Saudi Arabia is the largest market in the Middle East with the fastest growing economy in the region. The oil sector remains the core of economic activity in Saudi Arabia, providing the financial backup for government expenditure plans and broader economic confidence.
With relatively low inflation rates, low taxes and ample capital availability, Saudi Arabia remains an attractive destination for foreign investments.
Saudi Arabia is the largest market in the Arabian Gulf and the Franchising has witnessed remarkable growth in the Middle East region over the last few years with an increasing number of international companies seeking to establish a presence in the region. A thriving economy coupled with a growing and young population makes Saudi Arabia an inviting market for the franchising industry.
ith a per capita reaching its highest level ever at $22,663 and a young population, 57 percent are under the age of 25, both combine to provide an important base for the franchising sector. Saudi youths usually opt for managing and operating their own businesses, which in turn opens up opportunities for growth along various franchising sectors. Moreover, there is an overwhelming number of Saudis who have studied and traveled abroad extensively, and who have acquired a taste for Western trends and culture. Many of the brand names are already well entrenched in the market. It is estimated that Saudi Arabia represents a multi-billion dollar market for franchising with an estimated value of $1.3 billion in annual fees and royalties, and expected to grow an average of 12-15 percent per year.
There are more than 300 foreign companies that have founded franchises in Saudi Arabia. Most of the franchise concepts are focused in food & beverages, retail, automotive services, healthcare, education, furniture, hotels, cosmetics, laundry services, apparel, patisseries, juice centers, corn shops, etc. According to a private research report, and in contrast to the overall conservative nature of the Kingdom, the Saudi market is the largest in terms of per capita spending on cosmetics and fragrances. It is also estimated that 20-30 franchise brands were locally conceived, especially in the food and beverage sector.