Unlocking The Middle East

The information gleaned during a journey abroad shows a fruitful future in the Middle East.

By Eric Johnson, CFE

When the opportunity presented itself to travel to Dubai in November to attend the Global Restaurant Leadership Conference (GRLC), I didn’t expect how much I would learn over a short trip, and much of it well beyond the scope of the conference.

I embarked on the journey knowing I was to look for a Marhaba agent on arrival in Dubai. Deplaning, I saw people meeting their Marhaba agents. There was not one waiting to greet me, and at 2 a.m.; this was exceedingly disconcerting looking at the massive immigration lines. Quickly correcting this with Marhaba customer service I learned my hotel did not finalize the clearing arrangements, and by just asking I received the service and was cleared outside the airport through a priority line. A relief, to say the least, though I know now to always confirm these service arrangements.

This was the most inconsequential thing I learned on this trip. I was meeting a delegation of Iraqi entrepreneurs at the conference who had been upskilling their knowledge of U.S. franchising dynamics and systems. I had met a number of these entrepreneurs on their previous trips to the U.S., one of which shared discouraging news they had received on a brand system in which they wanted to invest and bring to Iraq. The franchisor had relayed that Iraq didn’t fit into their current development plans. Leaving the dialogue here would have left to chance any future exchange.

Naturally inquisitive, I asked more questions about how the communications came about. The entrepreneur had met the brand at a major tradeshow in New York and spoke briefly through an interpreter and sent several email follow-ups.

Knowing my contact did not speak English, and how quickly conversations transpire at tradeshows, I explored further this contact’s business operations and alignment in the Iraqi fast casual food segment. The company had aligned a rather impressive and growing vertical system with food production, delivery fleet, real estate, and their own multi-unit concept. I also learned they had not conveyed this full story, and reached out to set a meeting between the entrepreneur and the franchisor.

All franchisors have development plans, and expansion deviations require a compelling reason. Sitting down with an interpreter, myself playing middleman, we were able to share enough information on both sides to warrant further review by the franchisor’s executive team. The Iraqi market, particularly in Baghdad, is experiencing a solidly developing franchising sector, encountering growth like the Saudi Arabian example, and with security and economics about which U.S. brands may be unaware. We salvaged in that meeting both likely interest in the market and a potential partner. A decision trajectory may remain unclear, albeit it with enough information shared to maintain an ongoing dialogue.

Many people don’t know about Iraq’s growing franchise sector and how world-class shopping malls constructed in recent years have changed dining and entertaining culture of Iraqis. Malls are safe zones with security, enabling brands and citizens to interact and exist profitably. International hotel chains are now constructing and operating, and a new five-star hotel is planned in Baghdad in the international zone. Iraq in general is one of the most populous countries in the Middle East region with 38 million people and a growing tourism trade in the southern part of the country. These are only some of the reasons why expanding franchises should consider Iraq.

Asking the Right Questions

The businesses I met at GRLC in Dubai have developed their successes and brands through ingenuity, acumen and perseverance. By asking for information, one learns more about what unites our shared franchising interests. The Iraqi and U.S. governments are supportive of franchising in this region. There are many challenges that must be addressed toward ongoing success, such as knowing how to adapt core menus, pricing appropriately to consumer tastes and following testing standards on imported proprietary products into this region.

Addressing these issues at the start will prevent challenging conversations later. Reaching out to multipliers like my organization can help franchisors tap into resources to appropriately consider under-valued markets like Iraq. Beyond business, as a bonus, I learned one of the Iraqis and I share a common interest in vintage racing cars and other antiquities. I also learned that in the UAE, if you forget a notebook or other personal item, chances are many hours later you will return to find it unmoved and
awaiting retrieval.

At the end of my experience in Dubai at GRLC, I’ve learned enough to inquire more on life, travel and business in the Middle East. I’ve also learned that asking a different set of questions can bring greater clarity. International business is full of opportunity and excitement along with hard work, advanced preparation, and a lot of potential for misinformation. What have you missed in your recent communications or market development activities? Chances are you may have missed something in the process.

Eric Johnson, CFE, serves as Global Team Leader for Franchise Programs for the U.S. Export Assistance Center in Atlanta, Ga. He has been a part of the international trade and investment promotion arena for 20 years and has consulted multi-unit chain and beverage organizations on menu conceptualization and wine programs.