Time and again we hear of Lebanese having more success at home than abroad, so often that it is starting to become a cliché. Yet like most clichés, there lies a strand of truth behind stories of their successes. The case of Just Falafel provides yet another telling example.
The firm, founded in 2007 in the United Arab Emirates by Lebanese-British entrepreneur Fadi Malas, is making a big name for itself globally. By taking humble Lebanese falafel and marketing it as a clean and healthy alternative to fast food, the company has brought it to new markets — primarily the Gulf but now also the United Kingdom, North America and soon to be India. So far the group says they have over 1,000 franchises in 19 countries worldwide, while profits doubled to $3.5 million in 2012. An initial public offering is rumored to be in the offing, which Malas says would help boost their rapid global expansion.
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The company’s growth has been built on a mixture of aggressiveness and clever marketing. On the advertising side, they have shunned traditional routes in favor of online and particularly Facebook — where they have invested heavily. More fundamentally, however, the company has set themselves the target of rapid growth. In the UK, rather than aiming for a gradual approach they are planning to have 200 stores by 2017. All this has given the impression of a rising force in the food industry, with the company being featured in major Western media outlets including the Financial Times and the BBC.
All of this optimism about the firm’s global growth is somewhat tempered by its Lebanon figures. Just Falafel opened four stores in the country last year, with the modest target of eight by the end of 2013. Even that, admits Safa’a Fares, storeowner and franchise communication manager, now looks to be out of their reach. While a fifth store is due to open later this month in Beirut’s southern suburbs, Fares says the others have been yet more victims of the economic climate.
“They are postponed,” Fares says, citing the planned store in the southern city of Saida, which has been host to numerous clashes, as an example of how politics is bleeding into their business model. “The political situation affected the economic situation, the economic situation affected our decisions in making things happen quickly. So we are taking it at a slower pace.”
The company, she says, is not abandoning the country that claims — contrary to what its neighbors believe — to have spawned falafel, but they are shelving major expansion plans. “Our concentration now is targeted outside Lebanon until things are more settled here and people are ready.” Though Fares says the company are still aiming for 25 stores in Lebanon eventually, it will be a “couple” of years before they push for growth, looking to Canada and the UK to make up the difference.
There are other reasons why perhaps growth in Lebanon might be harder to come by than in other markets, particularly competition. Unlike in the West and other markets, the franchise is competing with hundreds of other traditional falafel stores. “We have a lot of resistance from the people living here — they think that falafel is being invaded and they want to protect their heritage,” Fares says. “They don’t understand that it is our heritage…that we are not competing with falafel, we are falafel.”
But while competition with local companies is clearly a factor undermining growth, other firms such as Shawarmanji have shown that it is possible to repackage a classic Lebanese dish successfully in Lebanon. The fact that Just Falafel is backtracking is perhaps yet another indicator of the weakness of the economy.
Even Fares herself is setting her sights on other markets. She has recently been appointed the responsibility of taking the franchise to Turkey, where they have one store and are aiming for five more by the end of the year. “It is a great market, they all eat meat there — they don’t have any vegetarian options,” she says.
With an aggressive growth strategy, Just Falafel looks set to keep expanding in the coming years. How big they can get is a matter that will ultimately be decided outside Lebanon — in the new markets they are targeting. The plans are certainly grand. “I think if you ask our CEO he would say we are aiming for 100,000 [stores],” Fares says. “Every two or three months he puts a new target for us…we are not going to stop.”
Unfortunately, for their Lebanese branch, however, while they may not have ground to a halt, they have at least put the brake pads on.