Figaro Coffee expands network to Middle EastBy Doris C. Dumlao
Philippine Daily Inquirer
Homegrown coffee chain Figaro Coffee Co. is making inroads into the Middle East as part of a global expansion program anchored on the franchising route.
Figaro, which is celebrating its 20th year, will open in the last quarter of this year its first store in the United Arab Emirates at the Dubai Miracle Gardens, touted as the world’s biggest flower garden. This is in line with Figaro’s aspiration to open an average of two international stores each year, Figaro franchise manager Mike Barret said in an e-mailed reply to Inquirer.
The Dubai branch of Figaro will be operated by AKAR Landscaping Service and Agriculture, the company said. This master franchise in Dubai is seen to top off the growing global franchise now with two Figaro stores in Papua New Guinea, two in Malaysia, two in China and one in Saudi Arabia, with a second branch expected to open soon.
“We are active in international expansion but we need to carefully study the viability in any given country with the opportunity for the brand to expand. Average target expansion of the organization is 15 stores per year [including overseas branches] so the international expansion share would be 14 percent of the average total expansion target of Figaro,” Barret said.
Figaro is, thus, close to hitting a network of 10 overseas stores, seen as the critical mass needed for international expansion. All of these overseas stores are owned by franchisees.
Asked about the basis for selection of overseas markets and overall expansion philosophy, Barret said selection would depend on the expected perception of the market with the Figaro brand.
“For Saudi Arabia, China, Malaysia and UAE, we believe that these markets are already mature in terms of brand preference. Since these markets are exposed to a lot of international brands, we expect that this will be a good venue for Figaro to compete in terms of product quality and to highlight the overall package of our business concept,” Barret said.
“Figaro is just starting to be known internationally and we believe that expanding in these economies would also help us to promote the brand,” he said.
Figaro is especially keen on the UAE due to its large number of expatriates and tourists coming from Asia, Middle East and Europe, Barret said.
“Rate of exposure is expected to be high when we start to open in Dubai,” Barret said.
When Figaro conducted a study in the Papau New Guinea market, it found out that it is an entirely different scenario there since the country still lacked foreign and local coffee shop brands. But it decided to proceed with the expansion there given an “overwhelming” requirement for a specialty coffee shop particularly in the country’s capital Port Moresby.