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Broccoli’s bid for world domination

Broccoli, an Italian restaurant born in the UAE, is trying to become the largest operator of restaurants in the country.

Broccoli’s vice president, Khalid Odeh, says the company plans to achieve this through a combination of fresh ingredients, live cooking, and most crucially: affordability.

Odeh says Broccoli’s prices are noticeably lower than other restaurants providing similar food. A quick review of restaurants around Dubai indicates that the average price of a pasta dish in the Downtown and Shaikh Zayed Road area is Dh62. Comparably, the average price of a pasta dish at Broccoli was half of that, costing Dh30.

Broccoli is also hoping that affordable prices, especially with Dubai residents concerned about rising prices, will help it deliver the right concept at the right time.

“We are not making a loss, we are making a profit. But we are not hungry to make, like, 300 per cent profit. We are reasonable,” Odeh, an Emirati, told Gulf News in an interview.

“The food is very affordable to everybody, it’s not expensive. It’s high class and fresh, but it’s also affordable.”

Odeh says Broccoli has not increased its prices since it first opened its doors in 2014, and that the company had even reduced some its prices following the introduction of the Value Added Tax in the UAE on January 1, to encourage people to continue eating with them.

The firm says that its mission is not only to have cheap food, but to make the franchise licence affordable too. According to Odeh, the first licence costs around Dh45,000, with the second one costing Dh36,000.

The executive says he wants to keep franchise fees significantly cheaper than his competitors. Plus, he says, Broccoli offers its full support and commitment to all franchisees.

“That’s why we are expanding, that’s why people are buying franchises from us,” Odeh said.

Broccoli currently has 48 franchised restaurants currently operating across the UAE, and 101 worldwide, with 54 more properties currently under construction, the majority of which will either be in the Emirates, or Saudi Arabia. A further 200 franchises are currently in the planning or design phase.

Perhaps most interesting, however, is where Broccoli has been able to expand internationally.

The UK currently has two Broccoli restaurants, one in Manchester and one in Covent Garden, a prime location in London. According to Odeh, the UK’s third restaurant, located in Cambridge, will open in mid-February. The company’s website lists an additional five cities in the UK that will soon see Broccoli restaurants open.

India’s first restaurant will open by the end of February, Odeh said.

As a result, Odeh claims that the company was one of the top 100 fastest-growing franchises in the world last year.

But history is littered with examples of franchises that have expanded too quickly: Krispy Kreme, Starbucks, and Baja Fresh all suffered major rollbacks in store numbers after over-reaching.

Broccoli says it has learnt from these case studies. So how can it avoid making the same mistakes?

“The good news is, we are concerned [about expanding too quickly],” Odeh said, adding: “So what we’ve done since the beginning is have a full plan for our expansion.”

To avoid stretching itself too thin, Broccoli’s executive says that the company sits with its franchising adviser, Francorp, one of the largest consultancies of its kind in the world, at least twice a year to conduct a health check.

“This health check is to see if we are growing too fast, and to see if we have shortages of coordination, or support, or staffing. Based on that check, the consultant gives us a feedback, and we have to make sure we fulfil that feedback,” Odeh said.

“The answer from the consultant is that this concept will work all across the world, as long as we stick with the strategy,” Odeh added.

And what about an initial public (IPO) offering? Surely listing on the Dubai Financial Market stock exchange, or the Abu Dhabi bourse, would be a crowning moment for this Emirati company?

According to Odeh, the study Broccoli conducted with Francorp between 2011 and 2014 before launching the first restaurant found that 80 per cent to 90 per cent of franchise companies that IPO, go bankrupt within a very short period.

“There is no plan, at all, to IPO… we don’t want to do it,” Odeh said.

For now, the chief executive is coy on whether the company is already the most successful UAE-founded restaurant chain in terms of the number of restaurants opened.

“The numbers…,” he said, trailing off.

“We are biased. We don’t know. Our objective is just to be number one.”

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