Shatranj Capital Partners tap into F&B franchise funding
Shatranj Capital Partners (SCP) is being set up to focus exclusively on multi-unit franchise F&B by leveraging the benefits of private equity and a team of partners and advisors behind its’ MENA-based Private Equity fund.
The Middle East has always been regarded by iconic F&B brands as an incredible opportunity for international expansion. Consumer enthusiasm for foreign brands is high, driven by an open minded, young population and a culture that is excited to try new foods and experiences. However, many foreign F&B brands have struggled to gain traction in the region. While the cultural nuances between foreign franchisors and local franchisees contribute, in part, to this dilemma, the root cause is more straightforward.
Like any business venture, investing in a franchise requires funding to purchase the rights to operate as a franchise, lease equipment, secure inventory, grow the business and more. Not many people have the necessary amount of funds just lying around.
According to Samer Hamadeh, founder of Big Mouth Concepts, pointed out that "usually franchising development costs are on the brand owners so it can be cost-prohibitive". Just developing a world-class franchise manual can run into the 6 digit cost. A fund like SCP would be useful for brand owners like Hamadeh.
Commenting on the launch of SCP, he said, “I think access to funding will push a lot of founders to give it a shot. Aspiration is a powerful force and this fund rewards that attitude if the founders are willing to push their brands to the next level. Dubai is shifting to a brand export mentality and that is absolutely going to be a gamechanger.”
Mazen Kanaan, CEO and co-founder of House of Pops, agrees with Hamadeh. He added, “the opportunity in F&B is huge and many concepts are emerging.”
The SCP fund plans to attract foreign direct investment to MENA, leveraging the global relationships it possesses in both F&B and asset management. SCP will adhere to global standards in corporate governance, operational excellence, and regulatory compliance, all while introducing exciting iconic brands to the consumers of the region.
SCP includes individuals whose pioneering F&B accomplishments in operations, brand building, and supply chain technology have been replicated globally. They have scaled F&B businesses in the US, MENA, Europe and Southeast Asia as entrepreneurs and as franchisors, building expansive networks and knowledge along the way.
The Managing Partners for SCP include Peter Schatzberg, founder of Sweetheart Kitchen, Brandon Guthrie, former Wendy’s Head of Finance for APMEA, Jeremiah Green, former CEO, CTO and Operating Partner in Private Equity, and Patrick Speek, an executive with 30 years of experience across listed US multinationals who set up Greenfields in eight MEA markets.
The SCP team is also represented by local M&A, investment banking, and Private Equity expertise. Regional experts include Mohammed Al Madani, Chairman & CEO of the Al Madani Group of companies; Micah Phelps, Private Equity Investor at QIA; Saim Korlu, Managing Director at Prospera Capital Partners; David Huesser, former real estate executive with Al-Futtaim, Nakheel, and Apparel Group; and Marcus Potter, Managing Partner at Circulus ME.
By leveraging these regional F&B expertise and global franchisor relationships, SCP is promising to create value through operational excellence, enhanced governance, and digital innovation, while taking advantage of one of the most extraordinary F&B executive teams ever assembled.
Hamadeh added, “We are already pushing Akiba Dori outside of the UAE so we’ve done all the ground work. But I would still definitely have a sit down and a chat with the team at SCP – they’re industry heavyweights and have a ton of experience so I’d struggle to find an operator who wouldn’t want to explore it.”
While Hamadeh and Kanaan think the idea of the fund is great, Kanaan unlike Hamadeh is not exploring funding options for his franchise plans.
He said, “We are not really looking for funding, as we source franchisees who have money. We already have developed the entire program and have everything ready and started franchising already.”
With the majority of MENA based privately held companies operating as diversified entities and participating in various sectors and geographies, F&B holdings are usually not a core focus of MENA based groups. In contrast, successful F&B brands in the US are typically run by F&B focused Private Equity, where a team of experienced F&B operators and investment managers achieve profitable growth by leveraging the benefits of professional asset management.