Pakistan is located in the heart of Asia surrounded by China, India, the financially liquid Gulf states, the energy rich Central Asian states and the economically advanced Far Eastern tigers. Pakistan’s strategic advantage alone makes it a marketplace full of opportunities. It’s a country of over 200 million consumers with an ever growing middle class that has a size-able disposable income to spend on Food, Apparel, Health, Education, Entertainment and other segments of Retail and Service industries.
- Pakistan is a rapidly developing country and is one of the Next Eleven, the eleven countries that, along with the BRICs,( BRIC” economies, Brazil, Russia, India, and China) have a high potential to become the world’s largest economies in the 21st century despite of internal political disputes.
- “Pakistan has made good progress in making its economy more stable in recent years,” says Illango Patchamuthu, World Bank Country Director for Pakistan.
- The World Bank’s updates on Pakistan Development said the country’seconomic growth accelerated to 5.3 percent in the 2017 financial year – the highest level in a decade – and could reach 5.8 percent in the 2019 financial year.
- The report features a special section on entrepreneurship with a young demographic and a growing labor force. Entrepreneurship will play a vital role in creating economic opportunities, increasing productivity and meet the challenges of stimulating growth and creating jobs, especially for women.
- On the demand side, private consumption made up almost 86 percent of GDP.
- In an effort to boost development, Pakistan and China are implementing the “China-Pakistan Economic Corridor (CPEC),” with $60 billion in investments targeted towards energy and other infrastructure projects.
- With a population exceeding 200 million people, it is the sixth most populous country in the world with 64 per cent people below the age of 30, according to a United Nations report.
- Pakistan produces about 445,000 university graduates and 10,000 computer science graduates per year, source Wikipedia.
- Pakistan has a large English-speaking population with more than 92 million Pakistanis having a command over the English language, which makes it one of the top English-speaking nations in the world. Source Wikipedia.
- urban population: 7% of total population (2017) according to Central Intelligence Agency U.S
- Pakistan’s Labor market is the 10th largest in the world and one of the largest producers of natural commodities, WB Report.
- Nation’s Young population has a high literacy rate with a modern outlook of life; they are very attracted to western ways of life and have a high Brand consciousness and awareness. The Trend of branding followed by the communities each level and driving the growth into a new level. In response to the opportunity, many Global Franchise brands not only gained profits from the market but achieved tremendous distinction in Sales figures at ASIA level.
Franchising in Pakistan
- The Franchise market of Pakistan Comprises of Restaurants, Hotels, Couriers services, Telecommunication, Cosmetic, Apparel, Footwear, Jewelry, Technology, B2B services, Education and Pharmaceuticals Brands and continues to expand.
- The realization of potential franchises began with successful arrival of Pizza Hut in Pakistan in 1993. In the last 20 years, many international brands have entered Pakistan and offered franchising rights to local companies or individual investors. Today this franchising phenomenon has really picked up pace and is tipped to match the growth of franchising in M.E and other parts of Asia.
- Major companies with franchise operations in Pakistan include McDonald’s, KFC, Pizza Hut, Marriott, Hardees, Sheraton, Subway, Day’s Inn, Best Western, Dunkin Donuts, Gloria Jean’s Coffee, Papa John’s Pizza, Nike Retail, Debenhams, Levis, Adidas, Caterpillar, The body shop, Mother care, Nando’s, Metro Cash and Carry, Hyperstar, Solitaire, Damas, GNC, Oracle, Microsoft, IBM, Domino’s, Burger King, Sarpino’s Pizzeria, Texas Chicken, Golden Chicks, Coca Cola, Popeye’s Chicken, Fatburger, Johnny Rockets, Doner Kebab, Sakura, TGI Fridays, Pizza Express, Bombay Chapati, Subway, Steak Escape, Butler’s Café, Cinnabon, Second Cup Coffee, Coffee Republic, Nestle, Coffee Planet, Mrs Fields, Juice Zone, Smoothie Factory, Solen, Hagen Daz, Menchie’s, Snog, TuttiFruitti, Yogenfruz, Red Mango, Cold Stone Creamery, New Zealand Natural, Marble Slab creamery, Monolo Gelato, Yogurberry and many more…..
- Currently, there are more than 200 Global Brands in the country; these Multinational firms have collectively invested over $2.5 billion in Pakistan and their cumulative annual revenue is around $4 billion. Approximately PKR 1.5 billion Paid by Franchisees every year as royalties
- The growth of Franchise market in Pakistan over the past two decades reflects the quiet transformation in a multi-tier domestic market. And experts see the trend deepening in the consumption-led economic growth in the country.
- Apart from Major entrants in place, there are still lots of white spaces where franchise is concerned. For Example FOOD Franchises, a Bloombergreport stated;
“Pakistan has the lowest fast food outlet to population ratio among 34 emerging markets with 0.55 outlets for every 100,000 urban residents.” (India for example has 1.33 and Turkey 4.15 outlets.)
Eating out will soon become a “necessity over the weekdays,”
- Yum! Brands plans to double its Pakistan stores to as many as 150 over the next five years and will list locally in that period.
- Foodpanda, backed by Germany’s Rocket Internet SE, expects to deliver meals to 2 million hungry Pakistanis each month by 2021 from about 400,000 now. The country’s food delivery industry will more than double to $2 billion by that time.
- The market is growing, people have more money to spend on fast food — we plan to open more outlets, there are big markets we haven’t even entered yet.” Local Franchise Brand source which has about 50 restaurants with most in Pakistan’s main cities.
- An unsaturated Franchising sector with high growth, high success rate, minimum competition and high returns is drawing the attention of major International Franchisors and Investors.
- With franchising gaining such tremendous popularity many prospective Franchisees feel, buying into an international franchise is a good investment because they gain a ready-made, proven business model with defined policies and processes, Ease to operate and likely to have a shorter ROI time.
- The most preferred model is a mix of Franchisee owned company operated & sub-franchised stores.
- Besides the Country Development plan’s, there’s huge demand for single unit franchise opportunities which may helps master franchisee to aggressively/strategically establish the brand nationwide.
- Franchisors / Investors who maintain an exposure with Pakistan understand that they’ll not be disappointed with the potential for upside in coming years, also this investment trend has given a boost to the franchising sector in Pakistan.
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