Smoothie King makes moves in United Arab Emirates
The Palm Jumeirah is an artificial archipelago in the UAE, created using reclaimed land. Two other manmade islands are planned.
To prepare his new international team at Smoothie King for its first foray into international expansion, Dan Hannah came to the meeting dressed in a dishdasha, traditional Middle Eastern garb.
“I wanted to get them ready for something different,” says Smoothie King’s vice president of development. This proved to be a good plan because the United Arab Emirates (UAE) is different, even for residents of New Orleans, which is sometimes viewed by the rest of the country as more exotic than mainland.
Smoothie King’s domestic staff is gearing up to double dip by adding international duties to their already busy agendas. The healthy food-and-beverage brand, which has 700 locations open worldwide, signed an agreement back in July with Al Ghurair Retail to open 45 locations in the Middle East, starting with Dubai in the UAE.
During the meeting with his team, Hannah went over his checklist and the country’s nuances—everything from the obvious, men and women are treated differently, to littering is a serious crime there. Alcohol consumption is illegal except for certain U.S.-branded hotels, and restaurants are divided into sections for families and single men. Hannah may not expect his trainers to wear dishdashas while working there, but, he’s not so sure they shouldn’t. “Everything (there) is designed to keep people cool,” he says about the heat. “Wear a tie and coat and you’d die.”
Smoothie King took some time off from international expansion and now the team is “burning the midnight oil to make this happen,” Hannah says about the development deal. Among the job responsibilities being channeled into international are recalculating recipe metrics and calorie counts, translations of menu boards and recipes, logistics, halal-certification, what goods can and can’t cross borders, drink cup sizes, store design and construction, legal compliance and adaptation of training materials. The units will be mainly mall and kiosk locations. “We’re a grab-and-go concept,” Hannah says, plus, they want to avoid adding to what he says is an oversaturation of restaurant seats in the two main metro areas, Dubai and Abu Dhabi.
“I want our cup to be like Starbucks’—an aspirational brand walking the mall,” he says, referring to the practice of people keeping their Starbucks cup as a prop long after the coffee is gone.
Malls in the UAE are not just places to shop. They provide hours of entertainment and a respite from the heat, in addition to a place to see the latest American and European fashions and brands. “There’s a lot of ‘being seen’ in the malls, like in the U.S.,” Hannah says.
Entertainment is big since the oil boom has made it possible for many UAE residents not to work. Workers are primarily temporary labor migrants. In 2013, the UAE had 7.8 million migrants living there, out of a population of 9.2 million, according to migrationpolicy.org.
The UAE is a federation of seven emirates, founded in 1971, according to the U.S. Commercial Service’s website. Dubai is often the gateway into entering the Middle East, since it is considered the commercial and business hub of the region.
During a trade mission there in 2013, franchise executives were told there was a competition between flashy Dubai (the pretty sister) with its proclivity for the tallest buildings and the biggest everything, and Abu Dhabi (the plainer, but wealthier sister) which has the oil franchise.
Both cities have their own active franchise divisions in chambers of commerce with plans at the time to do separate trade shows. Abu Dhabi chamber held its show in November of 2014, where it announced the formation of the UAE Franchise Development Association. Dubai hosts the Franchising Middle East event, according to its chamber’s website.
Partnering with experience
No international franchise story has done its due diligence unless it repeats the oft-voiced: Who you partner with internationally can make or break the deal.
In Smoothie King’s case, that all-star partner was Al Ghurair, which has operations in more than 20 countries. The group employs more than 70,000 workers across the Middle East, and Al Ghurair Retail will be opening the 45 Smoothie Kings over the next five years. The first unit will open in Dubai, then Qatar, Saudi Arabia, Kuwait, Bahrain and Oman, the company says.
Smoothie King’s domestic staff will do the training onsite, Hannah says. Although the majority of workers who will be hired at the units will speak English, training internationally is not the same as in the U.S., he adds. For one thing, he points out, since trainers can often be young adults, “some parents don’t want their kid going over there.”
International assignments are often seen as “sexy,” but many employees on short-term assignments in foreign countries view the experience with excitement tempered with a healthy dose of trepidation. “I try to give them the truth,” says Hannah, who has been taking brands to the Middle East for 20-plus years. “There’s so much fiction out there.”
While employees will do classic training, it’s at a much slower pace than they’re used to. Trainers need to speak clearly and slowly so the recipients can translate back and forth in their minds—and they can’t use idioms. After every two sentences the trainer needs to pause to allow “students” to catch up. “It’s wearing,” Hannah admits.
Making the smoothies has been simplified so that when an order is rung up, the recipe is printed out using a color-coded system, such as add a green scoop of this, a yellow scoop of that. “The only person I can’t hire is someone who’s color-blind,” Hannah quips.
The new units will start with the basic smoothies and then gradually localize them. This is done, in part, by going to local grocery stores and seeing what fruits are popular. He’s envisioning an avocado-with-ginger flavor as well as a date one. “We have 250 (recipes),” he says, “but we’ll start with 50 ‘killer ones.’ You always keep things in your back pocket for when guests get tired, so you’ve got a proven recipe to bring out.”
Sky Zone is one of the non-food brands jumping into the Middle East market. Its first unit will be open in Saudi Arabia by the end of the year. By 2016, the chain is expecting to have a signed agreement for parks in the UAE.
CEO Jeff Platt isn’t expecting to alter his concept much, except in building smaller parks. He does, however, anticipate structuring times when only women and children are allowed in and the staff is all women, so women can jump in athletic clothes rather than traditional robes with head covering.
Platt has found the business people he’s encountered “move quickly and are very focused on business.” It’s a trait he admires, because “no one makes money until they’re open.”
Unlike Smoothie King, Sky Zone has a separate international department.
Platt’s advice—going back to the a good partner is the most important thing mantra: “Just because people have a lot of money doesn’t mean they’ll be the right partner. It’s easy to get enticed by the dollars flowing there.” Make sure the company’s culture fits yours, he says.