International Franchising can prove to be very profitable when franchisors are selective about what markets could support their business model.  Obviously, not every country has the financial foundation in place to provide a profitable and successful venue for a franchise company.

 

However, one such country that is proving to be a viable franchise market is Saudia Arabia.  And there are several reasons for that.  First of all and probably most well known, Saudia Arabia is the largest oil producer in the world.  This provides a huge influx of cash to the nation and its population of 23 million people depend heavily on this. 

 

Secondly, a not so common fact is that the people of this nation are extremely self sufficient and prefer to be self employed.  They tend to have sufficient capital to invest in a business and that is why U.S. and European concepts have been very popular as of late in the country.

 

Third, the Saudi Government has made it a point to help its people become independent of the oil industry and has offered many initiatives for Saudis to invest in other sectors of the economy.  This has also put an emphasis on attracting foreign investment, where in 2006 there was nearly $18 billion dollars put into the national economy from investors outside the country.

 

Finally, religious and cultural considerations exist for franchisors and franchisees when it comes to Saudi Arabia.  The nation is in the heart of Islam.  Businesses that come in from the outside are required to adapt and adjust to local customs.  This is especially important with regards to the religious background of the people where prayer is required 5 times daily and separation of the sexes is also mandated. 

 

Still, even with all of these cultural adjustments, Saudia Arabia has proven to be a good market for western franchise concepts that have been willing to modify their concepts to allow for successful introduction and operation in the country.