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Shawarma goes global

by Joe Dyke

Elias Chabtini is a remarkably confident man. The chief executive officer of Shawarmanji, the increasingly ubiquitous shawarma chain which began in Beirut in November 2012, has an incredibly aggressive strategy for the coming years. In a little more than six months, the company has established six branches in Lebanon and one in the United Arab Emirates, while by the end of the year Chabtini says they will have a minimum of 16 across the two countries. And with plans agreed to head into Qatar, other Gulf states and beyond, shawarma could join falafel — with franchiser Just Falafel’s rapid expansion last year — as another taste of the Middle East on the global palate.

“We would like to hit between 50 to 70 shops by the end of 2014. We will be the first concept ever that has opened so many stores in such a short period of time, definitely in our region,” Chabtini says. The company is certainly well-backed — it raised more than $8 million before it launched and the Building Block Equity Fund recently bought a 5 percent stake for $400,000. In Lebanon, Chabtini says, they will open 25-30 shops by the end of 2015, adding that he has few concerns about growing too large. “You can never saturate shawarma. Can you saturate hamburger, can you saturate pizza? Today you have over 80 hamburger brands alone, between the guy who has his own store to McDonald’s, and they are all doing well. Where is the saturation?”

An appetite for growth

This confidence is further reflected in the company’s worldwide strategy. For while Chabtini expects Lebanon and the Middle East to be the basis for the company’s support, he has now set his sights on taking his concept of shawarma global. He says the company has had over 180 entrepreneurs express interest in establishing franchises including in the United States, Germany, France and Canada.

But their first step outside the Middle East will be to the United Kingdom, with a franchise due to open in the coming months. Chabtini was a little hazy on the details, many of which are still being negotiated, but says the initial focus is on central London. “We want to test in London and then from there we will do the expansion of Europe.”

Perhaps the biggest cultural challenge the company may face will be the concept of shawarma. In the UK, the spinning stick of meat is synonymous with Turkish ‘donor kebab’ and — perhaps more worrying for the company that is trying to market itself as the clean alternative to grimy street shawarma — is closely affiliated with drunken nights. But Chabtini, ever the optimist, believes he can change British attitudes.

“People will always relate to shawarma as donor kebab. We have studied the market in London and one of the [points] was ‘Shawarmanji’ might be a name difficult to pronounce. People might not understand shawarma,” he says. “So we said ‘…Why is Häagen-Dazs easier to pronounce than Shawarmanji? Because Häagen-Dazs paid billions of dollars for you to get used to the name’… so it depends how we would market the brand.” Among the other plans to appeal to a European market is a new menu, with lamb being added to the beef and chicken options. As with the launch in Lebanon, which the company preceded by spending more than $180,000 on market research, they are carrying out extensive analysis on London’s incredibly competitive food and drink market. “We are not worried about the concept not working; we just want to make sure that the operation in London is going to be smooth for us to grow.”

But among the positivity is a note of caution as Chabtini says he is not yet willing to give any numbers about revenues. Perhaps this is understandable, since the company is still in its infancy, but it does stir up doubts. “We have very good numbers,” he says. But, he adds, “I prefer to reveal something when I am at least one year old, rather than giving figures that are just six months or eight months old.” He is, however, willing to stand by his previous prediction of $50 million in revenues by the end of 2015. “I think it is going to be doable with our franchises. It is very easy. If we have 50 shops by end of 2015, that’s $50 million,” he says.

Fast food, fast profits?

Franchised or stand-alone, not every fast food outlet turns over $80,000 a month, otherwise Europe and the Middle East would have many more millionaires. With no numbers yet released, it is difficult to assess Chabtini’s claims, but if he even gets close to his optimistic predictions then Shawarmanji will be very big indeed. “We believe Shawarmanji is going to be what sushi was in the early 1990s, which was the fastest growing food [business] ever.”
 

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