The company announced that it had signed a deal with Saudi Arabian food service company A.A. Turki Corp. for Trading and Contracting (ATCO) to open many of its concepts in Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The company operates a number of restaurant concepts, including Moe's Southwest Grill, Mama Fu's and Planet Smoothie Café.
"Every deal we undertake today is part of a focused strategy to develop Raving Brands into a global franchisor. It reflects a real departure in our previous growth strategy as a company that reacted to market demand, regardless of its geography," explains Stephen M. LaMastra, president and chief operating officer of Raving Brands, in the statement announcing the transaction.
The agreement follows Raving Brands' recent announcements to develop Moe's Southwest Grill in Canada and Doc Green's Salads & Grill in Singapore. The three independent deals will result in the development of 150 Raving Brands restaurants, providing a platform for future international growth, the company said. Raving Brands also plans to open 200 restaurants domestically this year.
According to ATCO and Raving Brands, demographic shifts in the Middle East have created a young market -- about 65% of the population is under 25 – that has been exposed to Western culture and wants American concepts.
"[The Middle East} is a rapidly growing, capital-rich area," said food services consultant Dennis Lombardi, executive vice president of Columbus, Ohio-based design firm WD Partners. "Secondly, in spite of all the issues, there is still interest in U.S. restaurants. A number of brands have been successful."
Expatriates will provide a significant market, and local wealthy families are looking for investment opportunities outside the petroleum industry, he added. But success isn't a given. It is critical to understand and adapt logistics to local cultures, even within submarkets. A separate area for women and children that would be expected in Saudi Arabia may not be necessary in Dubai, for example. Stores may shut for brief periods each day to accommodate prayers, he noted.
The chain has yet to determine which brands will be exported to the region.
In the coming months, we will begin to look closely at which brands will make the most sense to launch in the Middle East based on the geography, the real estate and the demographics," said Chris Morocco, chief development officer for Raving Brands, in the announcement.
Raving Brands operates more than 600 restaurants under nine banners in 38 states, and a Doc Green's Salads & Grill in Singapore.
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