Dubai: Although Walid Hajj now considers himself a veteran restaurateur, this Saudi national based in the United Arab Emirates got his first big break in the food business world about two decades ago.
“I think I found that break with the people who were running the Cinnabon brand about 20 years ago,” recalled Hajj, who moved to Dubai in 2007.
In addition to Cinnabon, Hajj’s experience in operating foodservice and related businesses comes from starting up other popular restaurant franchises in the region including Zaatar W Zeit, Carvel, Seattle’s Best Coffee and Five Guys.
I think I found my first major break with the people who run the Cinnabon brand about 20 years ago.
100 restaurant chains, employing more than 3,000
Hajj showed his business acumen when he started ‘Cravia’ in 2001, for since then the Dubai-based franchise operator has added more than 100 restaurant chains in the United Arab Emirates, Saudi Arabia, Bahrain and Qatar to its portfolio, employing more of 3000 employees.
However, Hajj sold a majority stake in Cravia to a private equity firm in 2016, relinquishing executive positions leading the process but retaining the role of founder. He later co-launched Saudi Arabia-based cloud kitchen operator Kitch and Dubai-based restaurant group Lavoya in 2020.
What are cloud kitchens?
Also known as ghost kitchens or dark kitchens, cloud kitchens are essentially delivery-only restaurants. They offer restaurants, cafes and other food retailers a space to prepare food without eating facilities.
“When I sold my business 6 years ago, I considered retiring early from day-to-day operation. I tried it for a little over a year and hated it. Being involved in building a restaurant business is in my blood now, and I have a lot of fun,” Hajj revealed.
Hajj is now preparing to expand its restaurant franchises, including global juice bar brand ‘Joe & the Juice’, US fast food chain ‘Dave’s Hot Chicken’ and Lebanese food restaurant group 45-year-old streetwalker, Barbar. However, for a time before venturing into the corporate world, he spent a brief period managing brands at a conglomerate.
Management of a pre-entrepreneurial shampoo brand
“I worked with Procter & Gamble for a few years after college and ran the Head & Shoulders shampoo brand in Saudi Arabia. I worked on a project that involved changing the cap on the shampoo bottle saving about 50 cents on each piece. The total savings over a few years was in the millions of dollars due to volume, and that was significant at the time,” Hajj said.
“The two lessons I learned from these experiences were: first, any small savings matter, and second, scale is essential to business success. I think the latter has become a mainstay in my mind when I think about any business. The potential scalability of a business idea became the determining factor in taking advantage of any new opportunity for me.”
In addition to being a brand manager at Procter & Gamble for two years, he also held the position of vice president of operations for his family business, United Group, in Saudi Arabia. Walid, who is married with three children, holds an MBA from Harvard Business School in the US and a BS in industrial administration from King Fahd University of Petroleum and Minerals in Saudi Arabia.
The potential scalability of a business idea became the determining factor in taking advantage of any new opportunity for me.
Years of growth before taking on business roles
“My childhood was simple. The only memory that stays with me all the time is accompanying my father to his newly established business 40 years ago. Seeing how he built something from a very humble beginning to a substantial business, I think is what drives me professionally,” shared Hajj.
“Just being around my father with his incredible energy and passion inspired me and continues to inspire me to this day. Even at the age of 94, his eyes light up when you talk to him about a possible business idea or venture.”
Hajj added that the memories of him sending telexes and then faxes and even making tea and coffee for guests are still stuck in his head. “I used to do that on weekends and holidays and looked forward to it all the time,” he added.
How do you usually finance the initial investments of your companies?
“All my initial businesses were financed by me and my brothers (also my partners). I never really had to ‘fundraise’ in the typical way. It was more of a family-funded effort that was simpler to manage, but also comes with a whole different set of complications and sensitivities,” Hajj said.
“In my recent business, Lavoya, I teamed up with a friend, Fahad Al Hokair, who was eager to get into this industry. Fahad brought his experience in retail and real estate, and together we complement each other for the benefit of the business.”
Two challenges Hajj faced when starting a food and beverage business
• Challenge #1: Finding Your First Big Break
Although Hajj first made a move in the industry nearly two decades ago, he still felt that one of the many challenges that stands out in his head is finding the first “break”.
“It’s much easier to acquire F&B brands, for example, or find locations, or hire… if you have a proven track record. If you’ve done it before and done it successfully, people are more likely to open doors for you. Opening that first door though, so to speak, is the hardest part,” he explained.
“You need people to see your potential and believe in you, and that takes a lot of courage,” Hajj said as he described how he landed his first big break with Cinnabon. “The person who ran Cinnabon International at the time, Mike Shattuck, believed in me and what I can achieve and gave me the rights to the UAE operation. It was really a turning point in my career.”
It’s much easier to acquire F&B brands, for example, or find locations, or hire… if you have a proven track record.
• Challenge #2: Facing failure often
The other challenge or fear that Hajj said he continues to experience for many years working in this sector is the “fear of failure.”
“You work so hard to acquire a brand, hire the team and build the store and then the moment of truth comes when you open your doors to the public and you wonder, ‘Will they come in?’ It’s really scary because 8 out of 10 restaurants fail (real statistics) and thinking that after all this effort you can fail can discourage one from embarking on any venture to begin with, ”he added.
“On the other hand, once you taste success, you start wanting to take more risks and you learn to overcome fear, and you almost enjoy going through the process. I go through this journey now with the same level of enthusiasm that I had when we opened our first store over 20 years ago. Fear of failure is the biggest obstacle to success and I firmly believe that overcoming that fear is what separates entrepreneurs from dreamers.”
Key costs when starting a restaurant concept in the UAE
The serial restaurateur went on to explain how most of the time the economics of a restaurant vary greatly.
“In general, the most important cost elements are the cost of occupancy (rent) and labor. Together, these make up about half of your expenses. More recently, another cost element that has been added to the equation is the cost of delivery. That skewed the financial model of operating a restaurant and made it necessary to adjust other cost elements to offset this additional expense,” he explained.
Two Tips to Help Budding Entrepreneurs Start a Business
• Tip #1: “Don’t start a business because you have to start a business.”
Although there are many looking to start businesses and be their own bosses, it’s often considered a mistake to dive in without the necessary planning, and Hajj agrees.
“I think that by itself, the path leads to failure. Today, college graduates often want to start their own business, almost for the sake of starting their own business, and without having an idea at hand. The sequence must be reversed,” he said. “Once you have an idea or stumble upon one, then you consider the entrepreneurial route to take it forward.
“That’s why I’m a big fan of young people who resist peer pressure to become their own boss. Stay curious and fully alert in this process and an opportunity will surely present itself. This may be an old-fashioned way of looking at this, especially given the accelerated route to fame we’re seeing these days through social media and others, but I think it’s more sustainable and real.”
Fearing failure is the biggest obstacle to success and overcoming that fear, I firmly believe, is what separates entrepreneurs from dreamers.
• Tip #2: “Pick a field, domain, or industry that makes you work.”
When you’re an entrepreneur, staying motivated is crucial, Hajj added, because as commitment fades, so does your business.
“Pick something or an industry that makes you tick! Waking up every morning thinking that you love what you do is the best feeling in the world and is something that will make everything you do sustainable, successful and long lasting, ”she advised.
“Finding what you like will only come by exposing yourself to different things and different environments. It’s like finding love: if you sit at home dreaming about it, it will never materialize.”