Franchising (from the French for honesty or freedom) is a method of doing business wherein a "franchisor" authorizes proven methods of doing business to a "franchisee" for a fee and a percentage of sales or profits. In the future the Dubai economy will more likely be filled by innovative and creative franchises which seek to capitalize on their market lead and intellectual property advantage. Franchises fill a market need and therefore, are the fastest growing way of doing business. Dubai franchise market has witnessed supremacy of few big retail conglomerates having multi brands in their portfolio and pre-dominantly the Master Franchisee arrangements but now the trend for small franchisees and sub-franchising is picking up. Dubai has a pro-business environment , whose investor-friendly policies attest to if one considers its infrastructure, corporate taxes, transfer of profits to home countries, entity ownership and availability of large pool of human resources. Businesses located in the multiple free zones enjoy tax exemption. The franchise sector in Dubai gets generous support from the government. The state is promoting the franchise sector to induce growth and development of the small and medium size businesses. Government backed Mohammed Bin Rashid Establishment for Young Business Leaders provides business training to entrepreneurs and also encourages women entrepreneurs. Further, the government established the UAE Franchise Association in 2004. The Dubai Islamic Bank (DIB) has a program for aid of young UAE citizens under which it extends to them for buying franchise business. Setting up this project need the following;
·
Business plan business, plan that includes your business
overview, competitor review, market trend in the particular service, your core
competency, your financial projections, marketing and distribution plans and
your funding alternatives.
·
Franchise Arrangement, an arrangement whereby as a
franchisor you license the franchisee, in exchange for a fee, to exploit the
system developed by you if acting in the capacity of a franchisor. Generally a
package including the intellectual property rights, trade mark logos, patents
or designs, trade-secrets and Copy-righted protect your IP assets by Offshore
Company and register in UAE Ministry of economic. Register your franchise
agreement before a UAE court. You need a reputable Firm to complete this
project.
Dubai remains the preferred base for franchised operations
in the region, given its tax status, the comparative stability of its legal and
regulatory systems and it openness to foreign investment, though Most countries
in the Middle East region do not have franchise- specific legislation
The franchisee market is dominated by a small number of
players who take multiple Brands franchise known as Franchise Conglomerates
,with some having as many as 50-55 brands in their portfolio. Middle East's
strategic location has a key role in expanding any business around the world.
Franchisors seeking new markets favor the Middle East as a franchising
destination as it assures easy accessibility and communication with the
surrounding areas.
The most moderate estimate of the franchise industry in the
Middle East and North Africa put it at $ 30 billion today. It also puts the
annual growth of Middle East franchising sector at 27 per cent.
This frantic pace provides huge opportunities for
franchisors to bring their brands to the region, as this trend is set to
continue for years to come, powered by massive consumption appetite, economic
growth and record oil prices. In the last decade many Middle Eastern businesses
proved to be very successful in the rest of the world with their efficient
style, cost management and competitive distinguished products, especially in
the retail, food and catering sectors.
Successful franchises in Dubai. There are many successful
franchises in Dubai of which prominent examples include:
Heritage for Henna - Beauty Franchise
Heritage for Henna started in Jumeirah Beach Hotel, Dubai.
It was a huge success with foreign visitors and confirmed its owner’s belief
that henna decoration has a massive market outside of this region.
To maintain quality, Heritage for Henna sets up its own
farms in carefully selected regions, where top quality henna shrubs are
cultivated. In addition, considerable investment is made to select and train
the most talented henna artists. Heritage for Henna provides a wide variety of
drawings with traditional, classical, contemporary and modern designs. Unlike
other projects that required large space and high rent, setting up a henna
salon required only the minimum of 4 square meters.
Heritage for Henna provides its franchise partners with a
full range of support services that will enable them to manage their projects
with a high level of efficiency and profitability.
Furthermore, it offers assistance with the location
selection, rental negotiations and installation of decor. At the same time,
staff will be selected and trained to ensure that they meet "Heritage for
Henna's" high creative and professional standards.
Foot Solutions
Health & Wellness Franchise
- This franchise provides foot care solutions and use
high-tech computer foot scanning equipment to produce a complete line of custom
shoe inserts and orthotics.
Malridge Master Distributor - Photographic Engraving Franchise
- Malridge has developed a unique process for the
customized engraving of photographs and graphics on glass surface, while,
producing the highest finish and definition. They do photo engraving and
personalized engraving on all types of glassware, from crystal awards and
trophies to tableware.
Apart from the regulars like McDonalds, Burger King and
KFC, the 3 biggest growing franchise brands internationally, there are many new
casual dining, fast food franchising ventures which seem to be showing interest
in the Dubai market.
Egypt's Integrated Food Franchising is promoting its Pizza
Conez product, a revolutionary new take on take away. The product is a pizza
cone similar to an ice cream cone and it takes five minutes to prepare. The
unique selling proposition of this product is that it is portable and has
mobility. The fast food products from the US, for example, Pizza Hut and
Dominoes have entered the Dubai market but Pizza Conez brand is about authentic
Italian ingredients.
London Dairy
- Is another food brand looking to increase its presence in
the market. London Dairy is a complete Dessert Destination that offers the
entire exclusive range of London Dairy Premium Ice Creams, dessert sundaes,
pastries, cakes and single origin coffee.
Subway
- Subway franchise business is pushing the fast food market
to continue the globalization of its company, and there are no plans on
stopping in Dubai, with multiple stores opening in Kuwait, Saudi Arabia, and
Qatar.
There are 60 franchises already present throughout Dubai,
and this means tough competition for prospective franchisees in Dubai. Emerging
markets are increasingly more important as opportunities for retail franchising
in the West diminish because of market saturation and increased competition.
Industries in which franchising is mature, offer fewer profits. For example,
fast food, retailing, hotels and other service based industries. Emerging
markets are unsaturated, poised for growth and there is increased demand for
products and services that embody international standards and quality.
There are thousands of different business franchises, and
there will be more than one and perhaps many in your chosen business area. Once
you have made the decision to buy a franchise business it is difficult to turn
back. A wrong decision takes a few seconds to make, and for some, a lifetime to
put right. So do your research. Look at the alternatives. Ask existing
franchisees. Ask customers. Ask bank managers. Read the franchise trade
magazines, newspapers, websites. Attend franchising exhibitions. Seek the
advice and opinions of friends or Business Consultant. Do some local market
research to gauge demand for the products and services, to test the reputation
of the franchising companies, and to test their claims about pricing and any
other relevant business claims or information you've been given. Become an
expert before you sign the papers - don't wait to learn about the 'unknowns'
after signing the contract and parting with your cash.
These days information is easy to find - don't be shy -
look for it - ask and satisfy all of your concerns before you make your
decision.
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