Malaysia witnessed yet again the annual Franchise International Malaysia 2010 (FIM2010) over the last weekend (30th July – 1st Aug 2010) which was organised by the Malaysian Franchise Association (MFA); the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) and Perbadanan Nasional Berhad (PNS) – a government agency tasked to lead the franchise sector development. This is the 17th exhibition and conference and is rated by the World Franchise Council as a four‑star franchise exhibition.
The FIM2010 is meant to create awareness about and promote existing franchise business systems. It is also intended to provide a platform for foreign franchisors to enter the Malaysian and/or regional markets.
New Comers In Franchising
First time participants are more conscious of their participation and are understandably apprehensive about their presence. However it is a highly recommended approach in order to create awareness about their brands and franchise business. Nobody wants to buy a franchise that is shy in promoting itself!
The new comer franchisors would have also received many enquiries during the exhibition and now faced with a big challenge in assessing these leads towards selecting and finally appointing them as franchisees. It is pretty certain that the franchisors would already have put in place a structured and objective processes and procedures to select and recruit franchisees. The recruitment initiatives must also have been based on an area or territory development masterplan. Stick to your selection criteria, plans and don’t easily get distracted!
Now that these new comers have seen the benefits of introducing and promoting their franchise businesses, they should not loose the momentum of participating in more exhibitions. As a franchisor you are now not only selling your products and services but must also promote and sell your franchise business!
Every year the exhibition also sees some repeat exhibitors. These franchise companies are aware of the need to be present and to seek new leads via the franchise exhibition. Most likely this is part of their bigger picture in promoting their brand as well as recruiting new franchisees.
For these companies, these activities are part of their cycle of franchise growth and development. They will also see their competitors’ new products and services and other initiatives. They will also take opportunity to network with the relevant people in the sector from the policy makers to the implementers to the non–governmental bodies and even foreign participants.
After the FIM2010 armed with new additional information they will go back to their planning boards to create new or realign their plans in addressing their objectives for 2011 or beyond. Stay static and you are fooling yourself!
What To Do Next?…
For the franchisors, the following tips may be of assistance in moving forward after FIM2010:
1. Review the franchise growth plans in line with the enquiries received from the exhibition. If the review calls for additional resources (human resource; capital; knowledge, etc), then these should be classified as prerequisites to franchisee selection process and appointments.
2. Assess and evaluate the potential and seriousness of the enquiries. It would follow that additional information and meetings or interview will be required from the franchisees.
3. Plan and execute the sequence of actions in the selection and recruitment processes.
4. Prepare for any potential request for information and documentation (e.g. disclosure documents, agreement, etc). Note: some documents may only be provided when the selection process has progressed up to a significant level (such as payment of earnest money as indication of seriousness of application).
5. Plan for a location/site visit and be prepared to objectively evaluate together with the potential franchisee.
6. Prepare to start the franchise outlet on urgent basis.
7. Prepare to orientate/familiarise; train and support the franchisee and his employees.
8. Assist the new franchisee to launch and promote the new franchisee outlet at the chosen location.
The organisers of the FIM2010 must be interested in continuously improving the exhibition specifically and the franchise sector as a whole. The country’s objective to create more franchise-preneurs stresses the need to have a more dynamic franchise exhibition.
As for the exhibition some of the following have been noted from the exhibitors and visitors
– More exhibitors should be encouraged to participate
– A wider variety of franchise businesses adds to the options available to the franchisees
– More participation from international franchise systems – ranging from exploratory; testing the market; brokering for deals; offering for immediate purchase by franchisees, etc. should be made available
– A three party matching (franchisor/franchisee/financial institution) is made available for the franchisee to be able to see and evaluate the preliminary chances of buying a franchise.
Feedback from franchisors on the issues and challenges for the development of their franchise businesses should be considered in the formulation of policies; regulations and guidelines so as to enable a more flexible and conducive environment. It has been said that the more advanced the economy is, the more flexible and less regulated the regulatory measures will be. As foreign franchise systems often come from more advanced economies, it will be a disincentive to them when they have to deal with a highly regulated environment. Is this the case that we see at the FIM2010, the numbers of franchisors from advanced economies are not participating?
As for the representation of the franchise sector, the exhibition is opened to members, non-members and international franchisors. However, there seem to be a lack of involvement by franchise businesses that ‘shake and move’ the franchise sector whether member or non members. Probably, just like any show, there must be some stars that attract the crowd to the show; anchor tenants that attract the human traffic to a shopping mall…
Whether you are a new or existing franchisor that conducts a franchise business; an association that represents the various parties in the sector; the government that establishes policies and regulations or; agencies that implements these policies to develop the franchise sector, there is a need to ensure that the economy is fed with high performing franchise businesses that create the exchange between the seller and the buyer that generate for everyone. This focus is critical as a faulty exchange event can lead to retardation of the economy.
The FIM can be seen as an indicator of the health and performance of the franchise sector and should provide a learning platform to achieve even higher and better performance and this can be achieved with the various parties being focused on the main agenda – “prosperity through franchising” (the battle cry for FIM2010).
Marzuki Ahmad is the Managing Director and Principal Consultant of Franchise Channel (M) Sdn Bhd. He also sits on the Franchise Advisory Board, which is responsible in advising the Ministry of Domestic Trade, Co-operatives and Consumerism and the Registrar of Franchise on franchising matters.
For more information, visit www.franchise-channel.com
Marzuki can be reached at email@example.com