Dubai: Subway, the quick-service F&B brand, has wiped the slate clean and come up with a brand new business model for its UAE operations. Known for its sandwich variations and toppings, Subway has decided to employ a master-franchise – the Kamal Osman Jamjoom (KOJ) Group – instead of the multiple franchisees that were handling the UAE network.
The move will allow Subway enough room to return to high growth ways in this market. In the recent past, according to market sources, Subway had seen the closure of some high-street locations even as its in-mall outlets continued to do well.
For KOJ Group, a Saudi entity with multiple retail brands, this is its first step into F&B. “The Group had the desire to open a F&B division for some time, but we were waiting for the right partner,” said Hisham Al Amoudi, Group CEO of KOJ, to ‘Gulf News’. “Historically, Subway had a unique model for the UAE in which multiple franchisees owned and operated the restaurants.
“KOJ is the first exclusive master-franchisee in the UAE - and one of the first few globally. KOJ has brand and development responsibility for all existing UAE sub-franchises, which remain under their existing ownership, as well as any new restaurants which would be owned and operated by KOJ directly.
“Standard industry practice in the UAE is for quick-service restaurant brands to be operated by one master-franchisee. This allows for the implementation of one shared vision across the board, with all stakeholders operating as one voice in the marketplace.”
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For Kamal Osman Jamjoom Group, the F&B space might be a new one, but it can still make use of the extensive experience from handling consumer brands and concepts such The Body Shop, Early Learning Centre and Lego.
Even then, getting into F&B for the first time takes some doing, especially after the changes the category had been subjected to from the COVID-19 spread. Al Amoudi shrugs off such concerns getting in the way for his plans with Subway.
“The new operating model will help us be more consistent with our brand, provide a better experience for guests and be more profitable as we accelerate Subway’s growth in the UAE,” he said.
Opportunities for consolidation will be entertained, as long as they are in line with Subway’s global strategy and in the interest of all parties working towards this strategy
Will it mean more outlets/sub-franchises might be closed? The CEO did not provide a clear blueprint, but did say: “Opportunities for consolidation will be entertained, as long as they are in line with Subway’s global strategy and in the interest of all parties working towards this strategy,” he added. “The exciting thing about Subway in the region is that there is a lot of room to grow. Subway is focused on ensuring we have the right restaurants in the right locations.
“The goal is to deliver excellent guest experience, while maximizing franchisee profitability.”