The Middle East -The Middle East -Booming Markets for US Booming Markets for US Franchises! Egypt, Jordan, Qatar

Let the U.S. Commercial Service connect you to a world of opportunity.

--The Middle East The Middle East --The Middle East The Middle East

Egypt

Jordan Q t Qatar

Legal overview: Legal overview: Franchising in Egypt, Jordan and QatarJordan and Qatar

Katie Withers

15 January 201315 January 2013

MIDDLE EAST OVERVIEW

National legal systems and IP rights (e.g. trademarks)

No distinct "franchise law" so need to consider: commercial agency law civil codecivil code commercial code

P bli li Public policy

Enforcement/Arbitration

Date of presentationInsert filename here 2

Why The Middle East???

A great desire to progress the lifestyles of women and younger generations in the Middle East y g g

“The world is becoming a global village. We are interlinked like never before. We are big believers that only business and commerce will set humanity free It’s the only safe and productive bridge”free. It s the only safe and productive bridge

With the help of US Commercial Services Planet Beach is rapidly expanding into the Middle East.  

HOW?

• # 1 is Working Closely & Building relationships with your US# 1 is Working Closely & Building relationships with your US Commercial Specialist•Gold Key Service 

What to look for in a Master Franchisee…•Financially Qualified

•Self Motivated•The passion for the brand

Franchise Trade Mission Franchise Trade Mission to the to the

Middl E tMiddl E tMiddle EastMiddle EastEgypt Jordan QatarEgypt, Jordan , Qatar

May 12-22, 2013_________

Safety & Security in Egypt:A Ch i E i tA Changing Environment

The changing security environment in Egypt presents challenges for U.S. companies

Manufacturers are investing more in security for their g ypersonnel and facilities

Visitors need to use common sense and be awareVisitors need to use common sense and be aware

There is no State Department Travel Warning for Egypt, but country specific notes including travel cautions can be foundcountry specific notes including travel cautions can be found at: http://travel.state.gov/travel/cis_pa_tw/cis/cis_1108.html

Good News in the Midst of Uncertainty

US committed to a strong partnership with Egypt.

y

The U.S. continues to be Egypt’s largest trading partner & second largest investor.

Egypt remains the 4th largest export market for U.S. products & services in the Middle East and 39th largest export market  overall.

Roughly two‐thirds of U.S. investment is in the oil and gas sector, and includes consumer goods, pharmaceuticals, and automotive.

Egypt is negotiating a USD 4.8 billion loan with the IMF.

Franchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastEgypt, Jordan , Qatar

May 12-22 2013May 12-22, 2013_________

US Commercial Service – Franchise Times – International Franchise Association Pre‐screened business matchmaking appointments with master and regional investorsinvestors.  Customized schedule of one‐on‐one meetings with key partners/franchisees. Nation‐wide advertising, promotion and exposure for your brand. First‐hand opportunity to assess market potential Opportunity to attend and exhibit in the US Pavilion at MIFE.  Special networking events with key government officials and local franchise industry movers and shakers. Visits to world‐class cultural sites and tours of strategic franchise locations Visits to world‐class  cultural sites and tours of strategic franchise locations.

Franchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastEgypt, Jordan , Qatar

May 12-22, 2013_________

Itinerary:Sun May 12 arrive Cairo informal gatheringSun., May 12 – arrive Cairo, informal gathering

Mon., May 13 – market briefing; one‐on‐one meetings; PR event/site visits

Tues., May 14 – one‐on‐one meetings;  evening reception

Wed., May 15 – Sat. May 18 – MIFI Expo – attend, exhibit;  cultural visits; travel to Qatar

Sunday, May 19 – market briefing; PR event/site visits; evening reception

M d M 20 ti t l t J dMonday, May 20 – one‐on‐one meetings;  travel to Jordan

Tuesday, May 21 – market briefing;; PR event/site visits; evening reception

Wednesday, May 22 ‐ one‐on‐one meetings; departure

Franchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastEgypt, Jordan , Qatar

May 12-22, 2013_________

Includes:In country transfers and transportation to/from airport and special eventsIn‐country transfers and transportation to/from airport and special events

Briefings, Selected PR events and Site Visits, US Embassy Hotel Rates,  Refreshments/Coffee Breaks, Lunches during meetings, Visit to MIFI Exposition; Pre‐TM consultations and other guidance.g

Opportunity to exhibit in US Pavilion at MIFI  Exposition

Does Not Include: Hotel, Airfare and Translators (if required)

Price:Large Company $ 9,600Small Company $ 6 200

US Pavilion @ MIFI (4 days)Booth (3x3=9meters) $2500

h ( ) $Small Company $ 6,200Each add’l executive   $    900

Booth (3x2=6meters)  $1700Catalog display + 1 banner  $1000

Franchise Trade Mission to the Middle EastFranchise Trade Mission to the Middle EastEgypt, Jordan , Qatar

May 12-22, 2013_________

Next Steps –Complete and submit an application

Review the Market and Industry Reports

February 26, 2013 – Deadline to submit application

CS Franchise Specialists evaluate each applicant for market potentialCS Franchise Specialists  evaluate each applicant for market potential

March 1, 2013 – Letters of Invitation sent to Franchisors

Website: www.Franchise.org/MEtrademission2013.aspx [live Jan. 25, 2013]

For more information contact: 

Scott Lehr, VP Dev. & Membership International Franchise Association

Nancy Weingartner, Executive EditorFranchise TimesInternational Franchise Association

SLehr@Franchise.orgFranchise TimesNancy²@FranchiseTimes.com

QatarQatar

• #1 GDP in the world•200 Billion Infrastructure spent in next several years200 Billion Infrastructure spent in next several years

U.S. Successful Franchises in Qatar

Beverages

Coca Cola 

Dr Pepper Snapple Group

Fast Food Casual Dining Coffee & Desserts

Dr. Pepper Snapple Group

Pepsi 

Fast Food Casual Dining Coffee & Desserts

Arbys Alison Nelson’s Chocolate Bar

Cinnabon

Burger King Applebees ColdstoneBurger King Applebees Coldstone

Dairy Queen Bennigan’s Dunkin Donut

Hardees Chili’s Haagen Daz

Johnny Rockets Fuddrucker’s Krispy Kreme

KFC Macaroni Grill Pinkberry

McDonalds Outback Steakhouse Mrs. Field’s

Papa John’s Pizza Ponderosa Steakhouse Starbucks

U.S. Successful Franchises in Qatar

rel • The Athlete’s Foot Gap, Banana Republic, Carolina Herrera, CAT, 

Colombia, Devi Kroell, DKNY, Ed Hardy, Guess, Gymboree, Hush Puppies, Juicy Couture, Levi’s, Limited Too, Nancy Gonzales, Oshkosh B’Gosh, Paris Hilton, Naturalizer, Nike, Nine West, Foot 

ppar , , , , ,

Locker, Quicksilver, Ralph Lauren, Sketchers, Steve Madden, Sunglass Hut, Timberland, Vera Wang

Ap

Best ProspectsBest Prospects

• Health food

hise

s Hea t ood• Fine/Casual Dining

Restaurant• Fast food ce

s

•Education•Automotive•Healthcare

anch

Serv

ic

Fra S

JORDANJORDANLocated in the heart of the Levant region

Neighbors: Southeast Saudi Arabia, North Syria, Northeast Iraq, Western I l d th W t B kIsrael and the West Bank.

Amman: Capital city, key urban market, excellent air connections, great weather!great weather!

Population: 6.5 million (includes 700,000 to 1 million Iraqis and 100,000 Syrians)

Land Area: 89,544 sq km (34,573 sq.miles).

Franchisea c se 150 Franchise Businesses operating in Jordan.

The industry sector provides direct employment for 12,000 people and accounts for annual sales of US $100 million.

First Franchise in Jordan opened in the ‘80s

In 2003 the first mall opened in Amman.

The withholding tax on royalties paid abroad is 7%.g y p

Sales within Jordan are subject to the value-added tax (VAT ) of 16%, and imported products are subject to VAT + the import tariff (zero on most products due to the US –Jordan FTA) with only a few exceptions for certain agricultural and luxury products.

To act as a Franchisor, you do not have to register a business in Jordan. What is important is to register your trademarks in the Jordan Trade Mark Office so your brand is protected. The Franchise Contract itself is not subject to any compulsory registration processprocess.

The local market remains enthusiastic about U.S. franchises local investors are increasingly interested in franchising, especially in the service sector and the f t f d i d tfast food industry.

Best Prospects for U.S. Export p p

Best prospects include franchises that can compete with the sometimes non-existent or often inadequate services proved by small shops and businessesexistent or often inadequate services proved by small shops and businesses such as:

Full service restaurants Fitness CentersFull –service restaurants Fitness CentersClothes Real estate businessAmusement parks Childcare/developmentAutomotive services Hotel/motelsCosmetics Electronic trade and Footwear Information technologyRepair, maintenance and rental services Education and trainingCleaning (home and industrial) Co-branding and multiple-

concept centersconcept centers

Franchising in Egypt

Let the U.S. Commercial Service connect you to a world of opportunity.

Egypt SnapshotEgypt Snapshotgypt S aps otgypt S aps ot

51 percent urban population 25 % ages 18-29Extremely Poor 25.2%Transparency 2 9 out of 10Transparency 2.9 out of 10

Population: 85 million

Inflation: 13.3% Unemployment: 12.4%

US Exports to Egypt: $6.2 billion US Imports from Egypt: $2 billion

Remittances: $4.6 billion in 4Q11

2011 Net FDI: $2.2 billion 2011 FDI Inflow: $5.5 billion

GDP (PPP) per capita: $5 994 (2011e) GDP growth: 1 6% (2012e)GDP (PPP) per capita: $5,994 (2011e) GDP growth: 1.6% (2012e)

FranchisingBegan in 1970:Began in 1970:Market Size:Estimated market size is more than $700 million.Estimated market growth is at an average rate of 27% per year.Home delivery:Introduced to the Egyptian market by fast food companies in the 1980sIntroduced to the Egyptian market by fast-food companies in the 1980s. A vital means for the industry to reach the market and increase sales by

10-30%, depending on the outlet location.F hi d B iFranchised Businesses:Total employment is about 55,000.60 operational American franchise chains.p65% of outlets located in Cairo.50% of Franchise Owners are between 35 to 49 years old.

Food Franchisingg

Facts:

In 1993 there were 7 operational chains, today there are 60 American franchises.

Fast food market is centralized in Cairo and Alexandria, 65% of outlets located in Cairo.

Excellent mechanism for entrepreneurship and SMEsExcellent mechanism for entrepreneurship and SMEs.

Concept is spreading & supported through numerous entrepreneur associations.

Examples   : Egyptian Franchise & Development Association: Social Fund Development Program

E ti h i iti t d f hi i th i t il b i t thEgyptians have initiated franchising their own retail businesses to others.

Non-Food Franchising

Facts:

Relatively new, developing & expanding concept.

L l l d h i i hi hl d d d b F hiLargely unexplored, however it is highly demanded by Franchisors.

Positively perceived value and attractiveness of U.S. goods and services.y p g

Best Prospects

For U.S. Non‐Food Franchises are in the areas of:

Hypermarkets

HealthcareChildcareEntertainment centers

Department stores

Gift shopsCleaning servicesg

Laundry and dry‐cleaning services

Stability and GrowthStab ty a d G o tPost Revolution:

Three Malls opened in Cairo and Giza with an average investment of $500 p gmillion per mall.

Five New to Market U.S. Franchises have been sold to the Egyptian market.

Diversified concepts are currently being negotiated.

Numerous concepts are expanding to open their 2nd and 3rd outlets

40% of the International Franchises are American.

Franchising Investment Climate

Total annual sales generated by all franchised businesses in Egypt is estimated at $2 billion.

Total investments in the franchise sector of the economy estimatedTotal investments in the franchise sector of the economy estimated at $6 billion.

The African Development Bank recently approved a $40 million loan to aid the Franchising Sector Support Program in Egypt. The program will g pp g gyp p gbe coordinated by the Social Fund for Development (SFD).

Rule: The U.S. franchiser should access the Egyptian market by direct contact with potential Egyptian franchisees in order to assure being up‐t d t d bl t t k f ll d t f t itito‐date and able to take full advantage of opportunities.

U.S. Franchise Pavilion at the 11th MIFE May 15-18, 2013May 15 18, 2013

Let the U.S. Commercial Service connect you to a world of opportunity.

Local Event

MIFE 2013: The 11th Middle East & North Africa International Franchise E hibitiExhibition 

Date: May 15th  – 18th , 2013 

L ti C i I t ti l F i G d S i l F d f D l t H llLocation: Cairo International Fair Ground Social Fund for Development Hall

Organized By: Egyptian Franchise Development Association (EFDA)member of the World Franchise Council since 2005member of the World Franchise Council since 2005

Show Statistics2012: 5800 Visitors – 42 brands from 9 countries2011: 9000 visitors – 42 brands from 11 countries2011: 9000 visitors  42 brands from 11 countries2010:  19,000 visitors – 110 brands from 17 countries

Don’t miss the opportunity to join the U S Pavilion at the MIFE 2013Don t miss the opportunity to join the U.S. Pavilion at the MIFE 2013

U.S. Pavilion at the 11th MIFE in CairoThe Egyptian Franchise Development Association will be hosting the 11thThe Egyptian Franchise Development Association will be hosting the 11thMiddle East and North Africa International Franchising and Licensing Exhibition (MIFE).

MIFE is the largest and most visited franchising exhibition held in the Middle East and North Africa (MENA) region.

The objective of this project is to support the expansion of the franchising industry to contribute to the economic growth of the region and to introduce U.S. franchisors and master licensees to significant opportunities to expandopportunities to expand.

The U.S. Commercial Service, Egypt will host the U.S. Franchise Pavilion during the Expo.

Services for U.S. FranchisorsMeet on a one‐to‐one basis with pre‐screened franchisees from Egypt and the region.

Display your products and services in a designated space (3x3 booth).

Spread the word about your product and services.

Maximum publicity and media coverage (TV, radio, and newspapers).

fThank you for joining us!