beyondbrics

“Try your Big Mac”, a giant billboard advises patrons in Sarajevo, as the hours tick down to one of the biggest events since the Dayton peace accords. Nearly sixteen years after the war ended, the Bosnian capital has attained the ultimate sign of modernity: a McDonald’s on the main central thoroughfare, Marshal Tito Street.

It hasn’t been an easy ride for the US-based fast food restaurant, which will open its doors to Bosnians on Wednesday. It has had to overcome red tape, political interference and the jealousies of traditional restaurateurs to get this far, local observers said.

The US ambassador, Patrick Moon, and the head of the country’s three-member presidency, Zeljko Komsic, were to attend the glitzy opening party on Tuesday night.

Compared to the pre-opening marketing blitz, the signage on the actual Tito Street location looks small and restrained, in strict adherence to local regulations that local businesses tend to ignore.

Local cevapi (ground lamb and beef) and burek (meat pie) vendors had lobbied Bosniak (Bosnian Muslim) politicians to block the new competitor.

McDonald’s Corp started looking at the Balkan country of around 4m people soon after the 1992-1995 war, the bloodiest of the Yugoslav break-up, which had left 100,000 people dead and over 1m displaced. With tens of thousands of Nato peacekeepers, EU and US overseers and western aid workers around, a McDonald’s franchise seemed logical and lucrative, regardless of all the local ethnic sensitivities and complex post-war political structures.

The US embassy took up the fast-food chain’s cause early on, seeing the need for an iconic foreign investment to send a positive signal to other foreign multinationals. For years, however, McDonald’s found itself blocked at every turn by local authorities – perhaps signalling that Bosnia-Herzegovina really wasn’t truly ready for the FDI needed to rebuild its shattered economy.

Still today, with international peace-keeping scaled back, the country is a potentially attractive, yet severely underdeveloped, consumer market.

To gain its position as the first fast-food company in Bosnia, McDonald’s Corp has had to abide by the country’s internal divisions, awarding two “Developmental Licenses” (franchises) to separate local partners: Sarajevo-based Gliese 581g for the mainly Bosniak and Croat Federation; and Belgrade-based Dreamfoods (already the licensee for Serbia) for ethnic Serb-dominated parts of Bosnia-Herzegovina.

According to McDonald’s Europe:

The Developmental License structure is a form of franchising that McDonald’s has been using for more than 30 years to grow the brand by leveraging expertise and entrepreneurial spirit on a local basis.

In other words, the group invests nothing and only takes a royalty, while the Developmental Licensee builds the brand in a new territory.

The group has tried to move the two territories forward in step, with the next branch to open in Banja Luka, the de facto Bosnian Serb capital, within months, after obtaining permits there, local media said.

Steve Easterbrook, president of McDonald’s Europe, said:

We are pleased to bring McDonald’s to new customers in Bosnia and Herzegovina. Our Developmental Licensees are well placed to provide an outstanding restaurant experience and long term sustainable benefits for local staff, suppliers and the McDonald’s brand.

While a few Mc-Sceptics (both ethnic Serb and Bosniak) grumbled about the steady march of globalisation, most citizens appeared to welcome the arrival of the US restaurant chain, with its uniform standards, friendly service, instant name recognition and (many people think) scrumptious menu. “Look,” a Sarajevo taxi driver said, pointing to the famous golden arches logo plastered on hundreds of downtown lampposts. “We’re a normal country now!”

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