BUSINESS
F&B
REASONS TO HIRE F&B MANAGEMENT
COMPANIES The ever-evolving state of the restaurant industry has made restaurant management as relevant as it is challenging. Ralph Nader, CEO of Amber Consulting, unpacks this topical issue.
Restaurant owners and investors rarely sought professional help in the past. Unlike hotel investments, restaurant investments weren’t as lucrative and thus the need for a professional operator rarely made sense. Yet the recent rise of the F&B and entertainment industry around the world, including in the MENA region, has piqued restaurant owners’ interest and need for professional management assistance. It has now come to their attention that appointing a professional operator is definitely worth the hassle, especially when it can lead to higher profits.
Regional developments Following a thorough examination of the swift growth of the F&B industry in Saudi Arabia and in the UAE, it is safe to assume that this proliferation of casual dining and recent growth of delivery models has changed the rules of the F&B game in the region. Indeed, a minimum investment of a few million dollars is required to simply begin competing with the biggest F&B players on the scene. Surely, higher risks imply higher rewards; this has led many investors in the Middle East to enter multiple restaurant chains in anticipation of a generous payback. That being said, an initial investment merely establishes the grounds for a
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restaurant. Quickly, investors in the field have realized that the investment is just the tip of the iceberg; the larger chunk involves operational expenses that require continuous management.
Demand for professional management What creates a successful restaurant is actually professional management, in addition to a well-thought-out brand development strategy. It is this particularly daunting realization that created the need to involve professional operators in the equation. Seeking growth and profit in the Middle East, restaurants of all sizes – even the smallest of them – are considering handing over the management burden to professional F&B management companies in order to establish themselves as worthy competitors in the market. Some believe only small-to-medium F&B outlets require the help of such companies, whereas in reality, even successful restaurants must take advantage of their services to address a particular issue or for the sole reason of taking their operations to the next level to stay ahead of the competition.
Offers of professional management In parallel, hospitality management companies have recognized this rising need and have begun offering management-
related services for restaurants, in addition to hotel management services. Moreover, the increased demand has taken such a fast turn that even new players are entering the market. In the UAE, the most recognized F&B management companies are based in Dubai: (1) ADDMIND: founder and CEO Tony Habre, founded in 2001 in Beirut and later spread across the whole MENA region with 22 brands and venues; (2) 7 Management: founder and CEO Rabih Fakhreddine, founded in 2011 in Beirut, however already reaching KSA, Egypt, Greece and the UK; (3) Sunset Hospitality Group: CEO Antonio Gonzalez, founded in 2011 and actually present in 10 countries across over 20 F&B concepts. In Saudi Arabia, the Modern Food Company (MFC) dominated the market share until the surge of MJS Holding, one of its cofounders being a former member of the MFC Group. Elsewhere in the Middle East, the market of F&B management is yet to be defined, but it exists nonetheless. In Egypt, for example, certain hospitality groups started gaining some visibility, such as TLT Hospitality (founded in 2014) and Baky Hospitality, which was founded in 2013 by the hospitality tycoon Ayman Baky.
