Seven Lessons Learned From Operating A Franchise In The UAE With the franchise sector in UAE expected to grow by 25%-30% annually, take a look at what you need to know to run a successful franchise.

By Georges Calas

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The franchise model has been a popular choice for starting and running businesses for multiple years, with major global brands using this model to establish their presence worldwide. And in the dynamic and ever-expanding business landscape of the UAE, operating a franchise can be a challenging -yet rewarding- venture.

The UAE is a vibrant business hub that has opened its doors to international business owners, which include local and international franchises. Today, there are several different types of franchises operating in the region. According to a Zipdo report published in June 2023, the franchise sector in UAE is expected to grow by 25%-30% annually. Meanwhile, the key industries for franchising in the UAE, as per an article on Gorodissky, are hotels and leisure, restaurants and cafes, retail stores, medical services and clinics, and information technology (IT) and online services.

Running a successful franchise requires skill, determination, and a strong business mind. Adding on to this, there are several key principles that play a crucial role in ensuring the success of a franchise business in not only the UAE market, but any new market in general. As the CEO of Lifesize Plans Dubai, here are seven lessons I have learned from my experience in operating a franchise in the UAE:

1. KNOW YOUR MARKET As an individual introducing a new franchise business in a new market, it is important to have an awareness of the market you're entering. The first step is to conduct a market study before beginning any new business. This will help you understand the demand, competition, and potential of your target market, how many similar businesses are in the market, etc. While it's not necessary to have multiple years of experience as a business person within the industry of choice, being aware of the market landscape is essential to having a successful franchise business. Businesses might not always succeed when duplicated in new markets, which is why having a strong marketing strategy, and analyzing the market and the current trends closely, will ensure a seamless experience. Also, make sure the franchise business that you invest in is marketable and viable before diving in headfirst. Ask yourself questions, and discover if there is a need for the service or product you are offering, how long it will last, whether it is already ongoing and existing in the market, etc., and also examine the growth of the product/service you will be selling.

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Creating strong business relationships and understanding the local market is key, says Georges Calas, CEO of Lifesize Plans Dubai.

2. FORGE PARTNERSHIPS AND RELATIONSHIPS For those looking to conduct business in a market as competitive as the UAE, it is highly beneficial to forge strong business relationships, especially if you are planning to enter into a new business partnership in order to kickstart a business. It is also important to choose a business partner who has either already run another successful franchise, or has a record of successful franchises/businesses, because choosing the right partner can elevate or ruin your business. Entering into strong partnerships and building rock solid relationships with key players and peers in the same industry as you not only makes operations smoother, but also brings a wealth of knowledge, and it will open doors to new opportunities that will help grow your business, and take it to new heights. From my personal experience, partnering with an Emirati national and a Saudi national to launch our franchise business in the UAE market has been extremely advantageous and enlightening, as they are both highly knowledgeable about the ins and outs of the industry. Their high level of expertise and understanding of the industry has been invaluable.

3. EMPLOY A PROFESSIONAL STAFF AND SALES FORCE Operating a franchise business in any market demands a committed and skilled team. Given that the customer service and professionalism is highly valued in all markets, and especially so in the UAE, the importance of customer-centric staff and a strong sales force cannot be overstated. A well-trained team can impact the success of the whole franchise, which is why it is essential to invest in recruitment processes and effective training to ensure you have a team that is aligned to your business, eager to grow, and committed to achieving the same business goals. It is also important to train your team on the brand that you are franchising so that they are familiar with the brand concept, objectives, etc. If it is an option, I would also suggest getting the team to visit an already operating franchise in the market to get them on board with the brand.

4. UNDERSTAND THE RIGHT PRICE POINTS TO ACCEPT FROM POTENTIAL CLIENTS It is crucial to spend time researching the market to determine what is the optimal price point that target customers should be paying. This should be a price that not only covers the costs, but also the value of your products and services; as such, it is essential to strike a balance to ensure that your franchise remains competitive, while maintaining profitability.

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5. KNOW YOUR UNIQUE SELLING PROPOSITIONS (USPs) AND YOUR COMPETITION Identifying and emphasizing your USPs is fundamental in order to stand out in the UAE market. You need to have a clear idea of what sets you apart from the competition in the market, and that will be your strong point moving forward to help you crave out a niche for your brand. Always be alert about ongoing competition, and learn how to analyze the strategies of these competitors so that you can adapt your approach according to what would work best for your business.

6. ALWAYS BE PREPARED FOR CHALLENGES As impressive as the UAE business ecosystem may be, operating a franchise in the UAE -and bringing a franchise business into a new market- presents a fair share of challenges for those looking to launch and build businesses here. Learn how to adapt in a fast-paced and challenging environment that is continuously evolving. Navigating the legal and regulatory framework can be a daunting task, but always stay informed and up to date about all the legal requirements related to operating a franchise in a new market, and thus try to navigate any obstacles that may arise. Rules pertaining to specific business frameworks often undergo frequent changes; so, make sure extensive research is carried out to ensure compliance with current regulations.

7. PRIORITIZE THE ART OF BUDGETING Financial management is the key to operating a successful franchise business in any market as it is with many other aspects in the business world. Create a comprehensive and clear budget that encompasses all the costs that are related to the business, from initial set-up costs to expenses that will be ongoing in the later stage. Always make sure to be prepared and make room for unexpected expenses due to challenges and fluctuations in the market.

Operating a franchise business in the UAE or bringing a franchise business into a new market in general is a multifaceted endeavor that requires a strategic approach and a thorough understanding of the ins and outs of the market you are planning to operate in. By keeping the above points in mind, you can be one step ahead in not only navigating the process of operating a franchise business in the UAE, but also for thriving in any new market with a competitive business landscape.

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Georges Calas

CEO, Lifesize Plans Dubai.

Georges Calas is the CEO of Lifesize Plans Dubai.

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