Energy costs put pressure on franchise outlets in Lebanon

Energy costs and operating expenses are among the leading challenges to keeping franchise outlets running in Lebanon, according to Yahya Kassaa, president of the Lebanese Franchise Association. With businesses relying on generators and backup power systems, and using financial transfers to cover expenses, managing operations has become a priority for companies active both in Lebanon and abroad.

Electricity is a burden for multi-outlet businesses

In remarks published by Al-Dawra on 27 October 2026, Kassaa said rising operating costs posed an additional challenge for businesses in the franchise sector. He linked these pressures to global inflation, the energy crisis and higher electricity bills and operating expenses, at a time when companies face difficult conditions both locally and in the overseas markets where they operate.

Kassaa described Lebanon as one of the two most expensive countries for energy, pointing to reliance on electricity generators and backup power systems. That assessment remains his own; the central operational issue is the cost businesses bear to secure electricity for their outlets.

This is particularly significant for companies running multiple outlets, which Kassaa specifically identified as facing a growing burden. The issue is not confined to a single location or bill: it concerns a company's ability to meet operating commitments across an outlet network while reviewing its performance in Lebanon and abroad.

His remarks did not include a standard energy bill figure or specify energy's share of total business expenditure. The warning therefore cannot be turned into a general financial estimate applicable to every brand. His clear message was that electricity and operating costs are adding pressure to an already difficult trading environment.

Financial transfers to keep businesses running

In an interview with Al-Markazia published on 26 October, Kassaa outlined some of the measures companies had taken during the crisis to keep trading. He noted that some businesses had brought in money from abroad, while transfers had also moved in the opposite direction.

He explained that these transfers provide temporary cover for operating expenses until conditions return to their previous state. This distinguishes operating support from investment in new expansion: the purpose Kassaa identified was to sustain businesses and keep them running, not to announce openings or additional franchise agreements.

He also referred to the relocation of some international brands from Lebanon to nearby countries, including Cyprus, the UAE and Saudi Arabia, during the crisis. He did not name the brands or companies concerned, or specify the number or value of these moves. His comments therefore offer an indication of the adaptation strategies he described, rather than a detailed account of individual brands' movements.

These remarks suggest that, in the cases he discussed, financial support between businesses in Lebanon and those abroad does not flow exclusively in one direction. However, they do not establish how much money is being transferred, how widespread the practice is across the franchise sector, or whether it offers a lasting solution to rising expenses.

Outlet reviews do not mean a wave of closures

Alongside his comments on operating costs, Kassaa told Al-Dawra that there were, at that point, no signs of widespread closures that would cause serious concern. This is an important distinction when assessing the position of outlets, rather than automatically equating financial pressure with market exit.

He explained that companies were reassessing their outlets in Lebanon and abroad and monitoring developments before deciding on their next steps. Reviewing performance and costs is therefore part of a wait-and-see approach, not in itself an announcement that a particular brand will close outlets or reduce its network.

This distinction is reinforced by Kassaa's comments to Al-Markazia on the importance of knowing how many sales outlets are actually operating. He said the association would conduct a count in future, having revisited its assessment of the franchise sector, which it intended to publish later. He gave no date for either publication of the study or the outlet count.

What does this mean for franchisees?

Kassaa's remarks highlight two connected issues for franchisees: the cost of keeping outlets open and the type of funding used to cover it. The temporary financial support he described may meet expenses for a limited period, but the information disclosed does not demonstrate that energy pressures have eased or outlet performance has stabilised.

Equally, the absence of widespread closures does not remove the need to monitor each outlet, just as a review does not mean its future has already been decided. The practical takeaway: when assessing an outlet's ability to keep trading, distinguish between its regular revenue, its electricity and operating costs, and the temporary transfers helping it meet its commitments. Separating these elements provides a clearer basis for operating decisions.