Why is Chili’s in Lebanon so Good? The Success of the Lebanese Franchising Industry

When this writer came to Lebanon for the first time, from the US, he wanted nothing more than to try the world-famous Lebanese cuisine. So he was far from excited to be taken to the Beirut Chili’s, the Lebanese outpost of the American Tex-Mex chain. Expectations were low.

Low, that is, until the food came. The Beirut Chili’s is far and away the best, easily beating out their restaurants in the US. Lebanon is a powerhouse at franchising.

Bringing the World to Lebanon

In recent years, Lebanon’s business community has developed deep expertise in taking foreign concepts and making them work here. These franchises, brought in and executed by Lebanese entrepreneurs, are integral parts of the luxury retail and the food and beverage markets—both large drivers of tourism, attracting visitors (and their money) from around the world.

Lebanon is bringing in these franchises at scale. The Lebanese Franchise Association lists sixty foreign concepts as members, many with multiple locations in the country.

It is not easy to take a concept that exists in a foreign country—with a different culture, different economy and separate input sources and supply chains—and make it work in a new place. The success of these foreign concepts in Lebanon is a testament to the quality of Lebanese entrepreneurs, and a huge boon to the economy.

Home-Grown Success Stories

The real franchising triumph in Lebanon is not, however, the country’s success in bringing in foreign brands—but rather Lebanon’s ability to create its own.

Lebanon’s franchising era has really taken off in the last 10-20 years. Zaatar wa Zeit, dominant in the casual-Lebanese dining space, started in 1999—and already lists 16 domestic locations. Wooden Bakery is an older company, founded in 1969—but twenty years ago they standardized their baking processes and their concept, and growth took off. They’re planning to get up to 26 Lebanese locations shortly. This pattern of fast, recent growth has been repeated time and time again by Lebanese franchises.

And Bringing Lebanon to the World

Between domestic and foreign companies, according to a recent article in The Daily Star, there are, in 2016, 1200 franchises in Lebanon, responsible for close to 100,000 jobs, and making up about 4% of GDP. The industry is organized and united, represented by a strong industry association—the Lebanese Franchise Association. This group, run by the Lebanese businessman Charles Arbid, hosts a yearly conference (BIFEX—the Beirut International Franchise Forum and Exhibition) and runs certification and training programs, to name only a few ways that they support the business. Franchising is now a very large industry, deeply institutionalized in Lebanon.

It is also an industry that is struggling to grow. The franchise scene remains vibrant, with concepts such as Tabliyet Massaad catching fire and growing from one location to nation-wide penetration virtually overnight. Growth in the overall industry, however, is now negative.

To find continued growth, more and more Lebanese concepts are looking overseas for growth. Lebanese companies now have franchises in 40 countries around the world. With continued strong growth overseas, these companies can compensate for a shrinking market at home—and the Lebanese franchise industry can continue to go from strength to strength, despite the weakness in the national economy.

Photo Credit: chilis.com

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