Yunib Siddiqui was sitting in his London home on a leisurely Saturday morning in April last year, flipping through Wallpaper magazine, when he saw an article about an Australian gourmet food chain called Jones the Grocer. He instantly knew he wanted to open one himself. "I'm a foodie," he says. "I like to cook while watching the Food Channel. It's just something I always wanted to do." So, the 40-year-old businessman picked up the phone that same morning and tracked down the owner of the chain, John Manos. By the next week, Mr Siddiqui was on a plane to Singapore to meet with Mr Manos in person.
He was the proud owner of a franchise by the end of the trip. "That was it, right then and there," Mr Siddiqui said. "It was all done in two or three days." If establishing the venture in Abu Dhabi could be as efficient. Registering the supermarket and restaurant as a store in Abu Dhabi took about three weeks, roughly Dh18,000 in licensing fees, meetings with dozens of people and the filling out of stacks of paperwork.
"Setting up a business here is like passing through a minefield," Mr Siddiqui says. "There is so much stuff you just wouldn't expect." According to a World Bank study, the UAE ranks 113th out of 181 countries on a survey detailing the ease of establishing a business, just behind Namibia and tied with Burkina Faso. New Zealand, Canada and Australia take the survey's top three spots. In some US states, an eager entrepreneur can set up a business in a day or two with nothing but a credit card, but in the UAE a long obstacle course awaits, says John Habib, a legal and management consultant in Abu Dhabi.
"There are trials and tribulations which tend to weed out the weak of heart and weak of stomach," he says. However, the potential profits for the right product or service can make the journey worthwhile, Mr Habib says. "The golden ring at the end of the process makes it worth it for a lot of industries." Mr Siddiqui was not a new entrepreneur. He already owned Besmo, a home-accessories supplier based in London, but sales had been dwindling due to cheaper wares flooding the market, mainly from China. The global financial downturn only compounded the trend.
Besmo is still operating, but its revenues have fallen far from a peak turnover of 2 million pounds about five years ago. It once supported 12 employees, but is now down to three. So, the 40-year-old decided his new venture - what he describes as gourmet food for everyday living - would be in the UAE. Mr Siddiqui's parents came to Abu Dhabi in 1977 - his father worked as an engineer in the oil industry - and stayed until the mid 1990s. They briefly moved back to Montreal, Canada, for about three years but returned to Abu Dhabi a decade ago. Mr Siddiqui was born in Karachi but lived in Abu Dhabi before going to boarding school in the UK at age 11. He later attended the London School of Economics. Throughout, Mr Siddiqui was a frequent visitor to the Emirates over the years. "It's not really home, but everything has led me in this direction," he said. "It just seemed natural." He knew, firsthand, that there was a niche here for Jones the Grocer. When he would visit his parents in Abu Dhabi he would set out to cook a nice meal of pasta for his family, but constantly had trouble finding key ingredients, such as truffle oil or a certain kind of cheese. "There was a gap," he says. And years later, the gap persists, so Mr Siddiqui decided to invest upwards of US$1.2 million (Dh4.4m) in the Jones the Grocer venture. About 60 per cent of the start-up funds covered construction, design and equipment, he says, and 11 to 12 per cent was allocated to occupancy costs. Mr Siddiqui says the store will sell an eclectic selection of foodstuffs, many of them imported, such as Donna Hay cup cake mixes and brownies, balsamic glazes, and yes, a wide variety of truffle oils. There will also be a bakery and a walk-in cheese room, and tables at which foodies can enjoy their lattes and biscotti. A full kitchen will also turn out a wide selection of dishes daily. Originally, the former accountant planned to open two or three stores in Dubai. But landlords who wanted steep rents caused him to look towards Abu Dhabi, he says. Mr Siddiqui was more accustomed to dealing with landlords in the UK, who were generally more cooperative. "Over here, you ask anything along the lines of where there's some kind of two-way relationship with the landlord and it's like, 'that's your problem.' And we found that a lot in Dubai, he explains." After looking at locations in Khalidiya and Musaffah, Mr Siddiqui chose a 340-square-metre space on the ground floor of an office building near the corner of Muroor and 15th streets. The landlord, Aldar, the real estate developer, was more accommodating than those in Dubai. Then, the trail of paperwork began. Mr Siddiqui first had to decide how he would classify his venture. He chose to establish it as a stand-alone business, also known as a limited liability corporation. This option, as opposed to establishing the franchise in a free zone or as a branch office, gave him the most freedom to expand in the future. If he had decided to go the free zone route, he would be limited to keeping his business in the designated area and would not be able to open a store in prime locations, such as Jumeirah, as he plans, he says. If he decided to open it as a branch, it would need to be wholly owned by a UAE national. Next came the most stressful part of the process - Mr Siddiqui had to find an Emirati sponsor. Under law, every business owner must find a UAE national to take on 51 per cent ownership. Once the right partner is found, the two parties sign an agreement that outlines how much involvement, and what percentage of the profits, if any, the sponsor will have. These "side" agreements have long been used to override Government law but are not official legal documents, said Mr Habib. That level of uncertainty made the process nerve-racking," he says. "Really, you're bringing somebody into your life and your business that is a completely unknown entity. But, that is the risk of doing business in the UAE. That is one of the things that nowhere else in the world would you be faced with." For strong international brands or products, the sponsor-selection process can be like a "beauty contest", says Mr Habib. A parade of potential sponsors will approach the entrepreneur and showcase the type of investment they would contribute and the cut of profit they would want. "It can be feverish competition for these entrants," he says. But for smaller, unknown players, it can be tricky. Signing on to an agreement with the first would-be sponsor could give away a huge profit margin. In addition, meeting with a slew of sponsors can make a business owner look unprofessional, he says. "It's a happy medium between dancing with too many and looking bad, or dancing with too few and making a mistake in your market segment," Mr Habib says. Mr Siddiqui met with five potential sponsors, which he found through the British Embassy and word of mouth. "It did occur to me many, many times when I met people, 'What happens if, for example, we open 15 stores, and turn over Dh20 million; will a local sponsor get greedy and say 'can I have X per cent?" Mr Siddiqui says. He chose his current sponsor ? whom he did not want to name ? because he was the most transparent, and based on a gut instinct. "We spent a lot of time together at his home and I enjoyed his family hospitality," Mr Siddiqui says. "I met with his entire family on numerous occasions. I also felt that he was interested in me as a human being; that makes a big difference." Mr Siddiqui agreed to pay him an undisclosed fee, and his sponsor arranged the services of an agent - also know as a public relations officer - to help set up the business. Mr Siddiqui made clear from the outset that he was not seeking a partner, but a sponsor who would not take any of the profits. His sponsor agreed to these conditions. "He's been very accommodating," Mr Siddiqui says. Drafting the court documents to cement the sponsorship was another stumbling block. Lawyers were asking for huge fees to produce detailed legal papers, even though standard forms are available free to the public from the Abu Dhabi courts, he says. "The lawyers here want to charge something like US$4,000 or US$5,000 to provide you with these legal documents, with all kinds of legal stuff in them that doesn't even necessarily stand up in court," he says. Eventually, Mr Siddiqui got rid of the lawyer he had hired. He and his sponsor instead translated the standard documents from Arabic into English and created their own contracts. Then, Mr Siddiqui began filing the appropriate business licence forms to the ministries involved - in his case the ministries of food and economy and the municipality. Most business owners leave the tedious dirty work to the public relations officer to deal with. But Mr Siddiqui wanted to know exactly how the bureaucracy operated. "What tends to happen is you never quite understand how the system works," Mr Siddiqui says. "So if something goes wrong, you don't know how to fix it. So I said 'I will go with him everywhere he goes'." Everyone Mr Siddiqui dealt with was friendly and helpful, he says. But the pace was slow and the procedure was opaque. Every form needed to be dealt with by official translators ? he says has spent roughly Dh4,000 on this process alone ? and it was unclear how much each of the processing fees was. These included payments of Dh500 to the Abu Dhabi Chamber of Commerce for registering the business agreement), Dh4,881 to the Department of Economy and Planning for activities and licensing) and the Dh1,100 to the Labour Ministry for labour card fees. The codified business categories were rigid and more suited to the small shops that line Abu Dhabi's inner streets, he says. It did not have much leeway for accommodating ventures, such as Mr Siddiqui's combination restaurant and high-end food store, that did not fit neatly between the lines. For example, the municipality granted a temporary license that gave him the ability to sign his lease, but did not give him the authority to hire any staff. Yet, the municipality would not grant his final trade license until the Food Control Authority inspected his restaurant. "They didn't understand how a restaurant can also be a supermarket," he says. Eventually, Mr Siddiqui went back to the Food Control Authority with the public relations officer and explained the situation to the administrators. He stressed to authority staff that waiting for his business to be inspected before granting it an operating license would not work. Once they understood the situation, his licence was approved. Many entrepreneurs would have relied on their adviser, who might not have pushed to get it done, Mr Siddiqui says. "There is a way around it, it's just not apparent until you investigate." Now, Mr Siddiqui is in the home stretch. Aldar is expected to hand the site over to him this week, and he aims to open the store by June 15. He has hired one cafe manager, but has plans to run the business with a staff of 15. He intended to import staff, but with the current job market he has instructed his agent to look at people who already live here. And the résumés have been pouring in. Finding a contractor to build the store was a challenge, he says, as many would not send quotes or agree to meet until Mr Siddiqui guaranteed them the job. Luckily, he found a firm, Hamilton Design International, to fit-out the stores with Jones' blend of stainless steel and dark wood. Some previous contractors would not even meet or give a quote unless Mr Siddiqui granted the contract. He ordered the equipment - dishwashers, refrigerators, all in stainless steel and wood accents - from Australia, which was cheaper than buying it in the UAE. "People here are quoting crazy prices and nobody is very negotiable," he says. "The salesmen themselves don't have real authority to negotiate." In addition, each of the 50 or so vendors Mr Siddiqui contacted wanted to meet him face to face, which he says would have been too time consuming. So, the goods are now on their way from across the globe. He also sent himself two or three boxes of jams, pastas and chutneys as a trial shipment, and said they cleared customs with ease. Mr Siddiqui's wife, Shaleeni, and three sons - Zain, 13, Zahid, 10 and Zakir, 8, are moving from London to Dubai this summer, from where he will commute to the store. He planned to live in Abu Dhabi, but a shortage of school spaces for his children and high rents made it more practical to live in Dubai. Now, he and his family are eager to see the project they started talking about a year ago come together. "I'm just excited to get it off the ground now. Just trying to realise the plan and start trading as soon as possible," he says. aligaya@thenational.ae