Reem Al Bawadi Restaurant & Cafe, a favourite spot for Dubai’s shisha smokers, will tap a franchise model to help it meet its target of opening an additional eight new outlets over the next two years.
The US$17.6 million international expansion plan will add to its five branches in the UAE and one in Jeddah, Saudi Arabia. Another restaurant in Jeddah and new outlets for Bahrain and Al Ain are in the works. The group serves more than 100,000 customers a month across the region, it said.
“Our brand has evolved over the last decade and now we are ready to offer interested parties the opportunity to share the success of our lovemark brand,” said Ayman Abdel Jaber, the chain’s chief executive.
“We see a huge potential for expansion in the coming two years and already have between six to eight international openings planned. We are aiming to target a mix of new markets and to fill in market gaps where opportunities arise. We have had a lot of interest from Malaysia, Spain and the UK, so we are looking to be a global brand.”
A typical Reem Al Bawadi restaurant of about 8,000 square feet will need an investment of $2.2m, the company said. It estimates four to six months to begin operating after a deal is agreed. A franchisee will pay an annual royalty of 6 per cent plus 2 per cent marketing costs.
The first Reem Al Bawadi opened in Dubai in 2001.
“We have seen a lot of concepts coming into the UAE but not so many home-grown businesses moving out,” said Matthew Jay, an associate director at CBRE.
“The start-up costs are significant as the franchisee will likely be paying for the lease liabilities and the fit-out costs. Of course with franchises you can harm the reputation of the brand so you have to make sure you pick the right people to run one of your franchises.”
ascott@thenational.ae
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