What’s it like to be an IKEA franchisee?
The IKEA business is built on a franchise system and it is our franchisees that bring the IKEA Concept to all the IKEA markets. But what is it like to be an IKEA franchisee? IKEA Al-Homaizi Ltd operates three IKEA stores – in Kuwait, Jordan and Morocco. We asked their CEO, Marino Maganto, to share his thoughts on the franchisee’s role. Here, he explains how Al-Homaizi’s relationship with the IKEA business began, and highlights some of the challenges and surprises the group has experienced along the way.
How did IKEA Al-Homaizi Ltd first become an IKEA franchisee?
"Mr. Yousef Al-Homaizi had been running a successful home furnishing showroom in Kuwait for almost 25 years when his sons Yacoub and Jassim Youssef first came into contact with the IKEA brand. It was actually Jassim’s Danish wife who introduced the brothers to the Swedish home furnishing brand. Shortly afterwards, they set about acquiring one of the first IKEA franchises in the Gulf. 35 years later, their Kuwait store stretches across 21,500 m2 of the country’s largest mall and they are also operating stores in Jordan and Morocco."
What triggered the Al-Homaizi brothers’ interest in the IKEA brand?
“What the brothers immediately recognised was a brand that provides uncompromising value for money at the same time as offering inspiring, beautifully designed solutions for every home. They were struck by its freshness and simplicity. The IKEA business model and values also lined up perfectly with Al-Homaizi’s belief that home is the most important space in the world.”
“Home is the most important space in the world.”
What is your main task as an IKEA franchisee?
“We implement the IKEA concept and develop the brand in the markets where we operate. In order to grow successfully in climates and cultures which are so far from Sweden, a certain amount of adaptation is needed. For example, before opening the store in Morocco, we did over 100 home visits to help us understand how the IKEA range could be made relevant to local consumers. We ended up building room sets with walls of muticoloured mosaic tiles and joining the sofas together in the style of a Moroccan salon. It looked great! Service expectations also vary from one market to another. People here are not so keen on DIY, so about 80% of our sales include home delivery and assembly. We have around 300 people dedicated to these tasks.”
How much freedom do you have as a franchisee?
"Inter IKEA Systems B.V. owns the IKEA Concept. As a franchisee, we can sell the IKEA Product Range, use the IKEA trademarks and operate according to proven working methods, following the IKEA values. Within this framework, we have the freedom to make certain decisions about what to sell and when. Of course, the majority of the products are part of the standard range, but we also select about 20% of them with local tastes in mind. For example, we stock more of the darker wooden furniture our customers prefer. We also adapt the timing of seasonal launches to match the local lifestyle and climate. That means we don’t put outdoor furniture on display until the winter months in Kuwait, when it’s cool enough to sit outside."
“Being a franchisee is both a great privilege and a great responsibility.”
What are the main challenges of being an IKEA franchisee?
"Being a franchisee is both a great privilege and a great responsibility. We represent a well-known brand that is very dear to many people around the world; one that lives by a great set of values and conducts its business in an ethical way. Our challenge is to protect the brand and develop the business in accordance with these values. That means, for example, continuously monitoring the online activities of organisations or individuals who want to use the IKEA trademark illegally. It happens about five times per week!"
“But perhaps the biggest challenge of all is affordability – not only for us but for all IKEA markets. We have to work together to put the products within reach of even more people in the future. That means constantly striving to optimise all aspects of the business, from supply set up to customer fulfilment, so that we can generate savings that translate into better prices for the customers… and better business for us.”
What, if anything, has surprised you?
“I have often been pleasantly surprised by how much people love IKEA! It’s a breath of fresh air to introduce both the brand and the IKEA way of working to new markets; to guide people through the range and offer solutions which solve their day-to-day, home-related problems.”
What is your view of the future?
“Together, we are exploring how best to expand the business – with a view to developing in new and growing in existing markets. Being an IKEA franchisee is a long-term commitment.”