- 1 - August 7, 2012 First U.S. franchise opens in Libya By Kendal H. Tyre and Diana Vilmenay-Hammond After two years of planning and one false start, U.S.-based baked goods chain Cinnabon became the first U.S. franchise to open a store in Libya on July 2, 2012. The franchise will sell signature Cinnabon products alongside Carvel-brand ice cream and cakes. Focus Brands International owns the Cinnabon and the Carvel brands. The 7,500-square-foot bakery-cafe in downtown Tripoli is located in the city’s business district and was originally set to open in early 2011. A shipment of product was already on its way but the launch was scrapped when the Libyan civil war broke out which ousted former leader Muammar Gaddafi and sparked bloody protests. In addition to the traditional menu items, the Tripoli location will offer a wide variety of locally created sandwiches, salads, and other baked goods as well as cakes and pies that are imported from Italy. The company began considering an expansion into Libya two years ago when U.S. sanctions on the country were easing. The company had received numerous franchise inquiries from Libyans living overseas. Ultimately, the brothers Arief and Ahmed Swaidek opened the co-branded location as franchisees. They plan to open 10 more Cinnabon locations in Libya over the next five years, with another one coming later in 2012. They also plan to open more Carvel units and have also signed on to bring Moe’s Southwest Grill locations to Libya. According to the company, in the first week of its opening, the Tripoli Cinnabon store logged $45,000 USD in sales. Cinnabon has over 900 locations in 51 counties, including most Middle East markets. The brand is looking for franchise partners in other North African countries such as Algeria, Tunisia, and Morocco. It also joins other foreign franchisors entering Libya. BurgerFuel Worldwide, a New Zealand gourmet burger company, announced the opening of its first unit in Libya in March 2012. The company exports New Zealand beef into the Middle East and North Africa to service its branded stores in those regions. California’s Johnny Rockets has already sold franchise rights in Libya, although it has not begun operations there yet. - 2 - Libya has 1,100 miles of coastline on the Mediterranean where 80 to 90 per cent of Libyan residents live. It has some of the region’s highest GDP and HDI (the UN’s Human Development Index) rates, along with its substantial natural oil reserves. For more information about franchise trends in Africa, please contact your Nixon Peabody LLP attorney or: Kendal H. Tyre at [email protected] or (202) 585-8368 Diana Vilmenay-Hammond at [email protected] or (202) 585-8298 Kendal H. Tyre is a partner and Diana Vilmenay-Hammond is an associate in the Washington, D.C., office of Nixon Peabody LLP. They are the editors of Franchising in Africa: Legal and Business Considerations. The book, published by the LexNoir Foundation, is a reference tool for practitioners, business people, and academics. It focuses on the drafting of the relevant documents, the financing of franchise transactions in the region, and the local legal issues in selected African countries— Angola, Botswana, Cape Verde, Egypt, Ethiopia, Ghana, Mozambique, Nigeria, South Africa, Tunisia, and Zambia. Click here to view a video book trailer..