How Lebanon’s franchising sector is faring

HOW LEBANON’S

SECTOR IS FARING

With franchising having helped Lebanon’s creativity and entrepreneurial flair spread far and wide, Yahya Kassaa, president of the Lebanese Franchise Association (LFA), tells us more about what his association has been doing to support members during uncertain times.

Lebanon has found itself in uncharted waters, and the vast majority of the Lebanese population is bearing the weight of the country's unraveling over the past two years. The socio-economic hardships, rooted in the political deadlock and ever-deepening economic meltdown, have been worsened by the impact of Covid-19. Compounding this turmoil, the explosion at the Port of Beirut tragically symbolizes where we have reached, as this never-ending storm of dramatic events painfully tears at our society's fabric. One would assume that our nation would rally around our homeland in the face of so much adversity. Unfortunately, the current governance principles guiding those entrusted with leading us out of this dark tunnel only appear to aggravate things. Instead of proposing a practical roadmap to provide us with a semblance of stability, crisis mismanagement has undoubtedly led to a significant deterioration in the quality of life for many Lebanese. As things stand, my greatest fear is that Lebanon's slow erosion is paving the way to the dissolution of its distinctiveness. As we witness the departure of a struggling middle class, we are left to cope with the consequences of an ever-diminishing pool of talented, driven and educated Lebanese — the integral component that, for centuries, made us stand out in the region and the world. The LFA is no different from society, as our members also had to adjust to this new reality. However, our government officials' failure to reverse or tone down incoherent decisions convinced our members that our efforts are futile if current governance policies remain unchanged. While most countries that have been affected by the pandemic and resultant economic difficulties also suffered, their local and central authorities did not abdicate from their responsibilities.

The result speaks for itself; a complete loss of confidence in our governmental and financial institutions has driven a growing number of brands to leave Lebanon in their efforts to survive. The LFA is inundated with potential franchisees’ and franchisors' requests to find them a match, with the end goal to expand business activities outside Lebanon. Egypt and the UAE, in particular, have seen a surge in franchise contracts.

In Lebanon, franchising has become a critical economic sector alongside traditional manufacturing, agriculture, tourism and banking. If the country is to turn around, it will need the franchising industry to be one of its main economic engines. That is why we initiated a series of programs to ensure that we export our added value brands in an organized manner, allowing them to prosper while maintaining our talent preserved in our beloved country.

We took advantage of the situation to increase our core services: one-to-one mentoring and consulting and franchise training for smaller groups.

The LFA published "Franchising Brands in Lebanon," a guide to LFA members and partners to facilitate finding franchisors or master franchisees. The publication affirms our belief in the LFA community's ability to overcome challenges and thrive once again. The guide will be distributed extensively, both locally and internationally, to showcase the "culture of Lebanese creativity" that our members embody. As a result of Covid-19 restrictions and lockdowns, local and international networking events like Franchise Expo Paris and the World Franchise Council (WFC) meeting were canceled or postponed; it thus became essential to promote the LFA’s brands through other outlets, such as social media platforms. In particular, Franchise Minute — a series of short video interviews with CEOs about "Positive Company Initiatives during Covid-19” — positively impacted our community. We also took advantage of the situation to increase our core services: one-to-one mentoring and consulting and franchise training (for smaller groups of participants). In that context, the LFA launched a specialized unit called FAPEX (Franchising Advisory, Promotion and Export) to offer freeof-charge consulting services. FAPEX aims to: 1. Strengthen the franchising ecosystem in Lebanon by enhancing knowledge and understanding of franchising by potential local franchisors

2. Create opportunities for existing franchisors

3. Facilitate business linkages between Lebanese franchisors and potential franchisees from abroad.

Over the past year, 50 franchisors participated in FAPEX's Advisory Program. Additionally, four Franchise Training Workshops were organized, with a total of 64 attendees. Internationally, the biannual World Franchise Council meetings took place online. The LFA remained in touch with WFC colleagues via Zoom to exchange views and experiences, particularly regarding what companies and governments were doing to deal with the pandemic and the economic crisis.

Based on the flurry of activities and judging by our members' reactions to the programs, it has become evident that the formation of a government is unfortunately immaterial. Lebanon faces a long-term crisis that simple measures will not solve, and companies and institutions have to take steps to survive. Helping them achieve this goal is what we will continue doing, thus safeguarding the backbone of our economy for the coming decade.