Perhaps the best example I can give of this is a recently-opened shopping mall in Dubai, which mandates that all F&B outlets must use a particular brand of extractor fan.
The mall management fails to explain why this particular model must be used: in fact, it’s no better than most others on the market, except for being far more expensive.
These problems could be easily overcome by involving restaurant experts at the onset, when committing such large-scale developments to paper.
A well-planned space will make it less costly for an independent restaurateur to set up an enterprise and more efficient for the developer too — no developer wants to see empty units.
In any kind of global trade, the fewer the barriers there are, the more cooperation that exists, the higher volume of trade for all.
So how can we make conditions more conducive for the budding restaurateur?
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• Reduce rents
Rents remain prohibitively high, forcing management to put too much emphasis on early profitability.
Thankfully the landscape is changing, but landlords do need to be patient and learn to incentivise.
Restaurants are rarely cash cows but they can add greatly to the value and the draw of the overall development.
• Landlords need to relax strict specifications for fit-outs
Too many rules lead to high start-up costs, which are often off-putting to independent businesses.
Making sure people don’t put an oven in front of the fire exit is important and necessary; choosing the brand of extractor fans is fruitless.
This is one area where the government could step in through the mandate of minimum requirements and by frequent inspections of premises.
• Investors need to be more realistic
Over the past few years, many business people in the UAE have been focused on making a quick return in lieu of a steady monthly income.
Hopefully changing economic conditions will make a steady but robust long-term growth model more attractive. Bearing that in mind, the choice of local partner is key.
Find a partner who shares your passion for food rather than one who is merely looking for another investment opportunity. It can mean the difference between success and failure.
I am greatly in favour of a change in the law that would allow 100% foreign ownership — I think it would create a climate in which the independent restaurant business could thrive.
• Don’t be afraid to enlist help
A good consultant will possess superb local business acumen.
While hiring a consultant may sound expensive, it can often save money and time as they can navigate through all the tricky areas successfully.
And a great consultant will be realistic and will always advocate the correct balance between passion and a solid business model.
For more information on Thomas Klein Group, click here.
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Nov 24, 2009
Restaurants in the Middle East will never be as successful as those in major culinary capitals like London and New York, because the people who own them simply don't care about operations - they're only interested in the revenue it brings in. How many restaurants do you know in Dubai for example...