While McDonald’s might be striving to maintain its dominant position in other parts of the world, the owner of the fast food giant’s Jordanian franchise says business has never been better.
By Dina al-Wakeel
Last year, McDonald’s reported falls in both net income and revenue globally as the company scrambled to adapt to changing eating habits, as well as economic and political uncertainty in key markets such as Europe.
But Armoush Tourist Investment Company, the owner of the McDonald’s franchise in Jordan, appears to be bucking the trend. The company’s Chairman Ahmed Armoush said he plans to more than double the number of McDonald’s restaurants in the Kingdom over the next four years to meet growing demand.
How big is the Jordanian market for McDonald’s?
Compared to the Gulf, we are a relatively small market. We have 24 stores here, while Kuwait has 64 and Dubai has 120. But for McDonald’s, each market—however big or small—is a priority when it comes to representing the brand and providing consumers with top-quality products. What’s important for us is reaching a large number of diverse customers across Jordan, not only in West Amman, but in East Amman, Irbid, Aqaba, Al-Salt, Zarqa, and throughout the Kingdom.
How many more McDonald’s restaurants are you planning to establish here and how has your growth been?
At the beginning, in 2000 and 2001, the business was negatively affected by external causes. Today, our transaction growth for customers visiting the restaurants grows at a rate of around 15 percent annually. The Big Mac is the most popular meal in Jordan and worldwide. On a daily basis, we have more than 25,000 visitors; this figure doubles during the holidays. In the coming four years, we are planning to reach a total of 50 restaurants across the country.
McDonald’s has been in Jordan for 19 years. What challenges did you face over this time?
We had a great start in 1996, although we faced some enormous challenges along the way. At the time, we weren’t bringing in the normal sandwich shop that Jordanians were accustomed to; we helped change the food culture in terms of quality and customer service, and most importantly, we promoted the idea of employing Jordanians in this field. Due to the cultural taboo of working in fast food restaurants, these jobs were mostly filled by foreign workers. That was our biggest challenge: How could we convince a large number of Jordanians to start working in this field? But we managed to do that by providing training, which we spent a lot of money on; by demonstrating respect; and, most importantly, by helping Jordanians realize that this sector can help them develop and grow professionally. Our next challenge was figuring out how to cooperate with the government. At that time, the Labor Law prevented us from hiring students, and we faced issues with importing and customs, and other red tape dilemmas. Construction was another issue. We had special requirements for our stores, based on international standards. But we managed to succeed; we started off with 110 employees, today we have reached 2,200 employees, all of whom are Jordanians.
There’s a growing trend of healthy eating in the country. How can McDonald’s cater to this growing segment of clients?
We aim to provide the best quality ingredients for our customers. Nothing we serve has extra fat or additives, including our meat. We also offer healthy dining options, like salads, fish, and chicken, and we don’t sell soda products to kids, instead providing them with milk and juices.
But do you try to change the perception of McDonald’s as a junk food restaurant?
We would never consider ourselves to be a junk food chain, because the meals we serve are made from fresh, nutrient-rich ingredients. There’s this misconception that food can’t be both fast and healthy. McDonald’s is a quick-service restaurant. You can eat in 15 minutes and then go back to work. We strive to be convenient and affordable, but we also strive to get the best ingredients from around the world.
High-quality gourmet burgers are another growing trend in the Kingdom. How can you compete with that?
We don’t. I don’t think that they pose any competition for us. It’s a matter of taste; some people prefer to buy a burger that costs JD10, while we sell ours at JD2. Both products use the same quality of meat. The meat we use is top-quality Australian beef; the burgers are then manufactured by Nabil Company for Food Production in their factory. We do our best to work with as many local suppliers as we can, and around 85 percent of our suppliers are local. We have farms in Jordan that produce our tomatoes and lettuce. Everything we use in our food gets thoroughly tested, and requires international approval.
2014 was a bumpy year for McDonald’s worldwide; sales decreased and there have been issues with the company’s reputation. Have these issues had any effects on your work in the region?
What’s happening globally does not reflect on our region. As a local franchisee, McDonald’s sells us a system, strategies, and plans, and our implementation of these has been very successful. In 2014, we received The Golden Arch Award for the first time in the Middle East. Only one percent of McDonald’s franchisees have ever received this award. We are also currently registering a charity organization, the Ronald McDonald House of Charity, in Jordan. Through this, we will be able to make direct contributions, both from ourselves and our partners, to support underprivileged families and children in Jordan.
The reputation issue you refer to was regarding a factory used by one of McDonald’s suppliers for the Chinese market; the supplier immediately apologized and stopped dealing with the factory in question. It was a firm decision, and many procedures were put in place to ensure that a similar incident doesn’t happen in the future. New procedures were introduced to link all the factories to McDonald’s via cameras, and the entire company has taken time to reaffirm its food safety and quality assurance measures. McDonald’s takes matters like this very seriously, and will not let one isolated incident tarnish the company’s long history of excellence.
You recently opened Jordan’s first McCafé. How important is it and how successful do you think it will be?
McCafé is now open at our new Al-Madinah branch. At McCafé, we serve 10 to 12 types of coffee, cakes, and cold drinks. These choices are available at other coffee shops and restaurants, but you’ll find them to be at least double the price. McCafé started in Australia a few years back and the current trend is to expand this concept in the Middle East. In no time we will have at least 10 McCafés in Jordan, and we are even converting some of our older stores into McCafé branches.
What we think is different than what we plan. We are introducing this new service to our Jordanian customers in the hope that they will try it and enjoy it. We’ve done the same thing with the breakfast service. It was a big challenge, but we have succeeded in convincing people that we are serving what they eat at home: Halloumi cheese, pancakes, eggs, and orange juice, at cheaper prices. We have reached the target that we set for the first year: above 6 percent of sales.
There has also been a debate regarding the salaries that fast food chains pay their employees and not abiding by the minimum wage. How do you pay your workers?
We don’t pay the minimum wage, we pay higher. Our full-time employees receive good salaries, along with health insurance, food support, clothing, and training. For the Jordanian economy what interests us is one thing: hiring students who need the training and the money, and providing them with training. We are teaching them not how to make a burger, but how to deal with their peers, with customers, how to smile, clean, how to become a pioneer in life, and we provide them with an opportunity that improves their self-esteem. If by the time they graduate they decide that they want to remain in our company, they will have the chance to grow to become a manager and even move elsewhere in the region or the world. We have around 1,400 students working with us now; this number changes seasonally, as we have more student employees during the holidays.
We are currently constructing a new building where we are considering dedicating a floor to staff training.
What are the future plans for McDonald’s in the region?
In the next five years, McDonald’s plans to introduce 1,000 new stores across the Middle East, including Cyprus, Turkey, and Pakistan.
We are also trying to manufacture our cardboard products locally to support the economy, instead of importing them. We are helping some companies not only to provide us with products in Jordan, but also to export their produce to other markets. We are also looking at furniture stores here to manufacture our furniture, instead of importing it. The moment they are approved, then they can export to McDonald’s stores worldwide. We want to maintain quality while improving upon our products. To date, 14,000 Jordanians have worked for McDonald’s, some for a couple of months, others for years. That’s something we are very proud of.