Les Tartes de Françoise goes to the Big Apple Les Tartes de Françoise (TdF) was launched in 1994 in Ixelles, a borough of Brussels in Belgium. TdF is a producer of Belgian quiches and sugary and salted pies. Today, it has outlets in several Belgian cities. In the early years, 65 to 70% of its sales in Belgium were B2B; the remaining 30-35% B2C. In 2007, CEO Olivier Lafutt changed focus somewhat and launched a B2C online sales channel, which has led to strong growth. In parallel, TdF invested in the upgrade of its physical B2C outlets throughout the country, as well as in the quality of its products. In 2014, the company employed approx. 60 people with revenue figures of 6,3 mio EUR (approx. 8,5 mio USD). In January 2010, TdF moved across the Atlantic to New York, opening an atelier of approx. 150 square meters in Hell’s Kitchen, an affordable area in New York. In New York, Olivier opted for the same approach that was originally used in Belgium: an atelier without shopping front and window that caters to professional customers, such as high-end food chains (e.g. Dean & DeLuca), restaurants and hotels (e.g. Sheraton, Plaza Hotel and Hyatt). After a while, the store also began selling to individual end consumers. TdF hired four full time pastry workers for its operations in NY and budgeted 300.000 EUR (approx. 400.000 USD) for its American adventure. Olivier entrusted management of the atelier to a Belgian expat pastry chef. Olivier visited the NY atelier once a month to follow up on operations. In December 2011, Olivier was forced to withdraw from NY as average weekly revenues did not exceed 5.000 USD. In a Belgian TV interview immediately after the misadventure, Olivier indicated that “the Belgian approach did not work in the US, for many different reasons.” You have been retained by Olivier as consultant to perform a full “post mortem” diagnostic of the American adventure. A quick consultation of Hofstede’s On-line Resource Center yields the following country profiles: Your assignment is to analyze the case, utilizing course content, and make recommendations in connection with the following questions: - What factors (principally cultural but also other relevant aspects) may have been the causes of Tdf’s difficulties in New York? - How should Olivier have prepared differently before entering New York? If Tdf’s wants to re-enter and obtain (more of) the American market, what would you recommend the company to do?

1. HULT BUSINESS SCHOOL
Les Tartes de Francoise - Business Case
GROUP 07
Bisher Yousfi
Fadi Al Abweh
Hasnain Jarves
LiLy Bisharat
Mohab Fawzy
Tiago Silva

2. • The Expo 2020 is taking Dubai into a new era attracting huge amount of new projects, with key
focus on the hospitality and F&B industries.
• According to Euromonitor International, additional 19,000 F&B outlet are forecasted to enter the
UAE by 2019. (1)
• The F&B market is very vital and promising in UAE, the total value is estimated around US$ 28.8
billion and it’s forecasted to reach US$ 37.4 billion in 2018. (2)
• A city with multicultural population, coming from 196 countries, with medium to high purchasing
power.
• Large pool of nationalities which are described as “well traveled” and highly affected by European
and American cultures, this gives high potential to TdF. (3)
• Due to the multi-cultural population, the residents are very brand conscious. The segment is
mainly driven by franchised brands where Europeans brands are trying to take market share from
the American ones. (4)
• The Department of Tourism & Commerce Marketing in Dubai managed to position Dubai as the
hub for F&B industry through different exhibitions and events (Gulf Food expo, Dubai Food
Festival, Taste of Dubai and many others). (5)
GROUP 7 – Expansion & Strategy
Why should TdF consider Dubai?
• The Expo 2020 is taking Dubai into a new era attracting huge amount of new projects, fomenting the hospitality
and F&B industries.
• According to Euromonitor International, additional 19,000 F&B outlet are forecasted to enter the UAE by 2019 (1);
the total value of F&B is estimated to grow from US$ 28.8 bn to US$ 37.4 bn in 2018. (2)
• Due to the multi-cultural population, the residents are very brand conscious. The segment is mainly driven by
franchised brands where Europeans brands are trying to take market share from the American ones. (3)
• The Department of Tourism & Commerce Marketing in Dubai managed to position Dubai as the hub for F&B
industry through different exhibitions and events (Gulf Food expo, Dubai Food Festival, Taste of Dubai and many
others). (4)

3. • Due to high competition, the market is dominated by big F&B brands.
• As a result of high temperature, malls and shopping centers are the main destinations for Dubai residents. (6)
• Licensing and certification: The process is described as “complicated and unclear” by the Department of
Economic Development – Government of Dubai. (7)
• The recruiting cost is relatively high in Dubai. (8)
• The country’s economy is mainly reliable on tourism as one of the main income. Tourism is negatively
affected by the Euro zone’s slow down and political issues in the Middle East.
• So far, Dubai is not affected by the Arab Spring, unlike Bahrain where F&B market slowed down for two
reasons: (9)
• Lower numbers of tourists from other GCC .
• Violence's and protestations .
• The cost per square feet in the malls with high footfall is between US$ 409 – 490; making the annual rent
cost between US$7.3 m and 8.8 m per shop.
• TdF can do networking with the key players in the market by attending Franchising Middle East, a dedicated
event to connect the franchisers with the franchisees. (10)
GROUP 7 – Expansion & Strategy
How to enter the market?
• The market is dominated by big F&B brands.
• As a result of high temperature, malls and shopping centers are the main destinations for Dubai residents. (5)
• Licensing and certification: The process is described as “complicated and unclear” by the Department of Economic Development –
Government of Dubai. (6)
• The recruiting cost is relatively high in Dubai. (7)
• The country’s economy is mainly reliable on tourism as one of the main income. Tourism is negatively affected by the Euro zone’s slow
down and political issues in the Middle East. So far, Dubai is not affected by the Arab Spring, unlike Bahrain where F&B market slowed
down for two reasons: (8)
ü Lower numbers of tourists from other GCC .
ü Violence's and protestations .
• The cost per square feet in the malls with high footfall is between US$ 409 – 490; making the annual rent cost between US$ 613,000
and 735,000 per shop.
Recommendation for effective market entry into Dubai:
(1) B2B operations to be handled by TdF (2) B2C to be franchised

4. GROUP 7 – Key factors for the business to succeed
Key Factor Considerations
Financial Power
To obtain a site for the production of fresh products, and its needed
improvements over time. Equipment (machinery).
Cross-functional & cross-
cultural planning team
Collaborate with local counterparts (choosing the right franchise
operator).
Conduct a consumer behavior survey.
Proper understanding of
planning timeline
logistics & registration to opening , continuous training and successful
functioning.
Clear Strategies Strategic Plan/Campaign plan.
Clear targeting & focus on
which customer profile to
target for product adaptation
Healthy lifestyle: low fat products.
organic products.
Halal food: no alcohol or pig extracts.
Frozen products: supply to hotels/GCC.
Location selection
Rent prices.
Polluted vs. unpolluted area.
Ease of distribution within the region.
Post operational/marketing
follow-up
With partners: to oversee proper implementation of franchising
agreement terms.
With customers: ensuring satisfaction.
With employees: ensuring effective communication.
Recommendations:
ü Consider a local franchise operator having a GCC
presence
ü Proper market analysis, relevant planning &
operating strategies for log-term effectiveness &
profitability
ü While maintaining the TdF’s originality, product
adaptation is needed:
Ø Lighter & healthier products, incorporation of
organic raw materials
Ø Creativity in presentation, processing & packaging
Ø High quality service
à Leveraging over competitors
ü Al Quoz or Dubai investment park: hubs of catering
in Dubai
ü Recommended outlet location: high society
neighborhoods/malls
ü Frequent visits to UAE:
Ø Collaborative meetings with partners
Ø Continuous customer surveying
Ø Continuous training & team building with
employees

5. GROUP 7 – Key factors for the business to succeed
Dimension Belgium UAE
Culture
• Language: Dutch, French, German (10)
• Religion: Christianity (10)
• Not so traditionalistic (high long term
orientation) (12)
• Leading & decision-making: less
centralized than UAE (12)
• Individualistic (12)
• Motivation driven by success &
achievement (12)
• Language: Arabic, English
(multilingual= multinational) (11)
• Religion: Muslims (76%) (11)
• Quite traditionalistic
• Leading & decision-making: top-
down, centralized (13)
• Collectivistic (13)
• Balances quality of life with
success & achievement (13)
Administration • No social/political risks with UAE (Dubai)
• Tax-free country
• No clear legislation time-frame
(15)
Geographic
• 30,528 km2 (11,787 sq mi) (10)
• Population size: 11,225,207 (14)
• Population age (15-54 years): 52% (10)
• 83,600 km2 (32,278 sq mi) (11)
• Population size: 9,086,139 (14)
• Population age (15-54 years):
75% (11)
Economic
• GDP : $494.620 billion (38th) (15)
• Income per capita: $43,629 (15)
• GDP: $641.880 billion (32nd) (16)
• Income per capita: $66,996 (16)
• Welcoming business trades with
Belgium (17)
Recommendations:
ü Consider language
differences, and religious
impact on F& B industry
in Dubai.
ü Create simplified
systematic processes for
decision-making
ü Although business seems
tempting in UAE (tax-
free); however,
legislations are time-
consuming
ü Dubai geographically will
be convenient during
logistical parameters.
ü Price elasticity & higher
willingness to pay in
Dubai (higher income
per capita than Belgium)

6. Dubai Business Model
GROUP 7 – Expansion & Strategy
LES TARTES DE FRANCOISE BAKERY
CATERING HUB - AL QUOZ/DIP
STRATEGIC PILLARS
TdF Local Footprint
Franchisee
Shops/
Carts
Franchisee
Outlet
Malls
Hotels
Leveraging TdF by Franchises +
Placement in Hotel Menus Rest.
Phase 2 –
Expansion
Corporates &
Local Partnerships
Phase 2
Online
delivery

7. Hotel Industry in Dubai
GROUP 7 – Expansion & Strategy
0%4%
6%
12%
13%
16%
49%
0-2 Economy
3 Midscale
3-4 Upper Midscale
4 Upscale
4-5 Luxury
5+ Upper Upscale
N/A Independent
Stars Hotel Type 18 % N# Hotels 19
0-2 Economy 0.3% 1
3 Midscale 4.6% 20
3-4 Upper Midscale 5.7% 25
4 Upscale 11.7% 52
4-5 Luxury 12.8% 57
5+ Upper Upscale 15.8% 70
N/A Independent 49.1% 218
Stars Hotel Type % N# Hotels
4-5 Luxury 13% 57
5+ Upper Upscale 16% 70
N# Hotels Target
Universe 127
Target 35% 45
Dubai Luxury Hotels - Map
Average Order Size
Type Qtt Price AED
QUICHES 2 73.71 147.43
SALTED 2 75.88 151.75
SWEET 3 59.44 178.31
Grand Total 7 477.49
Average Purchases
Freq Qtt Hotels AED
Daily 1 45 21,270
Monthly Total 22 467,931
Yearly Total AED 5,615,171
USD 1,528,770

8. • 80% of the population expatriates represent different cultures
and ethical (20)
• As per the study conducted by the “Institute of Management
Technology, Dubai” the result suggests that the attitude
towards business ethics is similar among expatriates in the
UAE.
• As per Dubai Code of Conduct document published by the
Executive Council of the Government of Dubai on March 2009
(21) there was at set of standards for social ethics and mutual
respect that shall be followed in respect of the Emirate's
culture, religion and habits. The document included:
1. Ethics
Such as: show respect for the symbols of the state, Decency,
Public displays of affection, Alcohol consumption &
Purchasing and Respect for religion (example: Ramadan,
Prayer timing and Religious activities and celebrations)
2. Environment:
The document also included the Social Responsibility
towards environment (example: Resource consumption,
Reducing waste and Preservation of the marine & desert
environment
• This means that TdF’s management will need to adopt an
extended policy of the business ethics and conduct to the strong
one they have in Belgium.
• The new policy will yield to the regulation, norms and vales in
UAE.
1. New ethics:
Respect for religion: Islam being the official religion of the UAE,
some rules shall be followed in order to show respect and avoid
misunderstandings.
₋ Halal Food. The food should be alcohol & pork free
₋ Ramadan. The holy month of Ramadan is challenging month
for F&B sector as no food can be served in public during
specific hours.
All employees working in F&B sector are expatriates coming
from specific nationalities hence taking in consideration the
culture difference in the team will be a challenge for TdF’s
management who used to deal mostly with Belgium employees
2. Social Responsibilities:
Establish a tie-ups with local communities to donate the left-
over food that will be useful for the poor & needy
GROUP 7 – Expansion & Strategy
Ethics & Social Responsibilities

9. GROUP 7 – Economic Highlights
Cost-effectiveness
Les Tartes de Francoise Income Statement
2016
Gross Sales Revenues (B2B) 1,500$
Franchise Fees Revenues (B2C) 940$
Net Sales 2,440$
Cost of Goods Sold 555$
Gross Profit (Loss) 1,885$
Advertising 244$
Machinery and Equipment 244$
Insurance 20$
Rent 45$
Salaries and Wages 180$
Travel 12$
Utilities 30$
Total Operating Expenses 775$
1,110$
{42}
Income from discontinued operations 80$
1,190$
For the Year Ending [Dec 31, 2016]
(dollars in thousands)
Revenue
Other Items
Net Income
Cost of Goods Sold
Expenses
Operating Income (Loss)
Includes the Kitchen Sales of the raw
materials and processed materials to the
Franchisee
Includes the one time Franchise fee of $
800k & the annual royalty fee of 7% of
Gross Sales of the Outlet
Includes the cost of raw materials
purchased from the suppliers

10. (1) The National Newspaper, the business section, November 24,2014, updated December 1, 2014 12:44 PM
http://www.thenational.ae/business/economy/appetite-for-growth-in-uae-as-food-and-beverage-sector-expands
(2) UAE Food and Beverage Market, Economic Research Department, Dubai Chamber of Commerce and Industry, January 2015, page 2
(3) Al Masah Capital Management Limited: GCC Foodservice Sector, April 2014, page 7 and page 10
(4) Al Masah Capital Management Limited: GCC Foodservice Sector, April 2014, page 9
(5) Al Masah Capital Management Limited: GCC Foodservice Sector, April 2014, page 7
(6) DUBAI SME Industry Cluster Studies – Hospitality Industry, Dubai SME, An Agency of the Department of Economic Development, page 5
(7) DUBAI SME Industry Cluster Studies – Hospitality Industry, Dubai SME, An Agency of the Department of Economic Development, page 5
(8) Al Masah Capital Management Limited: GCC Foodservice Sector, April 2014, page 14
(9) DUBAI SME Industry Cluster Studies – Hospitality Industry, Dubai SME, An Agency of the Department of Economic Development, page 4
(10) "Belgium." Central Intelligence Agency. Central Intelligence Agency, 19 Nov. 2015. Web. 02 Dec. 2015. <https://www.cia.gov/library/publications/the-world-factbook/geos/be.html>.
(11) ”UAE." Central Intelligence Agency. Central Intelligence Agency, 19 Nov. 2015. Web. 02 Dec. 2015. <https://www.cia.gov/library/publications/resources/the-world-factbook/geos/ae.html>.
(12) http://geert-hofstede.com/belgium.html
(13) http://geert-hofstede.com/arab-emirates.html
(14) "Population, Total." Population, Total. N.p., 2015. Web. 02 Dec. 2015.
(15) https://en.wikipedia.org/wiki/Belgium
(16) https://en.wikipedia.org/wiki/United_Arab_Emirates#cite_note-imf2-2
(17) UAE. Dubai Chamber of Commerce and Industry. Business Support Department. Franchise in Dubai. Dubai Business Guide Operations. 4th ed. Vol. 1. Dubai: Dubai Chamber of Commerce & Industry.
Business Support Department, 2012. Online.
(18) ENBD, Bloomberg (2014)
(19) Dubai Statistic Center (2014)
(20) Comparing Ethical Attitudes of Expatriates working in UAE by K.S. Sujit, Institute of Management Technology, Dubai
(21) Dubai Government website (www.dubai.ae)
GROUP 7: References & Citations