The Dubai-based chocolate brand Delice will soon be selling its sweets, dates and macaroons at Harrods in London.
It is among the latest home-grown retail brands that have taken the franchise route to expand outside the UAE, which poses maximum gains with little risk.
Delice will expand through franchises to Armenia’s capital, Yerevan, in the middle of this month, and then later to the Ritz Carlton in Bahrain. It is also in talks with a retail groups in Saudi Arabia and Baku, Azerbaijan to enter the countries.
The company owns three outlets in Dubai and has its production base in the emirate.
It costs between US$100,000 and $200,000 to buy the franchise rights, depending on the market size.
“When we go abroad it is new investment [that we get] in addition to international exposure, and the local market has limitations when it comes to consumer numbers,” said Jalel Ghayaza, the chief executive and founder of Delice.
Despite expanding its presence outside, it would continue to make its products in Dubai, he said.
“A market needs to consume 3,000 kilograms of sweets per month to start production there,” said the Tunisian, who has called the UAE home for 20 years. Mr Ghayaza founded the brand in 2004 with a loan of Dh100,000.
The company’s profits last year rose 7.5 per cent to touch Dh9.5 million. It also supplies hotels in the UAE and the OneOnly Royal Mirage resort in the Maldives.
Delice manufactures 3,500 kilograms of chocolates a month.
It is, however, in talks with partners in India to create a production facility exclusively catering to the local market. It costs about $10 million to buy the manufacturing rights and methods from Delice, Mr Ghayaza said.
In November, the Indian government halted shipments of packaged cheese and chocolates to the country over mislabelling issues. Under the country’s new food safety and standards regulation, it is no longer sufficient to paste information stickers on packaging created in other countries.
Despite the growth, Delice is going slow on the IPO route.
“The value of the brand will double by end of this year when we open the franchises,” Mr Ghayaza said.
Another Dubai brand, Just Falafel, has been weighing an IPO after its rapid expansion outside the UAE, also through franchises. It is present in 20 countries overseas and entered Australia last month.
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