BinHendi to franchise Japengo Cafe around the Gulf

BinHendi Enterprises expects to sign at least 10 franchises for its home-grown Japengo Cafe chain of restaurants in neighbouring GCC countries by next year, its president said yesterday. Mohi-Din bin Hendi, the president of the Dubai-based retail group, which has a portfolio of more than 60 brands and 100 stores across the country, said the company would be signing up at least 10 franchises by the end of the year. "We'll start with our neighbouring countries, then we'll go out. The Far East is on our agenda and the US is on our agenda," Mr bin Hendi said. The group would keep its focus on the GCC region until western economies improved, he said.

BinHendi began the process in the middle of last year, making it one of the few UAE-based retailers to start franchising out its own brands. Usually, most local retail groups bring franchises of successful retail chains from the West, such as Starbucks and Hugo Boss, into the UAE. "Retail is something quite new in the region," said Laurent-Patrick Gally, a retail analyst with Shuaa Capital. "Although we have had shopping malls for several years, the concept of organised retail, and developing your own brand, is quite new."

BinHendi launched Japengo Cafe, which offers a mix of Chinese, Japanese, Lebanese and Italian foods, in the late 1990s. The chain has since grown to nine outlets in the UAE and one in India. Company executives decided to look into franchising the concept after receiving calls in recent years from investors, Mr bin Hendi said. Mr Gally said Japengo's menu, which features a blend of cultures, made it an easy sell in many markets. Franchising is an ideal way to expand business during tough economic times because of the reduced investment required by those taking on a franchise, and lower liability if sales sag, he added.

"You don't incur the full cost, and also don't incur the full risk," Mr Gally said. "In times when there is an economic slowdown, though food is doing OK, franchising gives them the opportunity to have their name out there." BinHendi also aims to franchise some of its other food concepts, including Cafe Havana and the Asian restaurant China Times, Mr bin Hendi said. In May, the company closed BinHendi Avenue, its two-storey wing of 26 retail stores in Deira City Centre. Mr bin Hendi said the group decided on the closure because its affluent customers had begun shopping in more upmarket malls.