siddhartha-everybody-said-it-wouldnt-

work/29552/2. Last accessed 23rd Feb 2015.

IHS Economics. (2015). Franchise Business Economic Outlook for 2015.Available:

http://emarket.franchise.org/FranchiseBizOutlook2015.pdf. Last accessed 4th Mar 2015.

69

8. Appendix

8.1 Participant Information Sheet

Name of Department - Management

Title of Project - The Food Franchise War - A study of the growing Franchise market within the food

Industry in Dubai which is being infiltrated by International brands thereby leaving very little market

share for the home-grown brands to grow.

Introduction

We, Mr Kavin Ujjainwala & Mr Vinay Kumar are MBA Students at the University of Strathclyde, P.O.Box

16062, Dubai, UAE. We are conducting a research and study on The Franchise Industry in Dubai within

the UAE and the title is as mentioned above. The project is conducted under the supervision and

requirement of the university and follows a strict ethical guideline to ensure ethical and fair

management of interviewees and other contributors. As a part of this we wish to Interview for the

purpose of collecting primary data for the research as we feel you will be a valuable asset to this project

and the insights you share could help us further shed light on this topic. Please do not feel obligated to

answer any of our questions should you feel the information passed on might be of a sensitive nature

which in turn might jeopardise you in any manner.

What is the purpose of this investigation?

The sole purpose of our investigation is to collect primary data in the form of one to one interviews and

questionnaires as our project has a strong focus on qualitative data rather than quantitative. Our reason

for this research stems from the fact that more often International food brands are taking the spotlight

within this vibrant market that is Dubai and we hope to uncover some of the key strategies that were

developed by Home-grown food brands who have grown successfully via the franchise model and has

managed to stand out from the ever crowding scene which is the food industry in Dubai

Do you have to take part?

Making the choice to be part of this project is strictly at the discretion of the individual to whom we have

presented this request. At no point will he or she be forced or coerced into being an involuntary

70

participant in our research. All the information that we gather during our research with the permission of

the individual will be shared in an unbiased and professional manner. We will also be more than happy

to ensure a soft copy of our final project is presented to the participant on request. Photographs of the

key individuals will only be taken on approval from the participant.

What will you do in the project?

Our main focus during our research and investigation phase is to gather as much as real life feedback

and scenarios. There will be a strong focus on qualitative information than quantitative information. One

of our key methods will be by means of direct one on one interview. You may be required to spend as

much as up to 1 hour during this process. All Interviews will be scheduled during weekdays between 9am

and 5pm. We are happy to accommodate any suitable timing to suit the interviewee. In some case where

the key individual is unable to meet us for a direct one on one interview we will be mailing the questions

via email and a call back will be scheduled to discuss any queries we may have to ensure that the

information shared with us is presented as true as possible. For certain key stakeholders questionnaires

will be used to get to the bottom of a relevant or preexisting trend for our project.

Why have you been invited to take part?

If you are an SME owner of a food brand or a master franchiser of a food brand then you are our key

individuals on whom we will be depending on to help us draw the franchise business landscape within

the region. If you are a key stakeholder such as an individual who manages a chain of franchise on behalf

of the owner or if you are part of a law firm which helps in drawing up contracts for franchise

agreements in the region then you are also an integral part of this research project. If you don't fit any of

the above categories then you have been contacted to assess a prevalent trend that may exist in the

market, you may be the end consumer!

What are the potential risks to you in taking part?

The aim of this project is to create a road map for new entrepreneurs who might be considering entering

this market and as a result our research is mainly targeted towards the qualitative aspect of things. Most

of the interviews will be captured as it is and will only be paraphrased to suit the flow of the project and

at no point will any information be twisted to arrive at a different outlook than that was portrayed by

the interviewee. If you are not the owner of a particular establishment and do not wish to have your

71

name published as to quoting a key point please inform us in advance so that suitable pseudonyms can

be given. All names and designations of all our interview candidates will be published as it is which might

be unsettling for some individuals and we urge you to consider this before committing to this research.

What happens to the information in the project?

All information received will be stored securely in either locked or secure cabinets, or password protected

electronic files. All references to individuals or organizations will be removed or given pseudonyms if data

is to be included within the submitted study, unless express permission has been given. All data will be

destroyed on submission and completion of the research project.

The University of Strathclyde is registered with the Information Commissioner’s Office who

implements the Data Protection Act 1998. All personal data on participants will be processed in

accordance with the provisions of the Data Protection Act 1998.

Thank you for reading this information – please ask any questions if you are unsure about what is

written here.

What happens next?

If you have read all of the above conditions in which this research will be carried out and is happy to

oblige then please fill out the consent form at the bottom of this document with you signature and mail it

back to us.

If you feel uncomfortable with being part of this research project and do not wish to participate then

please notify us via email and we thank you for the consideration and your valuable time.

72

Research Ethics

This investigation was granted ethical approval by the University of Strathclyde Department of

Management ethics committee.

If you have any questions/concerns, during or after the investigation, or wish to contact an independent

person to whom any questions may be directed or from whom further information may be sought

please contact:

Department of Management Ethics Committee

University of Strathclyde Business School,

Department of Management,

199 Cathedral Street,

Glasgow.

G4 0QU

73

Researcher Contact Details:

Name

ss

E-mail

Contact Number Vinay Kumar Premachandran.vinay@gmail.com

+971507374461

Kavin Ujjainwala Kavin.ujjainwala@gmail.com +971506638567

Supervisor Details:

Dr. Frank Martin

frank.martin@stir.ac.uk

Telephone: 01786 467346

74

Consent Form

Name of Department - Management

Title of Study - The Food Franchise War - A study of the growing Franchise market within the food

Industry in Dubai which is being infiltrated by International brands thereby leaving very little market

share for the home-grown brands to grow.

I

(PRINT NAME)

Hereby agree to take part in the above project

Signature of Participant:

Date

I confirm that I have read and understood the information sheet for the above project and the researcher has

answered any queries to my satisfaction.

I understand that my participation is voluntary and that I am free to withdraw from the project at any time,

without having to give a reason and without any consequences.

I understand that I can withdraw my data from the study at any time.

I understand that any information recorded in the investigation will remain confidential and no information

that identifies me will be made publicly available.

I consent to being a participant in the project

I consent to being audio recorded as part of the project [delete which is not being used] Yes/ No

I

(PRINT NAME)

Hereby agree to take part in the above project

Signature of Participant:

Date

75

9. Bibliography

Aliouche, E. H., & Schlentrich (2011), U. A., Towards a Strategic Model of Global Franchise Expansion,

Journal of Retailing. 87 (3, 2011), pp. 345–365

BassemNasri. (2013). Cited difficulties facing retail franchising in the middle east. In:

BassemNasri Emergence of Local Retail Food Franchises in the Middle East: The Influence of

Foreign Franchises.Grenoble Management School. 55-56, 64.

Bellett, G. (2003). More Canadians finding future in franchising: Being your own boss is part of the

attraction. Vancouver Sun. July 14, E1.

Dianne H.B. Welsh, IlanAlon, Cecilia M. Falbe. (2006). An Examination of International Retail Franchising

in Emerging Markets. Journal of Small Business Management. 1 (1), 3-15.

FranChoice. History of Franchising. Available: http://www.franchoice.com/franchise-information-

guide/what-is-franchise/history-of-franchising. Last accessed 23rd September 2014.

Furey, T. (2007), Franchising in the Middle East, Dubai and Beyond. Franchising World. Jan2007, Vol. 39

Issue 1, p86-89, 3p

Hilary Strahota. (2007). Benjamin Franklin: Father of Franchising?.Available:

http://www.franchise.org/Franchise-News-Detail.aspx?id=35738. Last accessed 23rd September 2014.

IFA. (2000). An Introduction to Franchising. In: Barbara Beshel An Introduction to Franchising. USA: IFA.

2.

IHS Economics. (2015). Franchise Business Economic Outlook for 2015.Available:

http://emarket.franchise.org/FranchiseBizOutlook2015.pdf. Last accessed 4th Mar 2015.

Luthra, S. (2012). Determining India’s Economic Trajectory: The Role of Foreign Direct

Investment. Available: http://nbr.org/research/activity.aspx?id=204. Last accessed 23rd Feb 2015.

76

Marketing Department - Wharton University. (2009). Made for India: Succeeding in a Market Where

One Size Won’t Fit All. Available: http://knowledge.wharton.upenn.edu/article/made-for-india-

succeeding-in-a-market-where-one-size-wont-fit-all/. Last accessed 23rd Feb 2015.

Mary Ames. (2012). 5 Tips for Franchising in the UAE with N_K_D Pizza. Available:

http://shelter.ae/profiles/blogs/5-tips-for-franchising-in-the-uae-with-ian-ohan-n-k-d-pizza. Last

accessed 27th September, 2014.

Petersen, B., & Welch, L.S. (2000). International retailing operations: downstream entry and expansion

via franchising. International Business Review. 9 (4), 479-496.

Prabhakar, B. (2011). How KFC & McDonald's plan to target each other in India. Available:

http://articles.economictimes.indiatimes.com/2011-08-28/news/29935857_1_kafeccino-kfc-s-

krushers-colonel-sanders. Last accessed 23rd Feb 2015.

Preble, J. F., & Hoffman, R. C. (2006). Strategies for Business Format Franchisors to Expand into Global

Markets. Journal of Marketing Channels , 13 (3).

Sharma, ABahree, M Beckett, P. (2012). Rising Risk: Foreign Firms Sense Hostility in India. Available:

http://www.wsj.com/articles/SB10001424052702304177104577311441951841400. Last accessed

23rd Feb 2015.

Siddhartha, V.G. (2011). Everybody Said It Wouldn't Work. Available:

http://forbesindia.com/article/leaderhip-awards/vg-siddhartha-everybody-said-it-wouldnt-

work/29552/2. Last accessed 23rd Feb 2015.

Welsh, D. H., & Raven, P. (2006). Family Business in the Middle East: An Exploratory Study of Retail

Management in Kuwait and Lebanon. Family Business Review , 19 (1), 29, 20 pgs.

Welsh, D. H., Alon, I., & Falbe, C. M. (2006). An examination of international retail franchising in

emerging markets. Journal of Small Business Management, 44 (1), 130-149.

77

Welsh, D., Desplaces, D., & Davis, A. E. (2011). A Comparison of Retail Franchises, Independent

Businesses, and Purchased Existing Independent Business Startups: Lessons from the Kauffman Firm

Survey. Journal of Marketing Channe , 18, 3-18

Young, J. (2001). Retailers opt for a market full of eastern promise. Retail Week, 31 August , p. 14.