“I strongly believe 2012 is the year for homegrown brands to come into their own,” Saadi explains. “People are tired of paying over the odds to be franchising from the US or the UK. There are big fees involved. There is the talent here now to open and run businesses.”
Saadi’s past experience includes working in Paris and London setting up chef-driven, Michelin-starred restaurants, including The Greenhouse and Umu. He moved to Dubai over four years ago and set up Glee Hospitality with Alnajjar, whose background is in asset management.
Alnajjar admits that the trend of switching to F&B business from outside the industry is apparent in Dubai, but says not everyone does their research properly first.
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“F&B is a hot topic here,” he explains. “You don’t have to go out looking for backers – people call you. However, a lot of people underestimate what it costs to set up a restaurant. The start-up costs are high.
There are lots of hidden ones like staff visas and accommodation, medicals and insurance. You can’t really do a project for under AED 2 million (US $545,000). It costs you AED 6,500 (US $1,700) just in visas.
“It costs more to open a restaurant here than in Europe,” Saadi agrees. “Rents are very high,” Alnajjar continues. “In Europe and the US you pay around 8-10% of your income, here it’s around 12-18%.
It’s come down from four or five years ago, but it’s still high. You pay a percentage of your base sales. It’s more in favourable areas, and cheaper in areas like Al Barsha. In Dubai Mall it’s almost impossible. You pay approx 10% of your income plus 10% of sales as base rate – that’s more than AED 200 (US $54) per square foot!”
So it’s out of the malls and hotels and on to the pavement Glee will go, in its effort to open higher quality, affordable restaurants with atmosphere for diners who want something different in the UAE.
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