Franchise survey: Four percent of GDP

LFA Association
publishes sector figures

The Lebanese Franchise Association (LFA) revealed the results of the franchise sector study that was carried out by InfoPro Research. The figures show that the franchising sector contributes four percent to the local GDP. The survey said that there are 1,100 franchisor concepts, and 5,500 franchised Point of Sales.

The study is part of the ‘Capacity Building at the Lebanese Franchise Association’ project funded by the EU delegation. The total amount invested in this project is around $200,000. Charles Arbid, Chairman of the LFA, said that this survey is the first to be carried out in this field and will be used as a reference base when evaluating the sector. “We will rely on the results of the study in future dialogues with the government,” said Arbid. The field study was carried out by InfoPro.

Angelina Eichhorst, Head of the EU Delegation to Lebanon said that the franchising industry has a high potential that the EU wants to develop it further with the local authorities. “Lebanese expertise is unique in the region and the world. We need to push franchising initiatives forward.”

The number of employees in the franchising sector is nearly 100,000, around nine percent of the country’s workforce. Minister of Economy and Trade Alain Hakim said that more efforts should be deployed in order to increase the number of employees in this sector.

According to the study, 22 percent of franchisees said that their annual sales exceed $2 million. Two thirds of franchisors and franchisees reported making marginal profits or breaking even in 2012.

The study said that franchising is the preferred growth strategy abroad. The main export countries are located in the Gulf and the Middle East. Europe is also a main attraction, especially Paris and London.

The average investment for opening a franchise in the local market ranges from $250,000 to $500,000, excluding franchise fees.

Eichhorst said that there is a big gap when it comes to the role of the government, considering legislations, IP protection, registration, double taxation, and others. “It is high time to encourage entrepreneurship and to accede to the World Trade Organization (WTO).”