Globalising Malaysian Businesses Through Franchising.

Franchising is still relatively a new word when it comes to Malaysian businesses. This idea popped up when our former Prime Minister Tun Dr Mahathir Mohamad, urged Malaysian business owners to jump onto the bandwagon of franchising their businesses. Though many people seemed to be very interested in franchising, we noticed that they did without proper planning. They went through trials and errors and most of their franchising ventures turns out to be failures. They simply couldn't compete with their foreign counterparts. So we sat and thought about how franchising giants like KFC and Mc Donalds's could become so successful. And we realised that there had to be somebody behind them formulating certain business strategies, improving their business systems and propelling them to become global household names in the business world.

For the past five decades, franchising has been the most effective method of expanding a business. Many people see McDonald's as a huge business chain all over the world. But they forget that once upon a time in 1955, McDonald's started with only one outlet. Today, they have over 32,000 outlets all over the world and their success is solely through franchising their business. Now, you can see the impact of franchising on a particular business, if done properly.

Through over the past decades, franchising businesses usually consist of fast food restaurants but today, the trend of franchising has shifted towards the service industry. Today, hotels workshops, petrol stations are being franchised. Franchising also helps elevate local companies into the international business arena, and to us, that is globalisation. So it's not wrong when I say that globalisation happened five decades ago when KFC first emerged in the market through franchising. Eventually they were able to capture and influence our lifestyle, and today, having a burger or French fries for breakfast, lunch or dinner is not unusual. Thus, franchising definitely has a huge prospect if tapped into correctly.

Many business owners today enter into franchising only to make a profit for themselves. They often forget that there are two other partners involved in a franchising equation- the franchisees and their customers. See, if a franchisor's customers don't like his products, his franchisees would eventually not have any business or sales. And if they close down their business , the word would get around and this can have a negative impact on the franchisor's business.

Nowadays, people want to be frnachisees are very smart. They do a lot of research and homework to study about a company they want to franchise from and its business. They would want to know if the franchisor can give them full support, or if their products can go beyond Malaysia and appeal to foreigners. Once they are convinced, only then would they enter a franchising agreement. So, the word here is trust. And the franchisors must not betray that trust.

Another problem franchisees often face is the reluctance of franchisors to reveal everything about their business to them (franchisee). Asians, especially, are very hesitant to tell their business secrets to others. They often fear that people who know their secrets would then venture out on their own and use the secrets to start another business. So, they'd usually teach only 50% and keep the rest to themselves. Now this kind of mentality cannot exist in franchising. The word franchise itself comes from the word franc, which simply means honesty. So, to what extend are you willing to share this secret with your franchisees is another important factors.

Malaysian business owners should change their mindset and understand that in franchsing, it's always about a win-win situation.