Lebanon Minister Predicts Great Future for Franchise Industry

29 May 2010 - BEIRUT: The budding Lebanese franchising industry has reached a turning point and is set to expand beyond the country’s domestic market.

BEIRUT: The budding Lebanese franchising industry has reached a turning point and is set to expand beyond the country’s domestic market, Economy and Trade Minister Mohammad Safadi told The Daily Star during the opening ceremony of the Beirut International Franchise Forum and Exhibition on Thursday.

“It is a turning point for the franchise industry. I see it as an expanding industry that can bring lots of revenues to those companies who are franchising,” Safadi said on the sidelines of the forum’s opening session.

The minister was among the keynote speakers who kicked off the two-day forum, which is unfolding at the Adnan Kassar Edifice for Arab Economy in Beirut until Friday.

The event, which is in its first year, aims to offer concerned businessmen the opportunity to hear leading speakers on topics covering the current trends and challenges and of franchising.

The Lebanese franchising industry, which is estimated at a value of $3.2 billion, leads the competition in the Middle East at a time the booming regional market, estimated at $30 billion in 2008, is drawing increasing international attention.

Experts agree the Middle East market is still in its infancy, but with a whopping growth rate of 25 percent, it offers promising opportunities which the Lebanese business community is impatient to tap.

According to Safadi, a growing number of companies possess the characteristics required to take a leap and join those few who have already begun to explore opportunities outside the country’s boundaries.

“The management level [of Lebanese franchises] has been growing, and I think in some cases it has achieved a proper level to carry franchising at the international level,” he said.

The minister also insisted that the country’s legislators were focusing their efforts to minimize the red tape that can interfere with franchising ventures.

“The success of franchising is more continuous and better maintained when the government plays a role. This is what we intend to do,” he said, adding that “a bundle of bills” aimed at safeguarding and improving the investment climate in Lebanon were in Parliament.

With small and medium enterprises currently making the bulk of the industry’s players, experts agree the Lebanese market has still a long way to go before it reaches full capacity. But with the recent explosion of the retail sector across the region – with shopping centers and entertainment centers multiplying –they say the industry is poised to grow.

“The sector is growing fast and is diversifying. It has already begun to penetrate regional and international markets,” said Adnan Kassar, the president of the General Union of the Chambers of Commerce.

Kassar further highlighted the “prominent position” that Lebanese franchises already enjoy in the region.

“Lebanon is a success story,” he said, adding that franchises originating from Lebanon were characterized by “a high level of taste and worldwide renowned quality.”

He insisted that the increasing practice of franchising a brand offered a business-model whereby risk is reduced. Franchising “will reduce the costs and risks associated with production, marketing, promotion, the adoption of modern management techniques, and access to credit facilities,” he said.

He also encouraged businessmen across the region to franchise Arab products. “[It] will represent an important opportunity to promote these products in foreign markets,” he said.

Lebanese Franchise Association President Charles Arbid, meanwhile, insisted on the need for Lebanese and Arab entrepreneurs to put forward creative products in order to be remain competitive on the international market.

“Our community is not only a consumer society, but also one based on creativity,” Arbid said.

Like previous speakers, Arbid further praised Lebanon’s flair for pioneering products. “There is a long story between Lebanon, creativity, and innovation,” he said, “We want the Lebanese franchise to become the ambassador of Lebanon worldwide.”

The Beirut International Franchise Forum and Exhibition continues until noon on Friday and is open to the general public.

Talks scheduled for Friday will deal with the legal aspects of franchising and with the common financing methods employed by practitioners.

The debates are complemented with stands set up for the occasion by Lebanon’s leading franchised companies.

Source: The Lebanon Daily Star -


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