If the rapid expansion goes as planned, there will be more than 38 McDonald's restaurants in the region by the end of 1995, including one in Bahrain and two in the United Arab Emirates joining two that opened in Egypt last month.
"The region whose time has come is the Middle East," said Nassef Sawiris, president, Orascom Foods, one of two Egyptian companies that have formed separate joint ventures with McDonald's to bring the chain to Egypt.
Yaseen Mansour, president, Mansour Foods Co., the other joint venture partner, estimates that the potential burger market in Egypt is $100 million, about half the country's fast food sales. The two franchisees each plan to open three restaurants by yearend and another five each by the end of 1995. In 10 years, they hope to have 100 stores between them.
Since the 1970s, when the Golden Arches expanded outside North America, McDonald's has received applications from Middle Easterners to open restaurants, but only recently did a combination of changing lifestyles, a more Westernized business climate and political stability in the region convince the burger giant the time was right.
"We started with the countries that are closer to the U.S. in lifestyle, where a large percentage of the population is working, women are working and there are shorter hours for lunch," said Awad Sifri, McDonald's Corp. international marketing manager in Oak Brook, Ill.
Five years ago in Egypt, a typical businessman would work from 8:30 to 2:30 or 3, go home for a big family lunch and a siesta. A government worker's day would be even shorter and the number of women in the workplace was very small.
Changing lifestyles have encouraged other multinationals to tap into the trend in eating out, including Wimpy's, Hardees, Pizza Hut, Kentucky Fried Chicken, Arby's, TCBY, Baskin Robbins and Chili's.
So far, McDonald's has opened 14 restaurants in Israel, Kuwait, Morocco, Oman and Saudi Arabia since 1992.
Although McDonald's declined to disclose sales figures for the region, Mr. Sifri said sales are higher than the international average of $1.7 million annually per store. Advertising is at a fixed 4% of sales.
In Egypt, both local partners predict annual sales of between $1.3 million to $2 million per store per year, totaling $30 million by the end of 1995. They hope to have 100 stores in 10 years.
To attract this family-centered society, the Egyptian restaurants will cater to families by having more seating and play areas. Ads are intended to create awareness. "I do have to show people what a Big Mac is and that it is an experience in itself," said Michele Dickinson, McDonald's Egypt country marketing manager.
Ms. Dickinson is spending 80% of her $1 million budget on TV advertising that broke in October and the rest on promotions and outdoor.
The spot shows the Bic Mac being assembled with closeups of the ingredients as an Arabic voice-over sings the renowned "Two all beef patties..." jingle. About three months later, Ronald McDonald will make his debut performing magic tricks. In Kuwait, Warba Graphics, a local agency, was used for the launch June 15, while Afkar/Promo 7, in Manama, Bahrain, handled the rest of the Gulf. A local agency, Cinema Press, was also used in Morocco.
To control costs in Morocco and the Gulf, McDonald's distributes leaflets on the streets and uses tray mats and menu boards rather than TV. Although the company has not altered any of its recipes, it has made some cultural adaptations, noting on store signs, for example, that all the meat is slaughtered according to Islamic custom. In Saudi Arabia, restaurants have separate seating areas for men and women. Because Middle Easterners tend to linger at tables to socialize, restaurants have seating for up to 250.
"Middle Easterners feel that McDonald's is top of the line when it comes to the quick service restaurant industry," Mr. Sifri said. "Until they have McDonald's, they really don't have the best," he added.