There’s More To Be Done for the Franchising Sector
by Marzuki Ahmad
The Franchise International Malaysia 2011 (FIM) event is here again. It is a much looked forward event in Malaysia given its successful run for so many years. However, it seems that it has not achieved higher levels of excitement and leverage for new knowledge. Everyone involved need to look at it further than just an exhibition or showcase of franchise businesses. The event is a learning opportunity for everyone. We need to look beyond.
Platform for the Exhibiting Franchisors – Growing the Franchise
The franchise business owners who are on track to grow their franchise will have in their sights on the visitors who are looking to invest in franchise system. This orientation is only logical as many visitors at the FIM are looking for businesses to invest in.
Hence the exhibitors’ objective is to secure as many leads as possible and look forward to developing them so that they can achieve their goal of growing their franchises.
For them the critical issue at hand is to ensure that the personnel at the exhibition are armed to the teeth to attract the number of leads targeted. The exhibition booth is designed to inform the participants about their business potential and expressing the ‘promise’ of success by investing in the business as a franchisee.
The exhibition personnel hand out brochures and leaflets which carry messages emphasising on the recruitment drive. They also go on overdrive in their selling and focus on recruitment, giving less priority on other issues. Or worse still, they are there just to give out leaflets.
Moving beyond for this type of franchisors means that they need to present themselves in a more strategic manner.
Noted that they need to recruit, but they need also to:
- Strengthen their brand and presence in the minds of the visitors and the public
- Stand above others as they will also be compared with others
- Draw ideas and opinions from the visitors on how their business, products and services can be improved further
Platform for the Visiting Non-Exhibiting Franchisors – Assessing Gaps
Franchisors who do not participate in the exhibition, probably will attend as visitors. The mindset is to ‘come-look-see’; meet friends and network with the relevant authorities. However it is opportunities lost, if they do not exploit the wealth of information available from the various exhibitors.
Even though these franchisors are only visitors to the exhibition, their objective to participate should include researching for materials, ideas, concepts that will improve their franchise business. Come in with mindset that you can learn from others.
For the visiting, non-exhibiting franchisor, moving beyond for them means one needs to learn from the exhibition. Learning from others at this exhibition will highlight the opportunity and weakness gaps that you identify when you compare yourself with others.
The learning approach may include:
- Assessing how other franchises are offering their products and services and look for opportunities and parallels which and how you can explore and exploit
- Assessing your own franchise in comparison with others with a view to see whether you are lagging behind; just about okay; or you are there at the front – do this with an unbiased mind
- Discover the preferences of the general visitors and relate them to your own franchise business
Platform for the Franchisors – Understanding Franchising Success
For all franchisors, the FIM is the event that showcases some of the successful franchises in the country and a glimpse of a measure of success achieved by the exhibitors. As the event also include a conference and seminars, it is only right to say that these are discovery opportunities for franchisors in identifying the success formula.
All franchisors need to take this opportunity to discover what makes successful exhibiting franchisors tick. The success may be achieved through a combination of a deep understanding and exploiting of the market and its environment; having a good business and franchising model and plan; and enabled by competencies and business infrastructure.
For these franchisors, they need to move beyond visiting the FIM by discovering and identifying the formula and ingredients that make a franchise successful. Do not just look in awe at the success of others but try to discover by extracting information from the relevant people to gain insights.
Discover and prepare to exploit the future of demand in the franchising sector
All franchisors interested in understanding the factors contributing to franchising success need to consider:
- Discovering the current and future franchising scenario in terms of opportunities and challenges by drawing insights from the policy makers and implementers; the more successful franchises (exhibiting and non-exhibiting); and other players in the franchising sector. Have this agenda when you visit the FIM
- Uncovering the secrets of success of established franchisors
- Discover and prepare to exploit the future of demand in the franchising sector
Platform for Franchisees – Assessing Opportunities
Potential franchisees are the significant portion of the number of visitors to the FIM. Their mindset is to explore the opportunities in franchising and probably to prepare themselves so that they will make better informed decisions about investing in franchising systems.
Their key objectives are to identify and explore the franchises that are recruiting franchisees and also to seek ideas on how and what business to consider investing in.
Moving beyond for the potential franchisees may include:
- Doing more than that what are already being done in exploring the business opportunities from the exhibiting franchisees by not just looking at the promises of the franchisors but also to look with a planning horizon of not less than 10 years ahead
- Feel the pulse of dynamism of and support for the franchise sector and be guided by them when evaluating a franchise system
- Exploring the financial and non-financial incentives and assistance programmes provided by the relevant authorities and getting preliminary assessment of your position so that you can plan ahead to prepare yourself before you invest
Platform for MFA – Understanding the Pulse of the Sector
As organiser of the FIM event, they would probably be preoccupied with the familiar issues such as the number and quality of the exhibitors; the logistics of the event; the conference and seminar contents and delivery and a whole lot of things to prepare and be ready for the big day.
Primarily the FIM is intended to showcase not only the authorities governing the franchise sector and franchise businesses but also to educate and inform the public about the success of franchising in Malaysia.
Moving beyond for MFA will entail:
- Attracting bigger franchise players by making FIM as a stepping stone into a bigger market, not just Malaysia
- For FIM to take the lead in promoting franchising in the region and wider, MFA need to take the lead in creating collaborations with organisations in the region and create a more attractive market for multi-national franchisors
- Sharing of new knowledge on franchising by experts and practitioners who are drawn from the best in the region, if not the world. It is no longer exciting to have experts drawn from the local market
Platform for Policy Makers and Implementers – Understanding Expectations of Investors
The policy makers and implementers have a big stake in making the FIM successful. They are mindful of the direction of growth of the franchise sector. Malaysia’s expectation of the contribution of the franchise sector to the Economic Transformation Plan is high and the event is considered as a representation and accumulation of the development, so far, of the sector.
This major stakeholder looks forward to an attractive and sustainable growth of the sector contributed by the franchisors. Hence there is a need for them to understand the expectations of the various investors in the sector – franchisors; financiers; services support institutions; suppliers; franchisees, etc.
One such solution is that many businesses are now opting for licensing
Moving beyond for these stakeholders means that:
- There is a need to understand the expectations (on policies; regulations and incentives, etc) of all the players and contributors within the sector using an approach that will allow and encourage expressions of opinions by the various stakeholders from within and beyond borders
- Facilitating the development and growth for the sector with approaches such as bringing FIM or ala FIM exhibitions to locations beyond borders. There have been events organised along these lines by the authorities
- As this event is a convergence of players in the sector, we should ‘round-up’ and obtain opinions and ideas that will contribute in meeting with the expectations of the franchising sector
MOVING BEYOND FIM
The FIM has seen many successful franchises going through the many years of organising. Much is also said about our franchising success but over the years, we are more or less still at the same level of excitement.
The new excitement levels for the FIM should be derived from:
- Improved profile and mix of the exhibitors,
- Quality visitors
- New achievements or milestones (of knowledge and business infrastructure) in franchising being presented at the event
- Evidence and outputs of collaboration with strategic partners locally and regionally (governments, NGOs and business organisations)
- Creative and timely incentives (financial or otherwise)
Some other additional factors that can contribute to the creation of the environment that will promote the next level of excitement are:
- A sense of shared purpose and direction by way of a national plan or other instruments that will develop the franchising sector
- Convergence thoughts and actions of lead organisations involved in the development and management of the sector
- Push and pull factors for the sector e.g. in the form of creative and timely incentives (financial or otherwise)
Conclusion
The franchise sector is made up of businesses which have its own set of priorities and timing. If the franchising environment in Malaysia cannot keep up with or lead into achieving the expectations of these businesses, they will create their own solutions to overcome the gaps that are caused by the environment. One such solution is that many businesses are now opting for licensing as an approach to expand their business (at the expense of growth in franchising). Perhaps another solution is not to franchise in Malaysia!
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 marzuki@franchise-channel.com
