The owner of Fox Group, Harel Wiesel, is holding discussions with restaurateurs Ari and Yoram Yerzin about establishing a Starbucks franchise in Israel, according to a Yediot Achronot report last week. The Fox Group is known for its clothing stores but sales of clothing have been affected more and more in recent years by the popularity of online shopping among Israelis and the group is exploring other areas of investment.

Starbucks opened in Israel in 2001, establishing six branches in Tel Aviv, but all the stores closed by 2003 due to low sales. The chain also planned on opening a store in Jerusalem but decided against it due to the fear of terror attacks, a very real fear in those days of the Second Intifada.

What went wrong? Some say that Starbucks coffee couldn’t compete with Israeli coffee. Others add that Israelis like to sit and linger in cafes but Starbucks only offered the option of “to go” coffee. However, Starbucks has outlets in the countries surrounding Israel and has seen much success in the Middle East, not to mention Europe and China, which has over 3,500 outlets, so the differences in Israeli culture should be able to be bridged. Would Starbucks do better now due to Israelis’ increased familiarity with the chain due to increased travel abroad?

The three businessmen are also discussing opening a franchise of the American burger chain Shake Shack, a fast-food chain that sells hamburgers, hot dogs, French fries and of course milkshakes, the inspiration for its name. The chain started out as a hot dog cart inside Madison Square Park in 2001 and eventually expanded to a stand, a store and then a chain. It now has franchises all over the United States and the world, including the Middle Eastern cities of Muscat, Beirut, Dubai, Abu Dhabi, Doha, Kuwait City, Riyadh, Manama and Jeddah.

(YWN Israel Desk – Jerusalem)