INTERNATIONAL. Brumbyâ€™s Bakeries, the speciality Australian bread retailer, will have stores opening across the Middle East after announcing it has signed up a master franchise in the region.
The ten-year agreement with consortium IIC Group covers Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the UAE in the GCC, as well as Iran.
Brumby's Managing Director Michael Sherlock said he expected the first Brumby's stores in the Middle East to open in the current 2006-2007 financial year. Four stores will be initially opened in UAE and Bahrain with more franchises targeted in Kuwait and Saudi Arabia "in the next 18 months".
He said the total number of franchises that would open in the region would depend on the success of the initial stores. "Since signing an initial memorandum of understanding late last year we have been finalising our business plan and conducting extensive market research," Sherlock said.
"It is clear that there is a tremendous potential in the Middle East and we expect to see considerable store growth during the next decade."
Sherlock said Brumby's would "continue to investigate suitable opportunities in other countries". The company currently has 317 stores across Australia and New Zealand.
Australia's largest locally owned coffee group, The Coffee Club, is following suit after signing agreements to expand its master franchises in South Korea and the Middle East. The Coffee Club has also signed an agreement with for the GCC countries and plans to open 47 stores in the region in the next five years.
Industry Capability Network CEO Jim Box said the Middle East was an evolving market, offering plenty of upside for Australian companies targeting the "upper crust" of the oil-rich region.
But Box, who was appointed by the Queensland government to set up a trade office in Qatar in 2004, warned companies to seek support. "The first major issue for many private companies is the need to establish a relationship with an Arab business partner," he said. "You cannot operate a business in the Middle East without having done this."
The Coffee Club Chairman Emmanuel Drivas said the business had grown significantly over the past few years and entry into the Middle East was a natural progression.