As of 2004, Malaysia’s Franchise Industry stood second as
the best franchise management system in Asia and ranked number 21 at the world
level. This is quite an achievement
considering the franchise industry is still at an infancy stage in the
country. Franchising, a fast growing
new economy sector, is a versatile way for manufacturers to diversify their
operations. The government is also
promoting the franchise industry to increase the number of local entrepreneurs,
particularly Bumiputras, in the country.
Given the potential for economic growth through
franchising, the government appointed Perbadanan Nasional Bhd (PNS) to
implement Malaysia’s franchise development programmes. RM600 million has been allocated towards
this purpose. One franchise programme
is the investment and loan schemes for franchisepreneurs – Mezzanine Franchise
Scheme, Smart Partnership Franchise Scheme, Budding Franchise Scheme and
Franchisee Financing Scheme. Other
franchise programmes include Education and Training, Local and Overseas
Promotion, Franchise Right of Purchase, Product Development, Database,
Franchisor Credential, and Franchisee Matching Activity.
In his budget 2005 speech, the Prime Minister, Dato’ Seri
Abdullah Haji Ahmad Badawi, gave the assurance for the continuance of the
Graduate Franchise Programme under Bank Pembangunan & Infrastruktur
Malaysia to produce 150 trainees annually.
“The target is to develop 1,000 new franchisees and 50 franchisors under
the Eighth Malaysian Plan (2001-2005),” revealed Datuk Mohamed Khaled Nordin,
Minister of Entrepreneur Development and Cooperatives.
The efforts of the government have been fruitful, as the
franchise industry has registered a healthy 10% growth over the past few
years. According to a Malaysia-US
market research, Bumiputras now represent 40% of franchise owners in Malaysia
as compared to less than 10% a decade ago.
Sales from franchise products went from RM8.6 billion in 2001 to RM10.7
billion in 2002, representing a good 24% increase in total sales figure. At present, there are 321 Malaysian
franchise companies with 3,700 franchisees in the country. The best prospects identified for franchises
in Malaysia encompass fast-food outlets, English educational and training
products, healthcare, gift and souvenir shops, and franchise consultancy.
Sarawak has its own successful home grown franchise –
Sugarbun, the popular fast food chain who have targeted to open 150 outlets
throughout Malaysia by 2010. Sugarbun
Corp Bhd currently have 48 outlets in the country of which 9 are franchised
outlets in Sarawak, 1 in Sabah and 4 in Brunei. Sugarbun has expanded overseas with its first franchise flagship
restaurant in Chittagong, Bangladesh, which opened for business end of last
year. Negotiations are in now progress
for Sugarbun oulets in Oman, Sri Lanka, Ho Chi Minh City and Shanghai.
