International Franchisee Brings Dave’s Hot Chicken to Middle East

International Franchisee Brings Dave’s Hot Chicken to Middle East

02 Apr 2022 - Walid Hajj couldn’t stay away. Though the founder of multi-concept franchise operator Cravia sold a majority stake in that company to sovereign-backed private equity firm Fajr Capital in 2016—a stake “worth about $250- to $300 million”—it wasn’t long before the restaurant industry called him back. “I guess it stays in your blood, this business, so you have to come back,” said Hajj, who in 2001 started with one Cinnabon in an Abu Dhabi mall and grew the Cravia portfolio to more than 100 locations across Cinnabon, Seattle’s Best Coffee, Five Guys Burgers and Carvel. Fajr Capital, which has investments throughout the Middle East and Southeast Asia, later acquired Hajj’s remaining 20 percent stake. His latest undertaking is Lavoya, based in Dubai and now with three restaurant concepts after Hajj signed a deal to develop Dave’s Hot Chicken in the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman. His agreement calls for 31 locations as Dave’s joins Joe & The Juice, a concept out of Copenhagen, and Barbar, a Lebanese street food brand, under the Lavoya umbrella. “There is a taste for spiciness, for hotness in the region,” said Hajj of why he believes the concept, which specializes in hot chicken tenders and sliders, will appeal to local consumers. “There are some home-grown concepts that are trying to replicate Dave’s, but they’re not even close with the quality.” Hajj founded Lavoya in 2020 with Fahad Alhokair, nephew to Fawaz Alhokair, a Saudi Arabian billionaire and co-founder of Fawaz Abdulaziz Alhokair Company (also known as Fawaz Alhokair Fashion Retail). That company is the largest franchise retail operator in the Middle East with more than 1,700 stores across 12 countries. Brands within their portfolio include Zara, Aldo, Mango and Nine West, among others. Lavoya, noted Hajj, is a separate entity, and Fahad Alhokair brings to the partnership experience in franchise development and operations. He is also the founder of Veda Holding, a private equity and venture capital firm based in Riyadh, Saudi Arabia, that invests in fashion, retail, real estate and food and beverage companies. Hajj’s and Alhokair’s combined experience played a big role in Dave’s Hot Chicken moving forward with development in the Arabian Gulf region. Still an emerging brand in the United States, with 48 units open, Chief Development Officer Carolyn Canady said the company is taking an opportunistic approach when it comes to international expansion and wasn’t actively looking to enter markets in the Middle East. “Then we met this awesome operator,” Canady said of Hajj, who connected with Dave’s CEO Bill Phelps after visiting restaurants in the Los Angeles area. Knowing that Hajj scaled other franchises and has the operations team in place at Lavoya to do it again helped seal the deal. On the corporate side, while Dave’s doesn’t have a dedicated international development team, many members of its operations and training staff came, like Phelps and Canady, from Blaze Pizza. At Blaze, where Canady was president of international development, she said they worked with Kuwait-based mega-franchise operator M.H. Alshaya Co. on expansion in the Middle East and the team can draw on that experience. The deal with Lavoya isn’t the first outside the U.S. for Dave’s Hot Chicken. It signed an agreement in 2020 with Obelysk Foods—owned by Toronto Raptors founder John Bitove—to open 30 units throughout Ontario and British Columbia. Three locations are open in Toronto. A need for better chicken “Before acquiring any brand, I have to love it as a consumer,” said Hajj, who because of pandemic-related travel restrictions wound up spending several months in L.A. in 2020, giving him ample time to get familiar with the Dave’s Hot Chicken menu. The brand also checked the “simplicity” and “ease of execution” boxes, he continued, which when combined with the potential he sees in the UAE and beyond for chicken concepts prompted him to pursue Dave’s. “McDonald’s sells more chicken than beef in the region,” he said of the protein’s popularity. “And there’s a need for a better chicken concept. It was the same with Five Guys, the region needed a better burger concept.” QSR giants such as KFC and Popeyes have dozens of locations in the Arabian Gulf region, as does Texas Chicken, the international version of Church’s Chicken. The chef pedigree behind Dave’s—co-founder Dave Kopushyan worked under Thomas Keller of French Laundry—and the food quality make it stand out, said Hajj. And it’s a “cool brand,” he added, which the younger population in countries such as Saudi Arabia are hungry for. Hajj is introducing Dave’s in Dubai with what he described as “two huge flagships.” The first restaurant is under construction at the waterfront Jumeirah Beach Residence, “a corner location by the beach, great exposure and one of the most visited for a touristic population,” he said. The second is in the Motor City area, which Hajj said is “not as touristic, but among the most dense residential and commercial areas in Dubai.” Motor City is also one of Dubai’s top delivery zones. “We keep delivery in mind all the time,” said Hajj, who expects that channel to account for a large portion of sales. The brick-and-mortar presence is crucial, however, to establishing the brand. “Dubai is an international showcase for the brand and for us as franchisees,” he said, then later added, “We want to launch the brand with a big splash.” As Hajj prepares to open the first restaurant in June, he’s closely monitoring global supply chain shortages and said he expects “direct and significant price increases across the board.” “If there’s anything making me nervous, it’s supply chain,” he said, though being able to lean on his past experience and relationships helps temper the anxiety. There are several large chicken producers in the region, he added, which should ease some of the pressure. He’s committed to giving customers the same experience they’d get at a Dave’s Hot Chicken in L.A., even if that means higher costs in the beginning. “My take, we don’t save a penny on anything to make sure that we replicate the whole experience in Dubai,” said Hajj, who’s even importing the same chairs. “Then once you’ve established the brand, you start becoming more efficient, localizing the equipment.”

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