Welcome Rakan Sarawak June 2005

Rangkaian Khidmat Awam Negeri Sarawak

A MONTHLY SUPPLEMENT OF RAKAN SARAWAK BULLETIN

(People, events, activities and programmes which make for a total quality-managed Sarawak Civil Service)

ISSN 1394-5726

Online Publisher:

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Malaysian Franchise Industry No. 2 in Asia

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.