Appetite for UAE food brands an acquired taste overseas
A second Dubai food franchise has shut its doors in London, renewing questions over how home-grown brands are being digested overseas.
The first London branch of The Noodle House, the flagship restaurant brand of Dubai’s Jumeirah Group, opened last year to great fanfare, in what was supposed to be the first of dozens of franchised outlets in the UK. But the South East Asian-style restaurant, located on the city’s Shaftesbury Avenue, quietly closed down on June 1 after just a year of trading.
The Noodle House closure follows this year’s decision by the Dubai-based JF Street Food, known previously as Just Falafel, to close its four London franchises and dramatically scale back its international ambitions, which had included plans for 200 UK outlets.
Restaurant chains in the UAE may be hungry for overseas expansion, but Londoners don’t appear to share their appetite.
Russell Scott, the managing director of Jumeirah Restaurant Group Dubai, confirmed that the “franchise agreement relating to the UK market has ended”, but added that Britain remained a key market for the brand.
“We are looking for new partners,” he said. “Jumeirah Restaurant Group Dubai regularly reviews its international franchise business for The Noodle House to ensure we deliver the quality and standards our customers love. We are finalising our growth strategy for the next five years, which includes the UK and other European markets.”
Experts in the food and beverage industry say something is wrong with UAE restaurant brands’ overseas moves – with one saying the franchise model itself is flawed.
Johnny Tomazos, the chief executive of FoodFund International in Dubai that owns restaurant chains including Eat Greek, Meat Co and Ribs and Rumps, says all his future restaurants will be company-owned.
“We don’t believe in franchising,” he said. “Sometimes you can go faster with franchising, and open up multiple units. But we believe that it jeopardises the quality of the service, of the product, and of the DNA of what you intended it to be.”
FoodFund recently opened a restaurant in the island of Mykonos in Greece. But the company retains full control over the management of all of its restaurants, to help ensure they are well tailored to the local market.
“We try to understand the market better than just going there with the cookie-cutter approach, saying ‘it’s going to work – it works in the UAE’. And I think that has been the problem with many UAE franchisers going [to the UK].”
Murad Alnasur, general manager of International Leisure Investment – a division of Lebanon’s Boubess Group that runs restaurants including La Piazza, Scoozi and Napoletana in the UAE – says poor market adaptation is the main reason some restaurant brands from the Emirates fail overseas.
“Just Falafel caters to the Middle Eastern community, and that’s probably why they failed. Their expansion plan called for 200 locations [in the UK], yet I don’t think the community … could have supported that,” he said. “Ninety-nine per cent of the reason why franchisees fail to execute a brand properly is because they cannot do the market adaptation of the brand correctly, or they could not identify who their core customer is.”
Mr Alnasur said issues such as regulation, the cost of construction and the availability of staff could prove challenging in entering the UK market.
His company is considering franchising brands in neighbouring GCC countries, but not as far afield as the UK. “For us to venture into the UK would take a huge process of preparing ourselves,” said Mr Alnasur.
That is not a deterrent for Rafih Filli, founder and chief executive of the Filli Cafe chain in Dubai, which serves tea, burgers and sandwiches.
Mr Filli said he was planning to open 1,000 franchised stores over the next 10 years, including 300 in the UK. To test the water, Filli Cafe is planning a self-managed restaurant in the upmarket London district of Knightsbridge. It is set to open in about six months.
Having a unique product that appeals to the British made this market a prime opportunity, said Mr Filli. “This is the best market for the franchise model,” he said of the UK.
Although sceptical of franchising, Mr Tomazos said FoodFund was looking at entering the UK market and managing its own outlets there. His company has taken an 8,000 square feet location in Old Jewry Street, in London’s main financial district, which it plans to subdivide and operate as two restaurants. One will be an Eat Greek, which has a more contemporary take on Greek cuisine, and the other a female-friendly steak house – two offerings that Mr Tomazos said were missing in the City of London district.
“It will be something novel, something new, and something a little bit risky and edgy,” he said. “And it might work, or it might not.”
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Published: August 19, 2015 04:00 AM