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BurgerFuel puts pipeline into Saudi Arabia & Bahrain
by , last updated on 29th July 2009
2 April 2009 - BurgerFuel announced today that it has signed its second international master licensing agreement outside of Australasia, in the Middle East. The deal is for the two countries of Saudi Arabia and Bahrain.
The agreement has been signed with the Abdulla Fouad Group, a major corporation based in the eastern province of Dammam, in the Kingdom of Saudi Arabia. BurgerFuel Chairman Peter Brook said that the deal is significant for BurgerFuel for many reasons, but especially because of the high reputation of the corporation and its founder.
‘The Abdulla Fouad Group is ranked within the top 100 companies in Saudi Arabia,' he said. ‘The company has major connections and it holds the agencies for many large international brands in Saudi. They also have diverse interests in real estate, oil, telecommunications and numerous other industries. They are well respected as one of the most prominent families in the eastern province of Saudi Arabia.'
The deal will involve the construction of BurgerFuel stores in Saudi Arabia and Bahrain. The outlets will be operated under master licence to BurgerFuel Worldwide (BFW), the NZAX-listed company. As master franchisee, Abdulla Fouad Group will fully fund store construction and operational costs. BFW will support the brand and earn up-front territory fees and on-going royalties based on store turnover.
BurgerFuel Executive Director Josef Roberts said that a strong relationship had been formed with the principals of the Abdulla Fouad Group. ‘There is a lot of respect both ways for making this deal work and we think if we get this right, we will have a strong partner that could lead to other opportunities. Saudi should be a good market for BurgerFuel - it has a population of around 28 million, with a large majority of young people, who want western concepts. Convenience food has become a large part of their culture.'
BurgerFuel is currently working to establish itself in Dubai and within the UAE and signing the additional neighbouring countries of Saudi Arabia and Bahrain ‘will add economies of scale to its expansion within the Middle East,' says Roberts.
‘It's hard work in every country right now but things are happening and we just have to keep focused and stick to our objectives. In the end, we are not in luxury goods, consumer goods, property or cars. We are in food - well priced, high quality food - and people have to eat every day. If we can get some runs on the board in this market, then in my view we have every chance of one day reaching our goal of becoming a global brand.'
BurgerFuel currently has 26 outlets in NZ and 2 in Australia. It is due to open its first outlet in Dubai this year under a master licence agreement with the Alphamed Group. Roberts said that, ‘They have had difficulty finding quality locations in Dubai and have not been prepared to compromise. Real estate in Dubai is now freeing up and becoming far more realistic on rental price, but in Saudi our partners own the shopping mall where the first site has already been selected.' The first Saudi outlet will open later this year.
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