Stellar Eastern Franchise & Retail Advisory has over three decades of hands-on experience and extensive networking in the UAE, regional, and global franchise sectors. They specialize in crafting and implementing innovative franchise and retail solutions. Their approach is rooted in professional advisory, project execution, education, and training. Shaped by encounters across five continents, our unique insight into the dynamics of successful franchising guides our strategies. Embracing the wisdom of Zen teacher Shunryu Suzuki, they maintain a beginner’s mindset, allowing for a fresh, unbiased perspective. In a rapidly evolving world, Stellar Eastern excels in delivering inventive solutions untainted by conventional biases to meet new challenges head-on.
In this interview, let us unravel what drives Sanjay Duggal – Founder & CEO of Stellar Eastern Franchise & Retail Advisory and his firm towards excellence.
1. How did you enter the franchise business?
A major group of companies I previously worked for in Abu Dhabi decided to diversify into food & beverage and retail. As a result, I started traveling the world to explore franchise opportunities. After being hosted by multiple franchisors across the globe with unfettered access to their systems, I was hooked on the methodology of franchising.
Subsequently, my company acquired the GCC Master Franchise for Durango, Colorado based Rocky Mountain Chocolate Factory – Americas largest chocolate franchise by store count.
We also acquired the UAE development rights to Applebee’s, the world’s largest casual dining franchise.
I managed both franchises
2. What are the services that you provide to your clients?
Franchise Development
Franchise Education/Coaching
Comprehensive review of draft franchise agreements
Due diligence
Troubleshooting
Concept development (with a view to franchise down the line)
3. What are the criteria that you look for in a franchise brand to be part of your clientele?
- Sound basics in their franchise system
- Alignment of core business values
- Compatibility of views on franchising at large
- Room for a tangible contribution and value addition from our end
4. What makes your organization different from your competitors?
Unlike our competitors, we don’t tend to focus on brokerage. Our primary focus in on helping franchisors and franchisees navigate franchising challenges as effectively as possible.
For existing or prospective franchisees, this includes recommending franchisors, negotiating agreements and operational set up assistance. For independent businesses, it’s about assessing franchisability and developing their A to Z documentation.
For franchisors, it’s more about micro level UAE/GCC knowhow, and vetting prospective franchisees.
We also place a lot of emphasis on franchise education in universities, incubators, government agencies and investment groups.
5. What are the essential qualities that your clients look for in a franchisee?
In the past (10+ years ago and beyond), it was essentially financial capacity of the franchisee. The assumption was that if the franchisee has the means, the rest can be managed. This was also because demand for franchises was higher than the supply.
Increasingly however, the franchisors have come to understand that money doesn’t necessarily co-relate with ability or integrity. And these are the two elements they seek evidence of.
6. How long does it take, in an average, for your franchisee to realize their investment?
That varies significantly. In some cases, the relationships have gone south or even ceased to exist before the investment is realized. The relationships tend to sour due to perceived insufficient support from the franchisor or misleading earning claims.
A very rough average investment realization would be 2.5 to 3 years
7. What was a major challenge you faced in your career, and how did you overcome it?
In acquiring a premium chocolate franchise from overseas, our key area of concern was that in the UAE/GCC, premium chocolate is first a gift, then a confection. As a result, chocolate stores are full of extraordinary boxes, trays and containers made of the finest materials. This is how bulk of the chocolate is sold, usually in small bite sized wrapped pieces.
Even though the American business model wasn’t quite the same, we were assured that they would have special R&D for product and packaging development for our market. But they fell short.
Consequently, we were left with operations where all the major “cost meters” were running without the ability to optimize sales. Moreover, we were beginning to understand that the franchisor had committed beyond his capacity to innovate. As a result, we had to develop our own product and packaging range from scratch. The franchisor formally endorsed this product range and sales increased by 250% in no time. Plus 5 more stores were opened based on these products.
This isn’t what franchising is about, but we were able to salvage the investment and the relationship with this highly proactive approach.
7.1 What is your best achievement?
A few years ago I wrote an article on Linkedin titled “An open letter from a Gulf investor to the international community of food franchisors”. In it I addressed the grievances that investors from this part of the world had against international franchisors.
A few days later, I received a call from the IFA. They had read the article and said the points in my article covered exactly what they’ve been telling franchisors for years. As a result, they were delighted to read my article and wanted permission to publish it in their magazine “Franchising World”. The vote of confidence coming from the world’s definitive franchising body is right up there with my best achievements.
8. How does your business day start?
My business day starts with several digital brain exercises. This helps me keep my top asset in the best shape to take on rest of the day. That’s usually followed by responding to correspondences and working on current assignments.
9. What was your best moment throughout your franchise career?
It was a particular moment but an entire week. I was hosted by a confectionery franchise in Sydney, Australia for an entire week. This company had grown quite rapidly in short burst of time and was doing a lot of things right. The franchise education I received in that one week was profound and has stayed with me ever since.
10. Where do you see your brand in the next 5 years?
I see Stellar Eastern having made deep inroads in the franchise education space through multiple verticals.
11. Any tips you want to impart to our readers who want to be in the franchise industry?
Franchising is essentially a methodology to expand a business. The “industry” part is used for convenience but is technically a misnomer. I emphasize this so that one can avoid getting swayed by cliched brand and “industry” narratives, and single mindedly focus on “what’s in it for them”.
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