Dubai, United Arab Emirates (CNN)– George Bandar and Yara Abi Joudeh quit their jobs in the banking sector to establish a healthy salad restaurant. But what the two friends did not predict is that after a year the worst economic crisis in Lebanon will begin, with the explosion of the port of Beirut and further deterioration of the economic and living situation. The two young men decided to expand their work outside the country’s borders, specifically Dubai.
The case of George and Yara, as well as a large number of Lebanese. Some of them closed the door completely, and some of them expanded abroad to alleviate the suffering that the Lebanese live on on a daily basis in Lebanon, which is burdened with financial, economic and living problems that have continued since October 2019.
“We started in December 2018 as the first salad restaurant in Beirut. We found that there was a lack of healthy eating, so we started with this idea and it was a huge success,” said George Bandar, CEO of SALATA, in an interview with CNN Arabic.
He added, “We left our work in the financial sector in banks and we had no background on how to prepare food. After a year, Lebanon witnessed events that included popular protests, the economic crisis and the explosion of the port.”
Despite the competitive market in Dubai, George and Yara decided to launch a delivery service and adopt what is known as the Cloud Kitchen. “Dubai is a competitive market, but we are optimistic,” said George.
Economic problems at home
In debt-laden Lebanon, the Corona pandemic worsened the financial crisis, which included problems in the supply of food, foodstuffs, fuel and electricity, the emigration of employees and the Lebanese, the collapse of the national currency, and banks placed a ceiling on the withdrawal of deposits, despite the fact that the “Capital Control” law was not officially approved.
The decades-long electricity crisis has also forced citizens to rely on generators, which in turn are facing a shortage of fuel.
For Mario Haddad and Rabie Fakhreddine, the expansion in countries outside Lebanon’s borders took place before the crisis, but they intensified their efforts to increase the scope of their work after the crisis complicated the workflow in Lebanon.
Haddad, who opened the first sushi restaurant in Lebanon in 1997, said that the situation in Beirut is complicated. According to estimates, 60% of Lebanon’s restaurants are out of service, which gave an opportunity to stay for those who can continue.
He added to CNN in Arabic: “If we reach a stage where there is no diesel and electricity, we will be forced to close.”
For Haddad, his chain of restaurants, which includes Italian cuisine, does not incur losses, as the revenues are barely enough to cover rents, employee wages and other operating expenses.
He pointed out that wages are low, and that the dilemma he will face if wages are raised will result in raising prices in restaurants, and consequently customers will lose.
Haddad says, “You walk into the restaurant and notice that it is full because the price is equal…For example, the $100 that the customer paid in the past is now equal to $25.”
In Lebanon, whose currency is pegged to the US dollar, merchants buy goods at an exchange rate different from the official rate.
Haddad said, “We have become more cashiers than restaurant owners. We worry when we buy the goods at what price we will sell them, and what is worse is that there are 3 different exchange rates.”
Haddad recently opened a Mariollino pizzeria in the Egyptian North Coast region, which is witnessing a real estate boom in line with Egypt’s economic growth.
Haddad noted that without foreign capital, he would not have been able to take this step.
He added, “With Capital Control, we cannot take our money out of the banks, it is all there. And when we want to open (restaurants) in other countries, we have to open without the capital, which makes this impossible and unlikely.”
Mario’s second stop in Egypt will be in Cairo to launch restaurants with other investors that suit different tastes, such as sushi, fast food and pizza. Later, he is looking to enter other markets in Europe, such as Athens, Spain and Portugal.
Haddad pointed out that the expansion came in order for him to stay in Lebanon, as he has 300-400 employees, and since he is obligated to respect employment laws locally in Egypt, it is not possible to limit the workforce to the Lebanese.
The solution is abroad to ensure continuity at home
Recently, Rabih Fakhruddin obtained a golden residency in Dubai and settled with his family in the emirate after the massive Beirut explosion on August 4, 2020.
Fakhreddine launched Management 7, a company that runs restaurants and entertainment clubs, in the year 2011 in Beirut. The company now has more than 12 diversified investments.
He told CNN in Arabic: “Dubai was the first choice… after the Beirut explosion, we lost hope… So should I take a final decision and close the company? I have 265 employees under my responsibility.”
Fakhr El-Din talked about the same daily suffering in operating his four restaurants in Lebanon from rescheduling prices, and although the tourism sector has witnessed some recovery in Lebanon in the recent period, it was seasonal and “does not reflect the deteriorating sector,” he said.
Fakhruddin aims to open 5 new restaurants and entertainment clubs in the UAE before the end of the year. In Riyadh, he launched “Cafe Beirut” and “Antica Bar”. He expected that the Saudi market, like Egypt, would witness a great “upsurge” in the entertainment and tourism sector.
He also seeks to open restaurants and entertainment clubs on the North Coast in Egypt next year. He will also launch 6 restaurants and entertainment clubs in Cairo, with his company set to set foot in the European market through an Italian restaurant in Athens.