The Saudi restaurant market for a UAE operator

A restaurant group with three successful venues in Dubai is offered a site in Riyadh. The market is large, growing and hungry for concepts that have proved themselves elsewhere in the Gulf, and the landlord is keen. The owner assumes that what works in Dubai will work across the border with a few adjustments. Then the questions start: a different tax rate, electronic invoicing rules, quotas for national staff, a different weekend, licences from different authorities and guests whose habits are not quite the same.

The Saudi restaurant market has become one of the most talked-about in the region, as the country's economy, tourism and entertainment sectors open up under its long-term national plan. For a UAE operator, it is close, familiar in many ways and different in enough ways to catch out a group that treats it as another Dubai.

This guide covers what changes when a UAE restaurant group crosses the border: demand, staffing, compliance and the systems that must follow, written as questions to settle before signing a lease. Rules and procedures change, so confirm every requirement with the Saudi authorities or an adviser before acting. Every venue and figure in it is an example.

UAE operators look at Saudi Arabia because of its size and its growth. It has a large, young population, rising spending on eating out, major new tourism and entertainment projects and cities that are developing quickly, with many new malls, districts and destinations.

Under Saudi Vision 2030, the country's long-term plan, entertainment, tourism and hospitality have been given particular attention, and the market for restaurants has changed considerably in recent years.

The first lesson for many UAE operators is that Saudi Arabia is not another Dubai. Its cities differ from each other as much as from Dubai: Riyadh, Jeddah and the Eastern Province each have their own character, guests and habits. The mix of residents and visitors differs too.

Treat each city as its own market. A concept that suits Dubai's tourist areas may need a different site, menu or format in Riyadh, and a site in Jeddah may suit a different concept again.

Demand in the Saudi restaurant market is driven largely by residents, families and young people, with a strong culture of eating out with family and friends, especially in the evenings and at weekends. Delivery is widely used, as in the UAE.

Study the guests in the specific area before choosing a concept: who lives and works nearby, when they eat out, how they spend and which venues they already love. A concept should be adapted to them rather than imported unchanged.

The weekend in Saudi Arabia falls on Friday and Saturday, unlike the UAE's Saturday and Sunday. Busy nights, family days and the rhythm of the week shift accordingly.

Plan opening hours, staffing, promotions and the rota around the local week. A UAE operator's habits, such as a big Sunday brunch, may not translate directly.

Ramadan shapes the year in Saudi Arabia as in the UAE, with iftar and suhoor trade, changed working hours and different patterns of demand. The Eid holidays bring their own surges.

Plan the first Ramadan carefully, ideally after watching how the area's venues trade during it. Our guide to Ramadan restaurant hours and the service that fits covers the principles, which apply on both sides of the border.

Alcohol is not served in Saudi Arabia's restaurants. For UAE concepts that rely on drinks sales, such as bars, wine-led bistros or venues where alcohol is a large share of revenue, the model has to change, often fundamentally.

Rebuild the drinks side of the concept around mocktails, specialty coffee, fresh juices and other soft drinks, and rebuild the financial model with it. A concept whose profit depended on alcohol may not work at all without a different approach.

Saudi Arabia's food authority requires restaurants to show the calorie content of their dishes on their menus. Menus, including online and delivery menus, must carry the information.

Plan the work before opening: each dish's calories, worked out properly and updated when recipes change. A UAE menu that has never shown calories needs this added before it can be used.

VAT in Saudi Arabia is charged at fifteen per cent, three times the UAE's five per cent. It changes menu pricing, margins and the comparison with UAE venues.

Rebuild the pricing for the Saudi market, rather than converting UAE prices. A dish priced for a five per cent VAT market and simply converted may be too cheap or too expensive once fifteen per cent is included.

Saudi Arabia requires VAT-registered businesses to issue electronic invoices through compliant systems, and to integrate those systems with the tax authority's platform in waves. For a restaurant, every receipt is an invoice that must meet the requirements.

This is one of the biggest systems questions for a UAE operator. Our guide to ZATCA e-invoicing for restaurants, explained covers what it asks of a till.

Restaurants in Saudi Arabia need licences from Saudi authorities, with commercial registration, municipal licences, food safety requirements from the national food authority and civil defence approvals, among others. Municipal licensing is handled through the Balady platform.

The process, the documents and the timings differ from Dubai's. Use an adviser who knows the Saudi process, and map the permissions as you would for a Dubai opening. Our guide to restaurant licence Dubai: what you apply for shows the kind of map worth building.

Saudization, the national programme that requires businesses to employ Saudi nationals in a proportion of their roles, applies to restaurants. Quotas and the roles they cover are set by the authorities and change over time.

Plan the team around it from the start: which roles will be filled by Saudi nationals, how they will be recruited and trained and how the quotas affect the cost and structure of the team. It is one of the biggest differences from running a team in the UAE.

Arabic is the main language of the Saudi market, and many guests expect menus, signs and service in Arabic, often alongside English. A UAE concept that runs mainly in English may need to change its menus, its signage and its team's training.

Plan bilingual menus and service from the start, and make sure the team can serve guests in the language they prefer. Translations should be done properly, by people who know the food and the market.

A new team in a new country needs thorough training, in the concept, the service style, the menu and the systems. Many UAE operators send experienced staff from their existing venues to open the Saudi site and train the local team.

Plan the training period into the opening timeline, and decide how long the opening team will stay. A venue that opens without its standards fully trained into the local team often struggles to hold them.

Site selection matters even more in a new market, where the operator does not know the streets, the footfall or the competition. A site that looks right on paper may not suit the concept, or may be in an area whose guests the operator does not understand.

Spend time in the city before choosing: visit sites at every hour of the week, eat at the competition, talk to other operators and landlords. A site chosen for its rent or a landlord's enthusiasm, rather than its trade, is a common expansion mistake.

Expansion across a border adds risk to every usual expansion mistake: a first business that depends on the owner, a site chosen for the deal, too little cash for a slow start, an owner stretched between two countries and a new venue propped up by the old.

Our guide to expansion mistakes that close both venues covers the patterns, and each one is harder to fix from another country.

Many UAE operators enter Saudi Arabia with a local partner or franchisee, who brings knowledge of the market, the authorities and the landlords. Others enter on their own. Each route has its own structure, rules and risks.

Take legal advice on the structure before committing. The choice between a partner, a franchise and direct entry shapes everything from licensing to profit sharing.

Many GCC restaurant trends run across the region: delivery as a large part of trade, specialty coffee, family dining, homegrown concepts competing with international brands, and new destinations opening in every major city.

Watch how each trend plays out in the specific Saudi city. A trend that is mature in Dubai may be just beginning in one Saudi city and already crowded in another.

Running venues in two countries is a step up in multi venue operations. Standards, menus and the brand need to travel, while licensing, tax, staffing and suppliers differ in each country. Reporting needs to bring both together, in comparable terms.

Our guide to multi-venue operations: what to centralise covers what to run centrally; across a border, some of it must stay local.

Venues in Saudi Arabia trade in riyals and those in the UAE in dirhams. Group reporting needs both converted into one currency, consistently, so the venues can be compared and the group's figures make sense.

Agree how conversions are done, at the rate on each day or a monthly average, and keep to it. Our guide to consolidated reporting across four venues covers how to add venues together fairly.

The systems a UAE group uses may not all work in Saudi Arabia. The till must issue invoices that meet Saudi e-invoicing rules and connect to the tax authority's platform when required; menus must show calories; payments must work with local providers; and delivery platforms may differ.

List every system the venue uses and check each one for the Saudi market before signing the lease. A till that cannot meet the e-invoicing rules is not an option, however well it works in Dubai.

Payments in Saudi Arabia are made largely by card, with the national debit network, mada, widely used, alongside international cards and digital wallets. A venue needs payment terminals and a provider that accept the cards guests actually carry.

Check which payment providers and terminals work with your till in Saudi Arabia, and what they cost. A payment setup that works in Dubai may not be available, or may not accept the local cards, across the border.

Delivery is a large part of the Saudi market, as in the UAE, but the leading platforms and their terms differ from city to city and from the UAE. Commission, fees and the share of orders each platform brings all need checking locally.

Treat delivery as a new negotiation, not an extension of your UAE agreements, and build its costs into the Saudi budget.

Suppliers differ across the border. Some UAE suppliers deliver into Saudi Arabia; many do not. Imported ingredients face different import rules and timings, and local suppliers need to be found and tested.

Map the supply chain for the Saudi venue before opening: which ingredients come from where, how long they take and what the backup is. Menu items that depend on a single imported ingredient are a risk until supply is proven.

Costs in Saudi Arabia differ from the UAE's: rent, staff costs including national staffing, licences, utilities and the higher VAT all change the budget. A budget copied from a Dubai venue will be wrong in many lines.

Build the Saudi budget from local quotes and local advice, with a slow start and a generous reserve. Our guide to restaurant costs in Dubai: what to budget shows the structure; the figures must be Saudi ones.

Opening in a new country usually takes longer than opening another venue at home: finding the site, setting up the structure, licensing, recruiting under national staffing rules, training the team and setting up compliant systems all take time.

Plan a realistic timeline, with time to learn the market before committing to a date. A rushed opening in an unfamiliar market is one of the most expensive ways to discover what you did not know.

Other UAE operators who have opened in Saudi Arabia are a valuable source of knowledge: which cities and districts worked, which partners and advisers helped, how long licensing took and what surprised them.

Ask them before committing. Most will share their experience, and their mistakes are cheaper to learn from than your own.

Some operators test the Saudi market before committing to a full restaurant: a pop-up, a kiosk in a mall, a delivery-only kitchen or a partnership with an existing operator. A test shows whether guests respond to the concept at far lower risk than a long lease.

A test is not proof, but a concept that struggles in a pop-up is unlikely to thrive in a flagship. And a test that works gives the operator real figures to plan with.

A UAE brand entering Saudi Arabia carries its reputation across the border, good or bad. Guests who know the brand from visits to Dubai arrive with expectations, and a disappointing first venue can damage the brand in both markets.

Protect the brand by opening well rather than quickly: the standards trained in, the menu adapted carefully and the first months watched closely. A strong first venue makes every later one easier.

The Saudi venue's figures need to reach the group in the same form as the UAE venues': the same definitions of sales and covers, the same weeks, converted to the group's currency consistently. Without that, comparisons between the markets are guesswork.

Set up the reporting before opening, and agree with the local manager what is reported, when and how. A venue in another country that reports in its own way is a venue the owner cannot really see.

Agree in advance what would make the group change course: a date by which the venue should reach its break even point, a level of losses the group will accept and the options if the target is missed, from a new site to a partner to closing.

It is easier to decide calmly before opening than in the middle of a difficult year. A clear plan protects the UAE venues from a Saudi venue that does not work.

An invented Dubai group with three bistros is offered a site in Riyadh. Before signing, the owner spends a month in the city, eating at competitors and visiting sites at every hour. The bistro concept relies on wine for much of its margin, so the drinks side is rebuilt around specialty coffee and mocktails, and the financial model is redone at fifteen per cent VAT.

The group takes local legal advice and chooses a local partner, plans Saudization into the team structure, adds calories to every dish and checks that its till can meet e-invoicing rules. It opens a smaller first venue in a district with proven evening trade, with an opening team from Dubai for three months, and plans a second only after a full year of figures.

servearound can hold venues in more than one country in one network, each trading in its own currency, and the network dashboard adds them up in the network's own currency at the rate for each transaction's own date, so a group's UAE and Saudi venues can be read together. Each dish can carry its calories, or its protein, fat and carbohydrate, and the guest menu shows them.

servearound does not produce ZATCA e-invoices and does not connect to the Saudi tax authority's platform, so a Saudi venue needs a compliant e-invoicing solution for its receipts. Its menus and guest pages are in English only. Pricing is per venue, per month. See pricing and Analytics.

Familiar in many ways, different in enough to matter: guests, the weekend, tax, staffing and licensing all change.

No. Concepts that rely on alcohol need a different drinks model.

Fifteen per cent, compared with five per cent in the UAE.

Yes. Restaurants must show calorie content on their menus.

Saudi Arabia's requirement to issue invoices electronically through compliant systems, integrated with the tax authority in waves.

The national programme requiring businesses to employ Saudi nationals in a proportion of roles.

Many operators do. Take legal advice on the structure.

In person, after time in the city, based on trade rather than terms.

The Saudi restaurant market offers a UAE operator size, growth and familiarity, with differences that matter: each city is its own market, the weekend is Friday and Saturday, alcohol is not served, menus must show calories, VAT is fifteen per cent, invoices must follow ZATCA e-invoicing rules and Saudization shapes the team. Treating it as another Dubai is the commonest mistake.

Settle the questions before signing: the concept adapted to local guests, site selection made in person, the structure agreed with advisers, the team planned around national staffing, the systems checked for local rules and a budget built from local figures. Watch GCC restaurant trends city by city, and treat a Saudi venue as a new step in multi venue operations rather than a copy of the old one.