Franchise Business Opportunities in Malaysia

Franchising Business in Malaysia
Executive Summary:
Franchising business always brings successful but its not easy to manage or run the business. Franchising business has few types such like business format franchising, product distribution franchising, trademark franchising and so on. Franchising business provides some advantages to franchisee and also provides some disadvantages. Relationship also include in the franchise agreement. Franchising business is very unique and also has some benefits of choosing this business. Before a person chose franchising business some of the reason should consider and also some of the reason to avoid the failure those are important to follow. As franchisee its very complicated, to choose the organization and evaluate every part. Franchisee need to know about the company franchise process, company history, survey the market, market demand, competitor, marketing strategies and requirements. To make a franchise business I need to know the company, franchise agreement, process, type, cost and facilities. Market demand and market analyze will depend on the franchisee local area. Location, site selection and other activities are done by franchisee but in some aspect franchisor may need to approve. To evaluate the company franchisee need to know about the company financial report, also to know company economically succeed or not.
Franchisor Turk & Fillmore
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Introduction:
Franchising as we know it today originated with the Singer Sewing Centre developed by Isaac Singer in 1858. After he had invented the sewing machine, Singer encountered two problems when he took it to the market. The first was that customers had to be taught how to use the new invention before they would buy it. The second was that Singer did not have enough capital to manufacture his machine in large numbers. He then came up with the idea of selling the rights to local business people to sell the sewing machine and train those who bought it. Once he embarked on this route, his enterprise expanded rapidly. Fees earned from the license rights helped to fund his manufacturing costs and, because each franchise was selffinanced, Singer was able to tap into the entrepreneurial attributes of his franchisees. This franchise model was copied in several industries. Coca-Cola was able to expand throughout the United States by shifting the burden of manufacturing, storing and distributing its product to local business people who acquired bottling rights. Car manufacturers who had been spending enormous amounts of capital tooling their assembly lines found they could develop retail distribution networks using capital provided by independent dealers. Oil companies such as Standard Oil and Texaco granted franchises to convenience stores and repair mechanics across the US. In the 1950's Ray Kroc saw the potential in franchising a successful hamburger stand. He has been compared to Henry Ford for bringing the assembly line to the fast food industry. Be they coffee and sandwich bars, fried chicken, pizza or taco diners, many food outlets are now franchised worldwide. A franchise is an agreement under which a franchisor licenses a franchisee to operate a developed method of doing business that is identifiable as being associated with the franchisor. The franchisor provides ongoing guidance, systems and assistance in return for periodic payment of fees and/or purchases.
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A franchise generally takes the form of:
a business format franchise in which the whole business concept is licensed, including the name, appearance and method of carrying on the business a product franchise in which the product is manufactured and/or supplied by the franchisee as occurs in the retail, fuel and motor vehicle industries.
Whichever format is of interest to you, buying into a franchise can provide many benefits. Some of these include:
the independence of small business ownership supported by the benefits of a big business network an established reputation and image, established management systems, large scale advertising programs, group purchasing and a marketplace profile that can reduce the level of risk in increasingly competitive and specialized markets
open and ready access to four key factors of business success-planning, management skills, marketing know-how and product knowledge.
Before entering into a franchise, there are important issues to consider. A franchise agreement usually imposes certain legal obligations on both the franchisor and the franchisee. If you are thinking of buying a franchised business, familiarize yourself with the expectations and conditions attached to the franchise arrangement before proceeding.
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Franchise Business Opportunities in Malaysia:
Franchise business in Malaysia has seen a significant growth lately. Franchise is now a popular trend of doing business among new entrepreneurs in Malaysia For those who have been eyeing of setting up and run their own business, franchising has provided a way to start a business with guidance and technical support from franchisor with successfully proven way of running the said business. While, for franchisors, franchising has opens up opportunities for them to expand their brands and businesses. As of August 2011, it was reported that the Malaysian Government through its various agencies has assisted and funded 80 local companies to franchise their businesses in order to expand their brands through franchisees local and abroad. There are now 378 registered local franchise brands in Malaysia. And this number is seen growing almost daily as the government has provides more emphasis and support having realized that doing business through franchise system could create win-win-win environment (for franchisor, franchisee and government too) if carried out properly. From these registered franchise brands 4912 franchisees have been created locally and another 1321 franchisees have been established in 53 countries worldwide.
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Definition of Franchising:
Franchising is the practice of using another firms successful business model and brand to operate a similar business. For the owner of the business model or better known as FRANCHISOR, franchising is an alternative to expand the business through third party investment.
What is Franchise?
Franchising is a form of marketing and distribution in which the franchisor grants to an individual or company (the franchisee) the right to run a business selling a product or providing a service under the franchisor's business format and identified by the franchisor's trade mark or brand. In total we can say franchising is a form of business organization in which a firm which already has a successful product or service, enter in to a continuing contractual relationship with other business franchisee to operating under th e franchisor s trade name and guidance, in exchange of royalty or fee.
Financial Assistance:
Incentives and financial assistance provided by Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) are: Franchise Development Assistance Fund (FDAF) Local Franchise Development Program (LFDP) Franchise Soft Loan Scheme (FSLS)
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Financing assistance provided by Perbadanan Nasional Berhad (PNS) is: Franchisor Financing Scheme Pre-Franchise Scheme Executive Franchise Scheme Franchisee Financing Scheme
Legal Accept for Franchising Business in Malaysia:

For Franchisee
A good decision since investing in a proven business model like an established franchise will reduce the risk of doing business, especially for new entrepreneurs. The franchisor is obligated to guide and train their franchisees to start, operate and manage the business as successfully as their own outlets. Franchisee can also leverage on the established brand and existing business networking and market. For Franchisor
The main advantage that franchising has over expanding a business on your own is that others are investing their resources such as time, skills and money to grow your business and brand. A franchisee has greater incentive than an employee to manage the business well because of their direct stake in the business. The franchisee's success is the success of the franchisor and vice versa. Any successfully legally approved business can participate.
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Approved for a Franchise Malaysia:
Acquiring a franchise is not a simple matter of having money to invest. It is of course a necessary requirement but it is not sufficient to get you approved for a franchise. A franchisee is important to a franchisor. A franchisee gives a franchisor the means to expand the business and the brand without putting up any additional capital. Franchising increases a company buying power and helps the franchise company realize profits from other avenues. But a franchisor cannot award a franchise to just anybody who is interested. A franchise company has toiled hard and long to establish its name and reputation. Choosing a franchisee unwisely will lead to adverse repercussions. For one, franchise companies are required by law to report in the Uniform Franchise Offering Circular whenever a franchise fails. The more the failed franchises, the less attractive the franchise company becomes to potential franchisees. A franchise failing thus reflects badly on the franchisor. It is thus understandable if franchisors have a rigorous evaluation procedure to screen franchise applicants. It is not done to discriminate against anyone. What it does is ensure that the franchise would go only to people who will conform to the business; winning strategies and those who will protect and enhance the brand. If I am one of the countless franchisees interested in acquiring a franchise, then I better demonstrate my willingness to learn, follow and conform. Franchisors do not require blind obedience but they do expect franchisees to work within their set guidelines which have already been proven to be effective.
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To get success is the franchisor success so the franchisor wants to make sure that I will not willfully disregard established practices. I need to have a general grasp of business concepts if I want my franchise application approved. Experience is not necessary but understanding definitely is. A franchisor will not award my franchise if I cannot be assured that my understand enough to be able to learn what I need to know. I will become a more desirable franchisee if I have demonstrable leadership skills. I must convince the franchisor that I know how to manage people and I know how to deal with my employees, the franchise management team and my other cofranchisees. To get approved for a franchise, I have to convince the franchisor that I am perfect for the opportunity. Only then I can be assured of a slot.
Benefit of franchising
Rapid Expansion - In todays marketplace, the window of opportunity for a new or unique business concept closes very quickly. Franchising permits multiple units to be opened simultaneously, gaining a foothold over would-be competitors. Market Dominance - Multiple locations increase the companys competitive advantage over similar type businesses. Vendor of the business - Franchising ensures that qualified "managers" are operating additional locations rather than employees. A new business demands a great deal of time, effort and sacrifice. Franchisees are motivated by their ownership of the business and the capital they have invested. Superior Buying Power - Franchisors that purchase products and services for their franchise network can often negotiate volume discounts from vendors and suppliers. Sharing a portion of the saving with franchisees provides higher operating margins and a competitive advantage over other similar businesses.
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Brand Recognition - As additional locations are opened, name recognition increases. Nowadays, customer loyalty towards recognized brands is at an alltime high. Consumers typically feel more secure frequenting a business they recognize by name.
Franchises offer the independence of small business ownership supported by the benefits of a big business network. You dont necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model. Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise. It may cost less to buy a franchise than start your own business of the same type.
Buying a franchise means buying an established reputation and image, proven management and work practices, access to national advertising and ongoing support.
Drawbacks of franchise
Buying a franchise means entering into a formal agreement with your franchisor. Franchise agreements dictate how you run the business, so there may be little room for creativity. There are usually restrictions on where you operate, the products you sell and the suppliers you use. Bad performances by other franchisees may affect your franchises reputation. Buying a franchise means ongoing sharing of profit with the franchisor. Franchisors do not have to renew an agreement at the end of the franchise term
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Franchise relationship
Area development franchise
This license usually grants the franchisee the right to open a certain number of franchises in a given area. There is usually a production schedule where the area development franchisee must open a certain number of franchises during a certain period. As long as the area development franchisee stays on track in opening franchises in the area, he/she has an exclusive area where no other franchisees are allowed to open a franchise. Area development franchisees also typically pay reduced franchise and royalty fees. Master franchise
Sometimes called a regional developer, a master franchisee has all the rights of an area developer and usually assumes a larger area. The main difference is that the master franchisee, in addition to opening franchises at reduced franchise and royalty fees. The master franchisee usually receives a part of the ongoing royalties paid by each franchisee. There may be additional income available from distribution of products through the franchisees in the area and possibly some real estate interests in franchisee locations. Unit franchise
Unit franchise is an individual entrepreneur, or small business organization, holding the right given by the franchisor to operate a specific business in a specific location or premise only. Also unit franchises are not allowed to practice sub-franchise.
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Gains and weaknesses of franchisee business:

Gains of franchisee Proven product: The most valuable advantage to a franchisee is that you are selling a proven product or service. Customers are aware of the product, they also know the name, and they know what to expect. Marketing expertise: Franchisors spend millions of dollars on national or regional advertising to help build and image that independent business could not afford. Franchisor also develops print, broadcast, and point of purchase advertising. Financial assistance: Some franchisor provides financial assistance to new franchisees. This assistance typically comes in the form of trade credit on inventory or overhead reduction by franchisors choosing, purchasing and owning buildings and real estate. Professional guidance: A franchise can provide a source of managerial and technical assistance not available to an independent business. Most franchisors provide training, both as preparation for running the business and as instruction after the business gets off the ground.
Weaknesses of franchisee Cost of franchise: The service, assistance, and assurance in buying a franchise come at a price. Every franchisor will charge a fee or a specific percentage of sale revenue. The disadvantages of the franchisees are that they are usually required to raise most of the capital before they begin operations.
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Restriction on freedom: The restrictions placed on their freedom may be a problem for some franchisees. Most people open their own business because they have desire for independent, but franchises have policies and procedures that must be followed to maintain the franchise agreement.
Unsatisfied expectations: Even though a franchisee is bound by contractual agreement, overdependence on the franchisor can still pose a problem. Franchisors do not always know what is best for every set of local conditions. The franchisee must be willing and able to apply his or her own managerial decisions in running the business in the way best suited to local market and avoid being overly dependent on the franchisors guidance. The flip side of overdependence is dealing with a franchisor that does not provide all the assistance that the franchisee expected.
Benefit and drawback of franchisor

Benefits of the franchisor Expansion with smaller capital investment: From the perspective of the franchisor, the biggest advantage of offering franchises is the expansion of its distribution sources with limited equity investment. The franchisor fee from franchises provides capital to the franchisor. The franchisor therefore does not have to borrow from lenders or attract outside investors. For a business with limited capital, franchising, in which franchisees share the financial burden, may be the only viable way to expand.
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Multiple sources of revenue: franchisors often build several sources of revenue into their franchise agreement. These sources might include the franchise fee, which is paid when the agreement is signed, a percentage of the franchises monthly gross operating revenue, and revenue from selling th necessary products and supplies to the franchisees.
Increased Royalties: According to Franchise Key, a franchisee may be more motivated than an employee, such as a branch manager of a satellite operation. Since the franchisee has a personal financial stake in the success of the business, he may be more likely to work harder. For the franchisor, the result is more revenue through increased royalties.
Ease of Quality Control: A franchise agreement requires the franchisee to follow corporate guidelines when operating his business. For example, a McDonald's franchisee is required to make chicken burgers a specific way and May not deviate. For the franchisor, this means fewer concerns about the quality of the product that is sold, and he doesn't have to worry about a rogue franchisee who wants to do things his own way.
Drawbacks of franchisor Share profit: The profits involved in the franchise are also a disadvantage. Though the actual business is owned by the franchisor, the profits do not go directly to him rather they are shared among the franchises. This will make a lesser reap for the franchisors as their returns are lower. Legalities: The profits involved in the franchise are also a disadvantage. Though the actual business is owned by the franchisor, the profits do not go
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directly to him rather they are shared among the franchises. This will make a lesser reap for the franchisors as their returns are lower. Less control: Even if the franchisees follow only one specific contract and franchise agreement, there is still the tendency for these to go through loopholes. There is no way a franchiser can gain total control over what the franchise branches do or how they operate. With that the overall reputation of the company could be at stake with just one false move of a franchise branch. Franchisee disputes: Friction between franchisees and franchisors may arise over such issues as payment of fee, expansion, and hour of operation. These potential conflicts point to the importance of good communication between both sides and the need to have a clearly written franchise agreement.
Recommendation for franchise business:

Too dependent: when franchisee become dependent too much on franchisor, failure can happened because franchisor can train franchisee and help in major decisions but few decision franchisee need to take with his skill and creativeness. Family involvement: while doing franchise business franchisee need to avoid the family involvement because sometimes its hard to control over family and decision can be influence by too so family involvement is one of the reason of failure. Unrealistic goal: franchisee need to make his business goal more realistic and take the decision on that basis other than some time franchisee goal more unrealistic as they took the business very lightly so failure happen .
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Too much competition: sometimes too much competition can cause failure in the franchise business. Franchise business should be unique and when there is so many competitions its hard for franchisee survive in the market with a quality product.
Poor location: location is very important if the location is very hard for customer to find and also not in the appropriate popular place with the product or service requirement its become one of the reason of failure so franchisee need to avoid.
History of my Franchisor:
Founder: Arsalan Usmani Work: Managing Director & Chairman Turk & Fillmore, London, United Kingdom, Director V-moda, Los Angeles, California, U.S.A Education: Academy of Art University, MFA Fashion Design & Merchandising San Francisco, California. NED University of Engineering and Technology Textile Engineering Founded: August 14, 2009 About the company: Men's premium shoes, reflecting the perfect blend of true style and genuine craft. Company Overview:
Turk & Fillmore is an intersection at the heart of the legendary Fillmore district in San Francisco, California. The area is home to many famous Jazz bars and clubs and the vibrant and stylish culture of Jazz music.
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Inspired by the old school yet stylish attire of the Jazz musicians, the design philosophy of Turk Fillmore resides in celebrating the art of shoe making. We are about the ever-evolving comfort of a hand stitched leather shoe as compared to a rigid, machine made product. This is the difference between someone playing your favorite melody live on a saxophone, vs. a digitally composed tune. We hope that our shoes would bring as much pride to any who wear them, as they do to those who have created them. Have a discerning journey on the road of life! Our shoes are borne out of more than a hundred steps required to hand-craft each pair, utilizing only the finest leathers, molded specifically on Italian lasts to create sheer prestige. The signature hand-stitching details allow the shoe to adjust specifically to your foot shape. From the leather-lined contoured shoe bed, to hand stitched leather sole and stacked heel topped with a rubber strike, each element exalts the prestige of the shoe in its entirety. We hope that our shoes would bring as much pride to any who wear them, as they do to those who have created them. Have a discerning journey on the road of life!
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Turk & Fillmore is currently available in world the following fine retailers: Present Showrooms & Retails Outlet locations: Pakistan - Lahor Design Emporium by Ammar Belal 39 A/2 Mahmud Kasuri Rd (Hussain Chowk), Gulberg 3, Lahore, Pakistan, 54660 Phone:+(92) (42) 3587-3828 SAUDI ARABIA Iconic Riyadh Gallery-Riyadh Cityscape-Jeddah The Mall of Dhahran-Dammam QATAR Republic of Iraq Oceanic Gulf International Corporation Kuwait, Office 08, Floor 02, Abdul Aziz Iconic The Hyatt Plaza, Doha Salaam Building, Jaber Al Mubarak Street, Sharq, Kuwait City - State of Kuwait info@ogigroup-kw.com www.ogigroup-kw.com Tel: (+965) 22454485/86 UNITED KINGDOM: GREEN CHAIN GLOBAL (UK) LTD. 100-A, NORTHMOOR ROAD M12 5RS MANCHESTER UK London 9 Aldham Hall New Wanstead London, E11 2SQ Tel# +44 7428 661675 iloveyou@turkandfillmore.com
Pakistan - Karachi English Boot House Park Towers Clifton Karachi Dolmen Mall, Tariq Road, Karachi Shop No 1, Uzma Arcade, Main Clifton Road, (Schon Circle) Karachi U.A.E Iconic Deira City Center- Dubai Al Ain Mall, Kuwaitat Area, Al Ain, U.A.E
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United States Of America Suave Gordon San Francisco, CA. Tel #305-814-5397 suave@turkandfillmore.com Russian Federation Oceanic Gulf International Corporation Office 08, Floor 02 Abdul Aziz Salaam Building Jaber Al Mubarak Street, Sharq, Kuwait City - State of Kuwait info@ogigroup-kw.com www.ogigroup-kw.com Tel: (+965) 22454485/86
CANADA: Turk & Fillmore, Canada. Suite # 307 65-WYNFORD HEIGHTS CRESCENT TORONTO, ONTARIO M3C 1L6 Tel #416-510-8059 Bangladesh Turk & Fillmore Premium Gallardo 169, North Gulshan Avenune, Gulshan -2, Dhaka 1213, Bangladesh. Info_bd@turkandfillmore.com Tel: +88-02-9664317 Mob: +88-01711318814
Now its time to start new retailer outlet at the country where most international people used to travel from whole world Malaysia. As per staying in here last 1 year during my study period I have observed very carefully, Malaysian locals, - Malay, Chicness & Indian like to wear classily footwear during festival season. They do not look about the price in tern of chose. If, we talk about class & royalty of the product then Turk & Fillmore could be one the best alternative brand for Malaysia locals & tourist. We can follow that by some Shoes & Sandals products pictures: See Appendix 1
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My franchising primary location will be most happening city Kuala Lumpur, inside KL have lots of famous shopping mall, among them Times Squares, Mid Valley Mega Mall, 1 Uttama Mega Mall, IOI Mall are landmark point of attraction.
Store Design:
Retails Premium store design will be followed same as Turk & Fillmore did in there others branches all over the world. Has to maintain the standard they used to attacked people as a premium shoe outlet. Some others store pictures given below: See Appendix 2
Site selection:
After choosing location, we have to proceed to site selection. Site selection proposal should send to the franchisor to approval. Turk & Fillmore have few common things color and style which my company needs to follow through.
Market demand:
Turk & Fillmore are very popular in fashion industry London, Bangladesh, Pakistan, U.A.E, Los Angeles as the one of the best premium shoe outlet in Bangladesh & Pakistan. In Bangladesh there are few premium shoe outlet such Bata, Apex, Hush Pappies, Fortuna, Cats Eye, Ecstasy, Yellow are doing great business. People in Bangladesh especially university students and job holders, executives, top managements has good taste to wear fishable designer shoes. There is great demand in Pakistan as well. London showroom create huge impact in the certain fashion industry .To see such demand I am sure Turk & Fillmore will be much demandable because of the quality, design, trendy & affordable price for selected target people.
Franchisor Turk & Fillmore Page 19
Elevations and Promotion:
Social media, such as Face book and Twitter, now provide a new platform from which to market to the consumer and broaden their customer base. With social networking sites, search engines and a other mobile internet devices, a we can now reach consumers that have a specific interest in the product and market to them directly. As you Turk & Fillmore do their main marketing though Facebook. Facebook: www.facebook.com/turkandfillmore Website: www.turkandfillmore.com
Brands:
Turk & Fillmore has the trademarks which register under London based. Also Turk & Fillmore grant the franchisee non-exclusive right to use the trademarks to operate in Bangladesh, Pakistan, U.A.E, Russia, The marks are owned by Turk & Fillmore London, Turk & Fillmore wholly owned by the group Chairman & Managing Director.
office.
Legal fees:
I have to pay the official fees to get the master franchising though the government
Rules & Regulation:
As Turk & Fillmore became an International brand. Beside that Mr. Arsalan Usmani the owner of Turk & Fillmore is my personal friend and we used to work together last 5-6 years as his main production supplier from Bangladesh. For me the rules & regulation would be very less and flexible. He just asked to follow the same standard he do have for his others premium outlet. For establish store as he
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force to take master franchising, so that later on I could open many store inside the Malaysia under my own franchising license.
Conclusion:
Franchising is one of the finest ways to start a successful businessman. There is few category of franchising. Nowadays franchising business is very widespread in the world. Some countries has so many franchising include house cleaning, house painting, also restaurant is very old and famous. Franchising business gives a person new way of the surviving successful business to run, but it doesnt mean to control franchising commerce is easy. Although franchising has such paybacks or returns it doesnt mean it dont have drawbacks. Franchising business format is easy and popular. : Turk & Fillmore very successful business in the world shoe business market. To joining the Turk & Fillmore will be great prospect for me. Turk & Fillmore delivers franchisee so many amenities which are very valuable to run a business. Franchising business is the best prospect to start up successful business. In doing this the Turk & Fillmore the shoe industry has increased their sales for the first quarter of 2010 and the production is set to continue to grow. Turk & Fillmore franchise has shown that they have the precaution and capability to identify shifting consumer trends and adjust their businesses and marketing approaches consequently.
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Reference:
http://www.franchisedirect.com/information/introductiontofranchising/franch isingbasics
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Appendix 1:
Party Shoes
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Appendix 2:
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Franchise Business Opportunities in Malaysia

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Franchise Business Opportunities in Malaysia

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Franchising Business in Malaysia

Franchisor Turk & Fillmore

Franchising Business in Malaysia

Franchisor Turk & Fillmore

Franchising Business in Malaysia

A franchise generally takes the form of:

Franchisor Turk & Fillmore

Franchising Business in Malaysia