The Middle East and North Africa region has emerged as one of the world’s most dynamic franchising destinations. Indeed, the MENA franchising market was valued at USD 33 billion in 2024, dominated by high-growth hospitality sectors such as food and beverage, hotels and entertainment.
Region-wide potential
Growth across the region is led by Saudi Arabia, the UAE, Qatar and Kuwait. This expansion is supported by strong consumer spending, large-scale developments and rising demand for differentiated hospitality experiences. As a result, international brands are increasingly expanding into the Middle East through two primary paths: franchising through a local operator or building and scaling their brand independently.
In this context, selecting the most suitable expansion model is critical. Each approach presents distinct advantages and considerations. These depend primarily on the nature of the concept and the ambition of the brand, but also on the operational complexities of the target market.
Scaling fast through franchising
Global brands that enter Middle East markets through franchise typically do so through large regional operators. These are often diversified family groups, which manage leading international brands, including Starbucks and McDonald’s. This model allows brands to reduce operational and financial risk while leveraging the operator’s local knowledge and expertise to enable rapid, large-scale expansion.
Franchising is a capital-light option that transfers investment, development, staffing and operational risk to the franchisee. Additionally, the franchisee manages day-to-day operations, absorbing operational complexity. This model also enables favorable sourcing and pricing, as scale-driven procurement improves margins. Franchisees typically operate large, sector-focused portfolios, which supports this advantage. Furthermore, scalability becomes more accessible through repeatable formats. Operators provide supply chain, delivery and workforce infrastructure that accelerates rollout speed.
However, franchising also involves practical considerations. Delivery is typically led by franchise partners, which can require clear frameworks and ongoing oversight to support consistent quality and service standards. Careful management of brand guidelines and localization is important to ensure alignment with the brand’s core positioning across markets.
The independent option
Conversely, some brands prefer to build and operate their own presence in the region. This is evident with Coya and Zuma, which prioritize full control over brand, experience and culture due to their reliance on curated ambiance and service. This approach allows brands to capture higher profitability by retaining full return potential. However, it is also financially riskier, as they make the full financial outlay.
Service-led formats, in particular, tend to expand independently. Ambiance and storytelling define value in these concepts. This is also evident with Magic Planet, which expands primarily through joint ventures and owned locations to ensure consistent quality standards. Additionally, this approach allows businesses to hold onto ownership of digital and CRM strategies. As a result, they retain control over customer data, loyalty programs and content—an increasingly critical factor across hospitality sub-sectors.
Major input required
That said, building and scaling a brand independently is complex and resource-intensive. It requires significant upfront investment and operational load, including local teams, supply chain setup, regulatory compliance, independent IT systems and a full suite of operational capabilities.
This approach can result in slower market entry. Licensing requirements, regulatory hurdles and talent mobilization extend timelines. It also demands substantial internal capability and bandwidth, which can lead to operational strain. As markets mature, expectations around modern design and tech-enabled services continue to rise. As a result, there can be higher levels of experiential and digital requirements, raising the cost of competitiveness. Furthermore, ownership exposes brands to higher market risk. Full responsibility for performance, localization and long-term viability rests entirely with the brand.
Concept nature plays a critical role. Highly standardized concepts with limited personalization are better suited to franchising due to their inherent repeatability and scalability. This is evident in F&B brands with simple menus and robust standard operating procedures, such as McDonald’s, Starbucks and Wingstop. In contrast, experience-led, identity-driven brands that rely on ambiance, personalized service and strong brand culture tend
to favor retaining control by expanding independently.
Similarly, identity-centric concepts such as artisanal bakeries and design-led cafes usually perform better when owned and operated directly. This is demonstrated by Bateel and Sikka Café. Entertainment brands often adopt mixed approaches. VOX Cinemas, for example, favors ownership to protect customer experience and loyalty. Meanwhile, FEC concepts such as Bounce expand through franchising in the Middle East via royalty-based agreements supported by clear guidelines, standard operating procedures (SOPs). Additionally, data- and loyalty-led formats such as VR Park Dubai and Dreamscape tend to favor tighter operational control through direct ownership. By doing so, they can retain control over customer data and digital engagement.
Aligning ambition with model
From an ambition and capacity perspective, brands seeking rapid, large-scale expansion often favor franchising. Those prioritizing control and curated experiences tend to build independently, resulting in slower and more selective growth. Brands that franchise to reduce financial burden often sacrifice long-term financial upside. In contrast, those targeting long-term valuation and financial independence may find direct ownership more optimal if they can absorb the higher upfront investment.
Full assessment is key
In the Middle East, market entry is often less about choosing between franchising and full ownership. Rather, it is more a spectrum of options. Both models offer distinct advantages and trade-offs, depending on the nature of the concept and the brand’s growth ambitions. As a result, brands are increasingly required to assess a set of key factors before selecting an expansion path.
These include the degree to which the menu and operating model are standardized. They also consider the concept’s ability to withstand execution variance, whether speed to market outweighs the pursuit of perfection and the importance of capital efficiency. Finally, brands must evaluate the extent to which structured SOPs can realistically replace brand culture and experiential nuance.
Emerging hybrid approaches
Recent trends show that some brands are adopting hybrid strategies. They operate directly in key flagship markets while franchising in others where speed, partner access and capital efficiency are more advantageous. Others are developing new mechanisms to franchise personalized and premium F&B concepts while maintaining a high degree of control over quality and service.
Em Sherif, for example, differentiates itself by applying a stricter and more detailed franchising framework than the norm. Granular SOPs govern food preparation, service flow, ambiance and brand presentation. In some cases, brands also franchise to operators while retaining a minority equity stake to preserve influence and oversight.
As competition intensifies and consumer expectations continue to evolve, the question for brands is no longer whether to expand into the Middle East, but how deliberately they choose to do so. The optimal mix continues to evolve. Brands must carefully assess how to balance control, capability and growth ambitions as new opportunities emerge across this rapidly expanding market.
Roy Hintze,
partner at PwC Middle East
PwC Middle East,
pwc.com
@pwcmiddleeast
