3 factors to consider while setting up a Restaurant in Dubai - IBG Consulting Dubai

3 factors to consider while setting up a Restaurant in Dubai

October 17, 2017by admin

As a premier destination of delicious culinary delights from all around the globe, Dubai has always welcomed the food sector as a cultural plus for its massive expatriate community of over 200 nationalities. During the last decade, tourism in UAE has been greatly complimented by the presence of global & local Food & Beverage (F&B) brands served by nearly 16,000 restaurants in Dubai alone.

Food & Beverage Market in UAE
Once all the questions related to how to open a restaurant in Dubai are answered and the outlet is up & running, the opportunities for business are endless. As locals and the expat community actively indulge in newer cuisines and foreign food specialties, the food and beverage market in UAE becomes a gold mine for entrepreneurs and investors to reap profits from and grow more.

Statistically, Food Sector ranks among the richest and the most rewarding business activities in Dubai. However, opening an independent food and beverage outlet is a difficult venture to keep afloat than it is to invest in other well-rounded business sectors in Dubai.

Even though there have been nearly 2000 restaurant openings in Dubai last year, food outlets are failing to engage their target audience in a meaningful way and get repeat customers. Food shops such as restaurants and cafes require heavy capital investments to afford proper decor, advertising, and maintenance. Knowing it’s risk that can turn the tide either ways, companies practice caution when introducing a foreign food chain or new cuisines in the Dubai’s market.
Presently, entrepreneurs and businesses in Dubai are investing their time & effort in a number of factors that determine if a food venture will succeed or not. These factors can be fundamentally summarized into market research, cost control, and site selection.

  1. Cost Control

Managing financials is an imperative process to look after when opening a food outlet in Dubai.
Poorly negotiated lease agreements, compromised pricing structure, and unspecified target niche can severely impact the company’s ROI.

Rising Rents
As the World Expo nears, UAE is experiencing a transitional phase which has caused property prices to soar while raising rents on leasable estates. Businesses are therefore advised to carefully understand their tenancy terms before deciding on a space to begin their venture.

Rising Food Costs
Secondly, prices of basic commodities sometimes increase so gradually that it becomes difficult to notice. Recently, fresh vegetable prices have gone up by two to three dirhams per kilo in markets, which when summed up for restaurant bulk purchases can significantly impact the cumulative bill.

According to expert analysis, Dubai’s Consumer Price Index (CPI) has increased 1.1% since the last three months.

Price Sensitive Customers
Lastly, increasing number of price-sensitive customer niche has also raised alarms for restaurant businesses. Growing number of fine-dining F&B options has had an adverse impact on the demand and supply curve, sending the price conscious category of consumers away from food outlets.

  1. Location Control

Selecting the right space and location holds a deciding role in the food business’s ultimate success. A poor choice in location can directly affect accessibility, visibility, parking space, footfall, and the overall exposure a restaurant, café, or any other food outlet needs to attract customers within its radius.

Finding a Good Location in Dubai
Dubai as whole is a populated and profitable city to start a food venture. However, leading a business into a city that appreciates rich taste in almost all types of food must be met with proper research on cultural density, average earning and other demographics. A good location for a day to day food selling business is ideally characterized by target consumer abundance, accessibility, flexible leasing options, top class infrastructure, tax-free benefits and other forms of specialized incentives.

Entrepreneurs and new businesses can get first-hand insight about good locations through a professional business setup consultancy agency. Such company formation firms handle A-Z business setup process in affordable deadlines and accurate time frames.


  1. Innovative solutions in the Food & Beverage sector.

Social engagement:
Recent surveys indicate that when it comes to choosing an option for dining out, consumer behavior is strongly influenced by various social touchpoints, both online and offline. Online ratings, reviews on food apps such as Tripadvisor, Zomato and social media platforms including facebook, twitter or Instagram have a strong influence on customers. Apart from online engagement, F&B businesses should also look for offline platforms such as food festivals to reach out to the target consumers.

Technical innovations:
Once the food business setup is complete with all the factors such as location, costs, online presence taken care of, other in-house solutions can be looked at to ensure that once the customer has reached the outlet they have a completely satisfying experience. These innovations could range from having top notch service standards, including various food options in the menu such as DIY (Do-it-Yourself) options, organic food choices, street food options etc.

How Can IBG help with Your F&B Business Setup
Any type of company formation in Dubai requires a strong foundation and in-depth knowledge of the local market with excellent business acumen. As IBG Consultants UAE, we facilitate and assist you in all stages of opening a restaurant in Dubai, from company licensing stage of your food business, to its first opening day in Dubai. Our experts are well versed in company formation process for all services industry businesses throughout all zones in Dubai.

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