Kuwait - Country Commercial Guide
Franchise Sector

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-03-16

Overview

Franchising is being deployed with increasing frequency and today, almost any product or service can be distributed through franchising. The Kuwaiti market is highly receptive to the franchise business model. High per capita income, significant spending power, tax-free income earnings, and an upwardly mobile population serve to underline business opportunities here.

Kuwaitis are very familiar with U.S. brands and products as they frequently travel to the United States for tourism and education (approximately 10% of Kuwaiti high-school graduates study at U.S. colleges and universities). American franchises are warmly welcomed in this small, wealthy country.

Although approximately 75 U.S. food franchises are currently active here, there is always space for new brands with the opening of new shopping malls and entertainment areas in several areas of the country. In addition to the food sector, Kuwait is receptive towards retail franchises. American and European brands are leaders in this competitive market.

In recent years, Kuwait has begun to introduce new entertainment and educational concepts such as Make Meaning, Trampo, Sky Zone, Paintball, Color Me Mine and others in order to make shopping malls a prime  destination for families where they can enjoy shopping, food, and entertainment in one centralized location. There is  high market demand for quality education and training services. In order for a franchise to succeed in Kuwait, it must offer  flexibility in the concept to match the Kuwaiti culture and taste.

The U.S Embassy in Kuwait organizes several International Buyer Delegations to major trade events each year. This year, the Commercial Section has recruited a delegation of Kuwaiti buyers to the International Franchise Expo 2019 where they had the opportunity to discover new concepts and meet with the U.S franchisors interested in approaching the local market. In addition to the trade show, there were a variety of  educational workshops were also organized.

Market Challenges

Kuwait’s complex business environment requires flexibility, patience, and persistence. Many exporters and investors in Kuwait face challenges such as inconsistent, sometimes contradictory policies, lack of transparency in decision-making, and a judiciary that heavily favors the local population.

Kuwait is an expensive place in which to do business, largely due to the legal requirement to obtain a local partner. 

Kuwait’s laws stipulate that the Kuwaiti courts alone are responsible for adjudicating any disputes involving a foreign investor and other parties, although arbitration is permitted.

In summary, selecting a local partner who will work for you is the single most important step a U.S. franchise can take in Kuwait. Obtaining  competent local legal counsel to craft an agreement that protects your company from future liability is also critical. The best local partners are those who share both risk and profit with their American partners.

Advertising Methods

The use of social networks is high in Kuwait across all ages – even among older people. People use social networks for both  social and informational purposes. Among informational activities, the most popular actions include receiving news and information ranks highest, closely followed by exploring various links on social networks to direct users to external web pages.

Kuwaitis and Arab expats have similar usage of social networks. As for the social platforms, WhatsApp is commonly used across all nationalities, while Instagram, Twitter and Snapchat are popular among Kuwaitis, and Facebook is popular among expats.

In case of incidents happening in the country, Kuwaitis turn to Twitter, Instagram and WhatsApp for breaking news, expats turn mainly to Facebook.

For launching, promoting or advertising a product or a service and taking into consideration the  target audience, Instagram and Snapchat are the best platforms to reach the Kuwaiti population.

Web Resources

For additional information on the franchising sector, please contact Commercial Specialist Rasha Al-Muhtaseb at rasha.al-muhtaseb@trade.gov.