Secret life of a fast food operation

Albaik operates what is believed to be the largest fast food restaurant in the world. The chief executive of chain explains why the location of two of its outlets are kept a secret.

Albaik restaurant in Mecca, Saudi Arabia during the Haj. Photo Courtesy Albaik
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Albaik is so popular that it has registered its trade name in 80 countries and is considered to have the busiest restaurant in the world. But the success of the fried chicken chain has led it to hiding outlets in undisclosed areas of the Middle East to deter copycats. Gillian Duncan reports

If you have never performed the Haj or visited the western region of Saudi Arabia, chances are you will not have heard of Albaik.

During the Haj, the fast-food chain that primarily specialises in fried chicken and shrimp, operates three special venues, one of which serves about 250,000 meals a day - more than any other single restaurant.

Founded in 1974, Albaik has some 40 outlets in Jeddah, as well as a number in Mecca and Medina, and it is expanding.

The company's food has become so popular that it has had to register its trade name in 80 countries to prevent copycats from setting up shop under the same name. And it has even had to open two restaurants in "undisclosed locations" to protect the brand.

Here, Rami Abu-Ghazaleh, the chief executive of Albaik Food Systems, explains why.

Q: During the Haj in Mina you operate three temporary restaurants, one of which is considered to serve more meals per day than anywhere else in the world. How does that work?

A: It's a crazy operation. We have more than 600 people working for Haj because we have three locations plus support services and security, so you have to think of bringing them to Mecca, finding housing for them, food, medical services. But the rewards are incredible. Although people work for 18-hour days they don't care because they are so proud to be serving the visitors. Emotionally, they work like you have never seen them work before, just because there is goodness in what they are doing. It is a non-profit operation, so we are able to serve it at very low prices for the Hajjis. You are talking about a huge meal of 12 pieces of nuggets for 12 Saudi riyals (Dh11).

Q: And the operation is not-for-profit?

A: That is critical because they know we're not in it for the business so it feels better for [the pilgrims].

Q: How do you serve so many people? How many employees do you have working at the big Mina restaurant?

A: We have 150 people.

Q: That does not seem very many given the number of meals served.

A: To avoid a stampede and any other issues, we worked with the Haj research centre where we developed a one-product restaurant. You have no choice. It is only chicken fillet nuggets.

Q: Are you are the only restaurant that does this?

A: [Yes] all the international chains shied away from it because it is not profitable. It's not worth it. For us, what happened, the history behind it, 14 or 15 years ago there was a major fire in Mina because of gas cylinders and so on. So the minister of the interior asked all the food chains to think about how they can serve the pilgrims. Everybody knew that it was a nightmare because there would be a very small space. We took it as a challenge.

Q: Did you have to construct a building to house the restaurant?

A: We're not allowed to build a building, per se. We created or developed a type of building that is dismantled [every year] and for the first 10 years, they gave us three weeks. They told us you can start construction [three weeks before the Haj] and then they told us this year we don't like the building here, change it round, move it 10 metres. Finally all the development in that area was done and we are able to sign a five-year contract with them to keep the building [in one place].

Q: How many meals do you sell throughout the five days of the Haj?

A: Over the five days in the three locations probably over 1 million meals.

Q: How do the Mina restaurants survive outside of Haj?

Q: We close down.

Q: So you just open five days a year?

A: Yes.

Q: And you think because of that your brand is known all over the world?

A: [Yes] it is registered in over 80 countries. We have franchise requests from Japan, to Brazil inclusive. People just love the brand. The thing is, fried chicken in general is not a particular taste of a certain country. Everybody loves fried chicken. So what you notice is people in Japan think it is Japanese. People in Indonesia [think it's Indonesian].

Q: Do you have restaurants here in the UAE?

A: We have a company set up and we are planning, one day, to start operations.

Q: When might that be?

A: If I reveal such information the competition will benefit but I can tell you that we have already identified locations. We have already bought real estate. We have a land for factory, a food-processing plant. We are starting to slowly set up but I cannot reveal dates.

Q: Can we say within a year?

A: Within the next three years.

Q: How many locations will you have here?

A: It really depends on demand but I don't think we will start with less than five stores every year.

Q: Will it be a franchise or will you own it?

A: That's a very good question because we look forward to franchising but in the Middle East, until today, there are no clear franchise laws that manage the relationship between franchiser and franchisee. I'm not sure how developed the UAE is for that. But definitely in Saudi Arabia … we don't have that.

Q: How many restaurants do you operate in total?

A: In Saudi we have 48 in the Western Region. Now we are starting to expand into the central and southern regions. And we have two locations outside of Saudi Arabia in undisclosed countries.

Q: Why is the company reluctant to say where the new outlets will be?

A: We had a lot of copycats, which were opening in different countries, so … in order to protect our trademarks we went and started operations in two countries for the sake of protecting the brand. We put them in undisclosed locations because they're not what we really want.

Q: So you don't use your trade name?

A: Oh yes we do, but they are hidden.

Q: Why hide them?

A: We had to go there for the trademark issues. You don't want to go in and affect the brand and people would be displeased. That would be the worst thing that you could do. They asked for us to use the brand, so we went in to undisclosed locations just for the brand and avoided affecting the expectations of customers. Later on [we will] go into that country big.

Q: Are they in the Middle East?

A: Oh yes, definitely.

Q: Near here?

A: Maybe, maybe not.

Q: Do you have any outlets outside Saudi Arabia apart from these two secret locations?

A: No.

Q: Is the plan to open restaurants in each of these 80 countries where you have registered the trademark Albaik?

A: What we do is we have identified all the countries that we foresee ourselves operating in the future, so whether it is next year or in 10 years definitely they are very important markets for us that we want to see Albaik expanding into.

Q: Where are these locations?

A: We are registered in the US, in Canada, the EU, UK, China, India, everywhere.

Q: What about Albaik's popularity in Saudi Arabia? How popular are you?

A: It's scary. On average, every location serves over 2 million customers a year. If you look at Twitter and how people talk about it they are so passionate about it and so proud about it that it puts a lot of responsibility on us to always go beyond their expectations. The relationship we built with customers is not a financial relationship. For example, there is free water. You don't have to buy a drink.

Q: Why did you introduce that?

A: Saudi Arabia is hot and we appreciate that if somebody is walking outside they would appreciate a cool drink. They don't have to pay for that, just to walk in, enjoy the drink and leave. What we have also is if someone wants extras: extra sauces, extra buns, extra whatever, we don't ask them to pay for it. We work with a totally different business model than the rest of the competition. At Albaik, food cost is how much it costs to buy the food, prepare the food and serve it.

Q: What do you mean?

A: For example, we kept prices the same for 25 years. [That] is never done anywhere around the world. And then in one year we had to increase the prices twice, by 1 riyal and another riyal. As soon as we saw the opportunity to reduce prices by a riyal we did. We took out one-page ads and we said: "Listen guys, food prices in the world have gone down, there's no need to take this riyal from you".