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McDonald's exec: Supply chain, real estate, franchisees keys to global growth

McDonald's Middle East Development Company's managing director says keeping the consumers' wants in mind is important for a brand hoping to expand globally.

April 23, 2013 by Cherryh Cansler — Editor, FastCasual.com

Delegates at the International Franchise Forum in Dubai on Tuesday heard about how McDonald's is succeeding in the Middle East from Yousef Abdulghani, the chain's managing director of McDonald's Middle East Development Company.

The chain has nearly 900 units in 17 markets throughout the MEA region and is planning to open another 500 in the next three years. Part of that success is due to the emerging middle class in the area, which is inspiring brands from every segment to expand there.

What these brands have in common, Abdulghani said, is the need to control three key aspects of franchising in order to be successful. Those include:

• Controlling the supply chain;
• Finding the correct real estate; and
• Working well with franchisees.

Supply chain
Controlling the supply chain is always a challenge for any restaurant, especially when a brand's home base is elsewhere. What McDonald's has on its side is size, which it often uses as leverage to secure decent costs. Smaller brands, Abdulghani said, may not be so lucky, but they must clearly understand the logistics of getting their products into the hands of consumers. Changes in government regulations may hinder such progress, which is why it's imperative for restaurateurs to understand the laws and policies of each country in which they operate.

Real estate
Many restaurant brands, especially those that go international, rely heavily on mall units. But there should be other focuses.

"You can't build brand equity in food courts because you are limited in what you can demonstrate," Abdulghani said. "If you are into building brand equity, you must find the balance with your presence in malls and outside (of them).

Developing the right relationship with franchisees
It may sound obvious to a sucessful franchisor, but supporting the franchisee is imperative to success, Abdulghani said. The franchisor is more than just a business partner, it is a leader and must be one step ahead when it comes to business operations.

"It's easy to sign a contract and forget about it, but you can't do that," he said. "You must convey to your franchisees the global direction." 

McDonald's does that, Abdulghani said, by protecting the image and branding of McDonald's, choosing franchisees with similar values, staying consistent with the brand's positioning and trying to remind franchisees that what the customer wants may not necessarily be what "they" want.

"You can't be everything to everyone," Abdulghani said. "It's about staying consumer relevant and customer centric. It's easy to copy someone else, but that's not always going to be successful. You have to understand what the customer wants, not what 'I' want."

Read more about franchising and growth.

About Cherryh Cansler

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Cherryh Cansler is VP of Events for Networld Media Group and publisher of FastCasual.com. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.

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