A food industry expert has warned companies in the Middle east against falling into the trap of randomly granting franchises for quick profit.

Speaking at the International Conference and Expo for Franchise 2008, Rami Abu Ghazaleh, CEO of Albaik Food Systems, pointed out that several companies were making the mistake of franchising their brands for quick profit and strongly advised them to first set up an administrative mechanism consisting of specialized personnel to study franchise applications and supervise implementation.

An initiative to enhance new trade and economic opportunities in the Kingdom, the conference, organised by the Riyadh Chamber of Commerce, is part of its efforts to make Riyadh the centre of business franchising in the Kingdom.

'We do not have to go back 50 years in order for the Arab Market to go through the same enhancement phases that the international markets did aiming to reach Franchise organizations, but instead we have to benefit from their experiences,' said Rami.

He stressed on to the need for effective legislation to be put in place covering both the franchisor and the franchisee in order to protect the franchise’s reputation and maintain credibility as a brand.

He also raised the issue of brand counterfeiting and copycat operations, pointing out that in most Arab countries there is a need for stronger rules and greater co-operation between companies and trademark registration authorities.

This was needed to defeat the illegal activities of the growing number of experienced counterfeit practitioners who are stealing the rights of legitimate businessmen, he added. 

Rami said franchising was an important factor in measuring economic and local development besides encouraging the export of local know how to international markets as well as attracting foreign investment.

“The International Conference and Expo for Franchise provides a great opportunity for franchisors and franchisees from around the world to meet and do business in the capital city of the biggest economy in the Middle East,” he added.

Established more than 30 years ago and today an icon of the highest quality and best value, Albaik, the most popular chicken and seafood restaurant chain in Saudi Arabia, is a proactive practitioner of corporate social responsibility and a leader in providing educational programs that aim at developing the minds and creativity of youth, he said.-TradeArabia News Service