Buying a Franchise vs Building a Concept in the UAE: The Questions a Franchise-Sourcing Agent Will Not Ask You

Every few weeks an enquiry arrives that asks GGB to do something it does not do: find a franchise to buy, or find a site to lease. The enquiry is reasonable — a founder-led consultancy with 45+ F&B concepts developed and launched should know where the good deals are — and the answer is still no. This piece explains why, and then does the more useful thing: it sets out the questions an owner weighing a franchise purchase against building their own concept in the UAE should test first, because those are the questions a franchise-sourcing agent is not paid to ask.

Why GGB does not source or broker

A party paid by the sale has an interest in the sale. A franchise-sourcing agent earns a fee from the franchisor, or from the buyer on signature, and a property broker earns on the lease. Neither is paid for telling you that the deal does not work at your rent. We do not take those roles because we could not then read the deal honestly for you, and reading the deal honestly is the only thing we are for.

What we do instead is the reading: the fee stack, the unit economics at the actual rent, the transferability of the system to this market, the exit. The decision stays yours. Our fee does not move with it.

The questions a sourcing agent will not press

Question 1 · What is the total fee stack, as a share of sales?

A franchise agreement carries an initial fee, a royalty on sales, a marketing or brand levy, and often supply obligations that carry a margin to the franchisor. Read them together, as a percentage of revenue, for the life of the agreement. In a restaurant whose prime cost already sits near the typical ceiling — food and labour together at around 60–65% of sales — a royalty and levy of several points of revenue are not a detail. They are the difference between a site that works and one that does not, and they are paid before the owner’s return.

Question 2 · Does the model break even at the rent your site asks?

The franchisor’s model was built somewhere. Its assumed rent, its assumed spend, its assumed covers came from that somewhere. Your site has a rent, and Dubai rents are decided early and bind for years. Take the franchisor’s unit economics, replace the rent with yours, replace the average spend with what your district will bear, and read the break-even in covers per day. If the covers required are ones your catchment has never produced, the franchise is not the problem and the site is not the problem; the pairing is. The break-even instrument does this in minutes, on your device.

Question 3 · Which parts of the system actually transfer?

A franchise sells a system: the menu, the supply chain, the training, the brand, the operating standard. Some of that travels to the GCC intact. Some was built for a labour market that can flex headcount weekly, a supply chain that does not need halal certification and a re-based landed cost, a guest who eats at different hours. The corridor problem in franchising from India to the GCC is the same problem in reverse: a system that is not re-based for the market it lands in carries its home-market assumptions into a P&L that cannot support them. Ask which manuals were rewritten for the region and which were translated.

Question 4 · Will existing franchisees in the region show you their numbers?

Not the franchisor’s model. The franchisees’ actual P&Ls, in this region, at rents like yours. A franchisor confident in its unit economics will connect you; one that steers you back to the model has answered the question in its own way.

Question 5 · What are the exit, renewal and transfer terms?

The agreement runs for years. What happens at renewal, what the franchisor can change unilaterally — the menu, the supplier list, the levy — what a sale of the unit requires, and what a closure costs. A sourcing agent reads the front of the agreement; the owner has to read the back.

Question 6 · What does the franchise cost you in the concept you did not build?

The quiet cost. A franchise buys a proven format and gives up the option of a format built for your guest and your occasion — and gives up the possibility of owning a system you could later franchise yourself. For some owners that trade is exactly right. For an owner whose catchment is specific, or whose ambition is a group, it is the more expensive route dressed as the safer one.

When building the concept is the better route

Three cases, in our experience, where an owner who came in asking for a franchise left building their own.

The catchment is specific. A residential district with a defined community, an office cluster with a fixed lunch window, a neighbourhood where the occasion is a family Friday — a borrowed format has to be bent to fit, and the bending costs the standardisation the franchise was bought for. A concept designed from the guest and the occasion fits without bending; what a concept has to contain before it is briefed sets out the seven decisions.

The fee stack takes the margin. When the royalty and the levy, read against the site’s rent, leave a return that would not justify the capital, the site can still work — without the stack. The owner’s own concept keeps those points of revenue.

The ambition is a group. An owner who intends a second, third and fifth outlet is building a system whether they mean to or not. Building it from the first outlet, with the dependencies made explicit and the controls written down, produces something that can later be franchised out. Buying someone else’s system produces a franchisee. The Franchise Readiness instrument reads how far along that first case an operation already is.

Reading a franchise model the way a study would

If you decide to test a franchise seriously, run it through the same reading a feasibility study gives an original concept, and insist the franchisor’s numbers survive it.

Start from the top line: the covers per daypart and the average spend the franchisor assumes, replaced with what your catchment and your district actually produce. Then the cost lines against the published bands — food against the working ceiling of around 32% of revenue, labour against around 30%, prime cost against the 60–65% ceiling the two add up to — with the franchisor’s supply obligations priced at your landed cost, not the home market’s. Then the rent your site asks, as a share of the revenue the room can plausibly produce, read against the typical 6–12% band for the format. Then the fee stack, as its own line, for the life of the agreement. Then the capital: the initial fee, the fit-out to the franchisor’s specification, the working capital, and the payback that implies.

What comes out is a break-even in covers per day and a return on the capital, at your rent, with the fee stack paid. If it holds, the franchise is a proven system that fits your site. If it does not, no amount of brand will make the site produce covers it has never produced, and the honest answer is a different site, a different format or a different deal.

When the franchise is the better route

Equally honestly: when the owner has capital and a site but no operating background, when the format genuinely matches the catchment, when the fee stack still leaves a return at the local rent, and when the franchisor’s regional franchisees will show their numbers and the numbers hold. A proven system reduces concept risk, and concept risk is the one most first-time owners underestimate. The test is the six questions above, answered on paper, before the signature.

What to do with an enquiry we cannot take

If you wrote to ask us to find you a franchise or a site, this is the reply: we will not, for the reason above, and we will read the deal you find — the fee stack against the rent, the transferability, the exit — before you sign it. The reading is where the money is saved; the sourcing is where it is spent.