By Bader Eissa Alsadoun*

WITH the growing appetite for investment and trade in the Kingdom, as well as the stimulating environment for entrepreneurs and business startups, franchise contracts have emerged as an increasingly popular business model.

The Middle East franchise market is witnessing significant growth with market size of $30 billion. The Kingdom of Saudi Arabia accounts for only 50% of the total value of SR56 billion. This number is on the increase due to the introduction of franchise by Saudi Arabian brands as part of its expansion plan within and outside the Kingdom.

Commercial franchising began in Saudi Arabia in the early 1980s, and widely spread after the Gulf War in 1991. The Saudi market is very attractive to trademarks because of the large volume of demand and strong purchasing power compared to other markets.

Saudi Arabia is the largest market in the Arabian Gulf and franchising has witnessed remarkable growth in the Middle East region over the last few years with an increasing number of international companies seeking to establish a presence in the region. A thriving economy coupled with a growing and young population makes Saudi Arabia an inviting market for the franchising industry.

This leads us to work to adopt the support of Saudi brands and enable them to compete in the internal and external markets because this industry opens many job opportunities and eliminates unemployment while at the same time contributing to raising the level of the market and strengthening the economy.

The government of the Custodian of the Two Holy Mosques King Salman has recently paid tribute to this sector and started supporting it through government institutions such as the Development Institution and the Social Development Bank. The big challenge was to raise the commercial awareness of the entrepreneurs and their technical and financial support to prepare them for the challenge.

The average percentage of franchise is between 4-9% of the total income, which is a small percentage compared to the giving experience and methods of operations as well as the reputation of the trade name.

* The writer is CEO of Dar Juwanah Food Company