Just Falafel announced an ambitious one-year plan earlier this year and confirmed it would open one store a week.
This month, the food chain entered Qatar and Lebanon, and now the restaurant group based in Dubai has 25 stores in the region, including in the UAE, Oman and Jordan. Here, Fadi Malas, the chief executive of Just Falafel, talks about the expansion plans.
What model will the new restaurants operate on?
We only have franchises. That is all we do. We opened our first restaurant in Abu Dhabi in 2007 and started franchising in the first quarter of last year. Soon after, we sold the store to a partner franchise.
Why is franchising more attractive to you than proprietorship?
Owning the shop and franchising it are two different models with different infrastructure. We want to focus on the franchise model because otherwise we will not be able to grow at this rate. We cannot recruit fast enough.
Over the past few months, we have over 2,500 requests from 73 countries all over the world, including the United States, Europe, Australia, Canada and India to open franchise stores there.
Before the end of the year, we will open in London and Saudi Arabia. We are already constructing stores in 16 locations, including the UAE, Qatar, Oman and Jordan. We will open in Mall of the Emirates in Dubai this month and a couple of weeks ago we opened in Dubai Festival City. And we are continuously trying to secure new locations.
Why this ambitious expansion? Does it have anything to do with your plans to go public?
No, we want to capture as many clients as we can, we do not want them to travel [to the next Just Falafel store] and want to be available to them. And people want us as we are the largest roll-out story.
How much does it cost to set up a franchise?
A franchise buys the right to use the brand name from us for Dh60,000 [US$16,335] and set up a store. The expenses can vary between Dh500,000 and Dh1 million. We train the cooks and the staff and help the franchise to adapt the concept to the local market.
How do you tackle local competition as there are many "mom-and-pop" falafel outlets in the Middle East?
We are not competing with the traditional falafel stores. Our sales in traditional falafel sandwich represents no more than 10 per cent of the total turnover. The rest comes from sales in burgers and international sandwich [variants] such as Italian, Indian and Japanese, among others. In principle, no, we are not considering localising the menu at this stage. This is a food category we have innovated in and in the UAE, which is an international market with people from over 200 [countries], ... it seems to be working quite well.
