Small U.S. Franchises Head to the Middle East

Jonathan Spiel has tried three times to turn his beloved Tea Lounge in Brooklyn into a thriving chain. Four years ago, he closed his second location after his landlord raised the rent. Another outlet failed because of poor sales, and he abandoned his last attempt when a co-op board imposed tough rules. With the sluggish economy crimping his cash flow, Spiel has found a new way to expand: franchising. In Kuwait.

Spiel hadn’t planned on doing business in the Gulf emirate. But his first—and, so far, only—taker is in Kuwait. How does a Brooklyn lounge that boasts a bar and is popular with nursing mothers become a winning concept in an Arab country where alcohol is banned and women must be modest? “It’s a tea culture, yet there are no tea places,” says Spiel. While that’s not technically true, the desert state does have two things Brooklyn lacks: oil money and a hunger for more U.S. brands. For franchisee Mohammed Al-Arbash, whose family’s holdings range from its original jewelry business to recycling machines, that makes Tea Lounge a terrific bet. “I don’t care if it’s famous,” says Al-Arbash. “I was looking for new ideas in the United States.”