Interview with Reliance Franchisee

Charting A New Frontier As Reliance Franchisees

The Reliance Travel Franchise is one true-blue Malaysian homegrown travel franchise system. It has won almost every award out there for excellent franchising by riding strategically on a highly successful business model, which boasts over 40 years of top-class travel management services and practices.

But what makes Reliance really stand out is none other than the passionate and highly determined franchisees who make things happen – everyday. Only very selective and carefully evaluated prospects can join the Reliance list. But how easy is it for a franchisee to excel with Reliance? For this special Franchise Asia feature, we spoke to four specifically selected Reliance franchisees on what makes them among the elite Reliance franchisees.

Persistence Pays for This Husband & Wife Team
Fantasia Holidays
Ashraf Ali & Alisha Chow

What made you decide to take up Reliance franchise business?
It was basically due to Reliance’s positive corporate image in the travel industry. It’s a trusted brand with a successful business model, clear marketing strategies, wide range of products, where we don’t have to search separately, e.g., tickets, tours, hotels, FIT products, and so on. We know it would be difficult to compete if we’re to operate as an independent travel agency. The best way was for us to ride on Reliance’s capability and recognition in the industry. By being a Reliance franchisee, we’re also able to reach out to its existing customer base within our locality – thus a ready market is assured. Hence, there’s no need for us to reintroduce ourselves.

You started out during the H1N1 epidemic which could have been very tough on your business. How did you manage to turn the situation around in your favour?
Being a ‘newbie’ franchisee in the travel industry, we faced lots of challenges when we opened our business in 2008. In the first few months of opening, we were struggling with the new technology and in managing our business. A few months later the global economic crisis hit, and soon after, H1N1! You can imagine our predicament. Our cash flow was running low, and we were literally struggling to maintain our financial expenses. To keep going, we managed FIT bookings, ticket sales and incentive tours. One of the main stumbling blocks was the heavy rent that we were paying for our huge office at Kuchai Lama. We were about to raise the white flag.

As a last ditch effort, we emailed Robert (Deputy General Manager, Reliance Franchise Development) for help, and that made all the difference. We discussed our situation and soon after Robert introduced David Yee, their financial controller to assist us with a RM50,000 micro loan. After Matta Fair in Sept 2009, our business started to pick up. We did RM1million of sales for the last quarter of 2009 compared to RM800,000 sale for the first three-quarter of the year. But the high rental was a drawback still, and was a tough call to move out just as our business was picking up. We looked for another area with low rental around Kuchai Lama but Robert advised us against it. So we chose Bandar Dato Hussein, Cheras instead. We’re glad we were attentive to the advice given.

How has the relocation helped to turn your business around?
It was absolutely a right move as we believe Cheras will become a booming market in the future. As mentioned earlier, maintaining such a heavy monthly rental at Kuchai Lama was burdening us. We were paying six-fold for the same rent amount that we’re paying for our new premises. In Kuchai Lama, we received lots of inquiries, but one way or another, found it difficult to close the sales. The enquiries were more for budget holidays which did not fall into the high-end markets that Reliance focused on, like Europe and Australia. We found the market at Cheras to be different. Since we reside here, we have already built lots of friends and contacts. After moving here, we have effectively improved our productivity to respond to both our new as well as old customers. Many were pleased to have a Reliance outlet in their neighbourhood. They also saw it as a convenience – away from all the traffic jams in city centre where many ticketing agencies are located.

Before starting with Reliance, you’re involved in other business which didn’t progress well. What happened?
We were involved in a student recruitment service where we often purchase air tickets from independent travel agents. We had a bitter experience when one travel agent closed down the company suddenly and failed to refund us. We lost almost RM30,000 just like that! We were so bitter and disappointed but the experience taught us a lesson. So, we decided to open our own travel agency instead. Someone recommended Reliance, and after going through Reliance’s franchise concept and plan, we haven’t looked back since.

How has the franchisor supported you over time?
Reliance has been providing tremendous support in terms of technical, software training and Reliance Reservation System, all instrumental in helping us respond quickly to our customers. They also provide training programmes on day-to-day operations, finances, sales and staff training, and whenever we require them to resolve everyday business issues. Another very important type of support is Reliance’s outstanding marketing service via A&P services. Inviting us to participate in Matta Fairs and attend motivational programmes has helped us to become a more efficient and productive franchisee.

Are you happy with the performance of your franchise and where do you see your business in the next 3 years?
We’re very pleased for having the opportunity to work with Reliance. Our success is truly due to the fruits of our collaboration together. As for our expansion, we’re very excited about moving forward as the market is growing at a fast pace. Together with the expansion of our customer database and network within the community, we expect to increase our sales to at least twice of our current sales of RM3.5 million. We strongly feel this can be done, and more so with tour offer examples such as the recent Reliance’s ‘Buy One Free One’ promotion to Japan, where we sold all our seats within a few days of the sale.

If there’s one winning strategy that set you apart from other Reliance franchisees, what would it be?
We were very focused in our business and we follow the franchisors’ instructions very closely. We do not try to reinvent the wheel and are definitely very focused and single-minded. We’re part of Reliance; we work as a team and share problems and opportunities. We treat every call as important. For instance, we closed a sale of RM100,000 recently just because we responded to one call. We even closed a 13 passengers’ sale to Europe from a customer in Sarawak who we’ve not met until now. It all boils down to building human relationships. We treat every customer as important.

The Entrepreneur with the Multi-Unit Franchise
Lambang Saga Travel & Tours
Lee Seng Khoon
CEO

You are so far the only Reliance franchisee that owns and operates two units. One in Taman Tun Dr Ismail and the other in Seremban. What made you take up two units?
The reason we looked at the travel business was it complemented our core company businesses which is mainly involved in property development, and hospitality sector in which we are very focused on. In this regard, we are and have been very focused since our early involvement in this business that we chose to participate in the supply chain as an intermediary in the distribution of travel products without being involved in the origination. For this, we partnered with two of the top names; Best Western for hotel operation and Reliance for the travel and tour operations. Our partnership with Reliance is a good fit as Reliance ‘wholesale’ a diverse range of quality products at reasonable prices for our onward distribution.

Since both your outlets are rather mature with the Seremban renewing for the next term, please share with us your success story.
Reliance has been there from the beginning when we started almost five years ago. They gave us clear guidelines on what to do and follow in our operation in a way where we took minimal risk. As for Seremban being a mature market, that’s because we entered into a market where other operators thought was a small market, and not in the direction of their growth. This gave us an opening. I feel the travel industry is already a mature market not only in Seremban but all over the country. The important thing is how you manage a market when the competition changes in the future.

As for our success, we owe it not just to ourselves alone but all the stakeholders who have been equally successful together with us. To sum it up, it is the willingness to compromise and strong partnership amongst the stakeholders that stood up well during the many tests over the last four years that has made this partnership successful.

Please share with us how you managed to maintain a business rapport and relationship with the franchisor?
Well, I think in every sense, in every business you do, there’ll always be some ups and downs. There’s no perfect equilibrium. It’s like a marriage. Both parties are needed to make it work. In order to have good business rapport and relationships, the intention and action of one must be coherent and genuine. You cannot expect to benefit at the expense of the other. This is the overriding policy that we use in all our business dealings, be it in property development, hotel or travel business. This policy is never compromised but we may overlook at times. Nevertheless, we constantly remind ourselves of this policy when we make any business proposal or enter into any negotiations.

How do you see both your outlets operating in next three years?
I would say these two outlets had stood the test of time during the financial crisis. Corporate clients have always traveled, and because of that we made more profits than other times. Both TTDI and Seremban outlets are mature outlets and hence, generally will see only organic growth which is in line with the general economic condition. Having said that, we will innovate within our focus area, e.g., product distribution, to stay relevant as we see more people buying online nowadays. It is also under such circumstance that we need to expand our focus on the ‘delivery experience’ to customers in order to stay ahead of online purchasing.

Being a young entrepreneur, your outlook on business could be very different from other operators. Can you share with us what’s behind your entrepreneurial drive?
Very different. I travel a lot. When I took up the Best Western Hotel franchise, I didn’t just take their word for it and sign up as a franchisee. I stayed in 15 different Best Western hotels throughout the world to find out how good they are and how different Best Western is from other hotels. I want to do things differently and radically, not because I want to do it but because it has worked successfully in other countries. We don’t want to reinvent the wheels – we just want to adapt the model. And I just want to share these ideas with our partner – Reliance, so that it benefits others.

Serving Kota Damansara & Beyond
Hartamanis
Puan Aminah M. Yusof, Operations Director
Vence Wong Weng Kin, Manager, Retail Business Operations

You are already involved in a number of retail chain businesses. Why did you take up the Reliance franchise business in addition to your other businesses?
We didn’t want to concentrate on just one line of trade. We’re open to any business that matches and strengthens the direction of our business model, and the travel agency business was one of it. The travel business allows us to expand with low risk. Many people have advised us against it, saying that the travel business is a sunset business, but we don’t think so. The next step was to look around for a business partner to assist us with helpful information, fundamental advice and experience, and Reliance fit perfectly.

You started the Reliance franchise in May last year. Being fairly new to this travel business, how would you rate your level of success today?
According to the market situation and statistics, there is a great deal of business potential for us. There was less capital outlay. For instance, like in our other retail business, we have to worry about stocks and shelf lives. In travel business, we enhance people’s lives through travel; we’re selling something intangible – we sell dreams which you can’t feel and touch. Even though online booking is available, we still believe a pleasant and cordial interaction with customers makes a lot of difference. And we know our customers can sense this as well. The proof is, they keep coming back to us. All we had to do was to expand our knowledge by working hand-in-hand with Reliance. Tapping in the right direction helped us to cultivate and capture the demand from this market.

What were the challenges you faced as a new member of the franchise family chain?
Business planning is key for us to be successful in this very challenging segment as it is dependent on worldwide state of affairs, e.g., disaster, economic scenario, political issues, etc. It was not easy for us when we started. We’re new, very green in the business. This is our very first travel agency business. Business was very slow during times of disasters and calamities like boycotts in Bangkok, the volcano eruption in Europe and riots in the Middle East, which put a damper on our business. But with our connection with our business customers and suppliers who were our regular customers, we’re able to pull through.

How did Reliance support your business and what are the initiatives introduced by you to grow your business?
Reliance consistently offered support via above-the-line marketing, e.g., print advertisements. For example, when we first opened in Kota Damansara, Reliance’s timely print advertisements greatly helped to announce our whereabouts, which we could not have done on our own. This is one way how we work together. All printed material was readily available for our staff which shortened their learning curve. And when our staff were still new, Reliance helped us to train and assist them in learning.

On our part, we bought iPads to help our customers visualise their holidays, which directly helped us to improve our sales. We consult and communicate constantly via telephone and mail with Reliance. Currently we are on an awareness drive and we hold road shows in hypermarkets and shopping complexes. To gather better exposure, we also participate in MATTA Fair. To tap into the PJ residents’ base, we’ve also created our own Facebook and have connected with the Kota Damansara community Facebook. We believe with all our efforts, and Reliance’s support, we’re already well-known in Kota Damansara.

If there’s one winning strategy that set you apart from other Reliance franchisees, what would it be?
We create our own business plan and business budget settings yearly, to assure that we can create success in the industry. We constantly sit with Reliance management to review our business progress and to discuss ways to improve them. Like I mentioned earlier, little things make a big impression. For example, with our customer relationship management process we not only update our customers on the latest promotions but greet them personally. Customers have even commented positively on us allocating customer car bays for them which make them feel important and appreciated.