By Scott Lehr, CFE, Senior Vice President, U.S. & International Development, International Franchise Association

We had arrived at our final destination of the U.S. Franchise Trade Mission to the Middle East – Doha, Qatar.  Ten days of planes, hotels, meetings, mall tours and hauling luggage but most importantly many, new relationships with prospective master franchisees, stronger connections with our Commercial Service friends and lasting memories with members and peers from the franchise delegation.

The group of Greenberry’s, Pollo Tropical, Tutor Doctor and Wing Zone pushed forward into Qatar. Hertz Rental joined for the morning sessions our first day in Doha but were heading out that afternoon.

The U.S. Commercial Service staff, Robert Dunn, Senior Commercial Officer, Mahmound Skhiri, Senior Commercial Specialist and Anissa Lahreche, Commercial Specialist met us at the airport and got us to the hotel to rest up for a packed day at the hotel filled with briefings and one-one meetings.  In the morning we were joined by Natalia Hernandez, Commercial Assistant and Golda Agnazata.

Michael Palmer from Patton Boggs led off the morning sessions with a legal update and “Doing Business in Qatar” briefing. Palmer confirmed that there is no specific franchise law in Qatar, only the need to register the Franchise trademark. He stressed that franchisors need to be in control of the trademarks, licenses and ownership of materials in the country. As in some other countries in the Middle East, he cautioned that the Franchise Agreement is sometimes registered as an exclusive agency which is not recommended and described the preferred practice which is a franchise licensing arrangement.

While discussing some of the challenges of the market, it was agreed that franchisors will have to deal with supply chain and approved supplier issues since many items especially for food franchisors will need to be imported.

The group then had the opportunity to hear from local franchisees that have been operating in the market for a number of years.  Mr. Vijay Arora, Operations Manager with Chili’s – Qatar, part of International Food Concepts Company has been operating in Qatar for 12 years and sees strong potential for growth as long as the population growth keeps up with the building in the area.  Mohamed Ekram, Brand Operations Manager of Popeyes which is also part of the International Food Concept Company is currently operating five Popeye’s in the area and has plans to develop up to 16 in the next few years.  He cautioned the franchisors to look for strong food experienced partners or face lots of problems in getting their concepts opened and operating.  He said that “kid friendly” and play area locations will drive sales and build loyal followings.

Finally Camille Aoun of the Al Jassim Group which operates Burger King Restaurants, Quiznos Sub Shops and other brands including hotels advised the franchise delegation to be cautious to find the right partner that is interested in operating profitable food businesses instead of locating a partner that invests in franchised businesses to have them in their portfolio as a badge of honor and prestige that may never open a significant number of locations.  He cautioned the group that they need to look for partners that can be in the market for the long term due to the growth of the retail real estate market that is outpacing the population growth creating more space than demand for product.

The final speaker before lunch was Garrett Grennan with Ernst & Young who talked with the group about tax implications for franchisors with operations in Qatar. He reported that franchise royalty is subject to withholding tax of 5 percent and that corporate income tax is 10 percent.  He also mentioned that although basic food products are not subject to customs tariff, processed foods are subject to a 5 percent tariff so franchisors need to work these figures into their calculations for the market.

The Commercial Service team had arranged for a press event that included more than a dozen media in Doha including The Peninsula, Qatar Tribune, Qatar News Agency, Doha News, Arabian Business and Qatar Today.  Members of the press fired questions at the delegation and everyone shared their stories on looking for partners for their brands in Qatar.

Lunch was hosted that afternoon by the American Chamber of Commerce of Qatar and represented by Robert Hager, Founding Chairman and Theresa Backus Dunn, Executive Director.

Once again, the group rolled into a full afternoon and evening of one-one meetings that had been previously set and prequalified by the Commercial Service staff in Doha making for a full and productive day.

Day two in Doha began with a retail tour of a number of malls in Doha and massive new community projects.  The delegation enjoyed a great breakfast at the new Tim Horton’s Coffee Shop in Ezdan Mall followed by a tour of the mall which included a number of American brands open or in the process of being built including KFC, Papa Johns, Fuddruckers, Pinkberry, Robecks, Subway and Johnny Rockets.

The group also toured two mixed use communities, Katara and The Pearl, a community 20 kilometers north of downtown Doha. The Pearl Qatar is a mixed-use development which includes beachfront villas, town homes, luxury apartments, penthouses, five-star hotels, marinas, and upscale retail and restaurants all situated on a man-made island encompassing 985 acres.  This project complete with all the top high end brands including Ferrari, Maserati and Rolls Royce dealers and retail brands to match will certainly be on the list of places to visit while in Qatar.

The last official function of the U.S. Franchise Trade Mission to the Middle East ended with a lunch at the St. Regis looking out at the Pearl-Qatar.  The lunch was hosted by the U.S. Ambassador of Qatar, Susan Ziadeh and the Qatari Businessmen Association and represented by Hussain Ebrhim Alfardan, Deputy Chairman of the Board who is also Chairman of the Alfardan Group, which has businesses in jewelry, real estate and the automotive areas.  Also in attendance was Hamad Bin Faisal Bin Thani Al Thani, Chairman of Al Khaliji one of Qatar’s leading banks.

As the trade mission participants said their goodbye’s after 11 days together, everyone was optimistic that they would be back soon hopefully to sign deals in a number of the countries they had visited over the past week and a half.

By Scott Lehr, CFE, Senior Vice President, U.S. & International Development, International Franchise Association

Arriving by plane to Amman, the first thing you notice is the immaculate new airport.  Modern, clean and efficient would best describe the scene as the U.S. Franchise delegation maneuvered through immigration and picked up their bags. The companies participating in Jordan included Hertz Equipment Rental, Johnny Rockets, Pollo Tropical, Tutor Doctor and Wing Zone.  The group gathered on Saturday evening with Sandy Owens, Commercial Counselor and Muna Farkouh, Senior Commercial Specialist for the U.S. Commercial Service in Amman receive their schedules and prepare for the following day. Almost 40 one-on-one appointments were booked for the participating franchise companies for the one and a half days that we would be here in Amman.

Sunday morning, the U.S. Commercial Service and the American Chamber of Commerce in Jordan hosted a breakfast for the delegation which included a visit by the U.S. Ambassador of Jordan, Stuart Jones.  Mohammed S. Bataineh, Chairman of The American Chamber was also in attendance.  The group met and discussed the opportunities for U.S. Brands in Jordan and connections to other markets in the region.

The delegation then heard from Nancy Dababneh of International Business Legal Associates on the current laws affecting franchising in Jordan.  She reported that there is no specific franchise law in Jordan and that Franchise Agreements are governed by civil law. She also stressed the importance of spelling out in the Franchise Agreement the specific relationship between the franchisor and franchisee.  She mentioned that there have been cases where the government considered the franchise relationship similar to a commercial agent/agency relationship and that the agreement should be viewed as an intellectual property license instead. The delegation then moved into their individual meetings which would be the focus for most of the day in Amman.

That evening, the group gathered at the Sufra Restaurant located in an old mansion on Rainbow Street in Amman for local Middle Eastern food and good conversation with new friends from the American Chamber in Jordan & colleagues from the mission.  It was fascinating to learn about the Jordanian market from some of Jordan’s most prominent business leaders.

Day 2 in Amman included breakfast at a local restaurant and retail tours of two malls in Amman including Taj Mall and CityMall which showcased some of the American Brands that are already in Jordan including McDonald’s KFC, Quiznos, Hardees, Burger King, Carvel and Cinnabon.

Next and last stop on the U.S. Franchise Trade Mission to the Middle East is Doha, Qatar!

By Scott Lehr, CFE, Senior Vice President, U.S. & International Development, International Franchise Association

Libya was not even on the list of countries that the U.S. Franchise Trade Mission to the Middle East was stopping at but Ann Bacher, Regional Counselor of Commercial Affairs for Morocco, Algeria, Libya, Egypt, Jordon and Lebanon of the U.S. Commercial Service had connections. Ann’s connections and interest in advancing Libya led Behzed Daniel Ferdows of Mammut Technocrete to Cairo to meet with international franchise company executives participating in the trade mission.

Daniel’s businesses, based in Dubai, UAE are focused in the building and construction industries, primarily steel and concrete.  He had a particular interest in one company participating in the trade mission but had other interests that included food and perhaps education. Daniel’s connection with Libya stems from his wife who is from Tripoli. Libya is currently undergoing political reconstruction, after the civil war and NATO led military invasion in 2011 and the fall of the Gaddafi regime.

As Daniel said “We want to be involved in the rebuilding of the country and they need everything, food and restaurants, education, construction and equipment, you name it…there is opportunity for those that get in early”.  Daniel and his sister in law will be meeting with a number of the franchisors from the trade mission while in Cairo and may attend the International Franchise Expo in New York, NY in June to meet with other franchisors willing to step into the market.

For now, there are only a few U.S. Brands in Libya, which include Cinnabon which is reported to be doing very well.  Johnny Rockets is also there but the first location is not open yet. We will see what the future brings for U.S. Franchise Brands in Libya.

By Scott Lehr, CFE, Senior Vice President, U.S. & International Development, International Franchise Association

The US Franchise Trade Mission to the Middle East hit its 3^rd stop today in Cairo Egypt and just in time for the opening of the 2013 MIFE – Middle East International Franchise Exhibition.

The mission picked up two additional participants that were not with the group in UAE – Johnny Rocket’s represented by Steve Devine and Wing Zone represented by Hair Parra.

The delegation participants were all welcomed at the opening of the trade show with a reception that included Mr. Hatem Saleh, the Minister of Industry and Trade; Mr. Tarek Tawfik, Chairman of the Egyptian Franchise Development Association and Ghada Fathi Waly, Managing Director of the Social Fund for Development who participated in cutting the ribbon to open the show.

Several U.S. Brands and their Master Franchisee were present and exhibiting at the show including Gold’s Gym’s Master for Egypt; Maui Wowi’s master franchisee for Egypt, Emad Fahim; and Papa John’s Pizza Master Franchisee for Egypt, represented by Sharif Galal.  Sharif commented that they currently have 14 locations open and operating with plans to have more than 25 within the next few years.  Maui Wowi’s Master Franchisee Emad Fahim reported that he has not yet opened their first location but has plans to be open within the year and is actively seeking local franchisees for the brand.

The group then sat down for another full day of one-on-one visits with prequalified candidates from the greater Cairo area. The Commercial Service team then brought the delegation to a wonderful dinner cruise on the Nile to complete the evening.

Day 5 of the mission began with a tour of a few new retail projects in the suburbs of New Cairo including Cairo Festival City which is owned by Al-Futtaim out of the UAE.  This project spanning over 700 acres is a mixed use urban community complete with shopping, dining, entertainment, schools, hotels and residential villas and apartments.  Franchise brands already booked into the community include IKEA, Toys r Us, Kidzania, The Little Gym, KFC, Pizza Hut, Burger King and The Cheesecake Factory. With Egypt’s GDP growth now hovering around 1.2% down from the pre-revolution growth of 5.6%, it seems that will be some time before all the buildings are filled however it is a good time to be securing space for brands that want to be in the market.

The evening brought a distinguished dinner bringing together VIP’s from the Egyptian Franchise Development Association, the Social Fund for Development, the U.S. Commercial Service and of course the Franchise Delegation.

By Scott Lehr, CFE, Senior Vice President, U.S. & International Development, International Franchise Association

The International Franchise Association, Franchise Times and the U.S. Commercial Service kicked off the first leg of the U.S. Franchise Trade Mission to the Middle East last week in Abu Dhabi, UAE.  The trade mission will include stops in Abu Dhabi and Dubai, UAE; Cairo, Egypt; Amman, Jordan and Doha, Qatar over the next 11 days.

Trade mission participants include Greenberry’s Coffee Company represented by Robert Shaw; Hertz Equipment Rental  represented by Brad Siniscalchi and Matt Ladd; Johnny Rockets represented by Steven Devine; Pollo Tropical represented by Marc Mushkin; Tutor Doctor represented by Rogelio Martinez and Wing Zone represented by Hair Parra.  “We are pleased to be able to work with such quality franchise brands and connect them with potential candidates here in the Middle East” said Fredericks, director at the US Commercial Service.  Editor with Franchise Times and the co-sponsor of the Trade Mission Nancy Weingartner is accompanying the group also and has responsibility for promoting the trade mission both before and after and produces the mission booklet which presents the franchise companies and is used as a marketing piece to leave with candidates at each stop.

U.S. Ambassador to UAE Mr. Corbin described the vibrancy of the economy of the UAE and strong outlook for continued business success for U.S. companies and in particular the interest and demand for U.S. Franchise Brands. The franchise executives then quickly took their seats to begin a long day of one on one meetings at the Chamber with master and regional franchise prospects from the greater Abu Dhabi area.  For more than seven hours, the international franchise executives met with potential partners.  Marc Mushkin of Pollo Tropical described the day as a full on “speed dating” marathon which is a very effective way to meet the right candidates for his brand.

Division Manager of Franchise Operations for Hertz Equipment Rental, Brad Siniscalchi and his colleague Matt Ladd, General Manager of Middle East & North Africa were also pleased with their first full day of appointments.  “We met some excellent candidates today and will just have to work through the process with them to see how things develop” said Sinsicalchi.

IFA Senior Vice President, U.S. & International Development, Scott Lehr, KL Fredericks and Nancy Weingartner along with John Simmons, senior Commercial Officer and Manal El Mary, Commercial Specialist with the Abu Dhabi office of the U.S. Commercial Service met with Mohamed H. Al Muhairi of the Abu Dhabi Chamber and his team to discuss opportunities to increase the participation of U.S. Franchisors in franchising their businesses in UAE and in particular the greater Abu Dhabi area.

The full day wrapped up with an amazing sunset tour of the Sheikh Zayed Grand Mosque in Abu Dhabi which the trade mission participants all agreed capped off a successful start to the Middle East Trade Mission!