1. 2013 | Issue 1 Magazine
Growing your
business through
franchising ACT
Franchise Disclosure LINKVE I
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Franchise Advice • Global Franchising Trends
International Franchise Directory • Business Advice
2. The Franchiseek Global Alliance Network was formed to
provide an international service for companies wishing
to expand their operations into global markets. The
Franchiseek Global Alliance Network provides that vital
link between business, the international customer and the �����������������������
route to success.
Global Partners
Melody Babiak - Franchiseek Canada Easy Franchise - Franchiseek Greece
Dreamers Franchise Consultants Inc. is a dynamic, Easy franchise provides specialist franchise
respected GLOBAL LEADER in International Franchise services for the development of your franchise
Development & Business Consulting including network in the Balkans region. Easy Franchise
candidate assistance with immigrating to Canada. It can help your business avoid critical delays and
is their team’s commitment to be the very best in the launch your business successfully within this
eyes of their clients, candidates and employees. region.
http://www.franchiseek.com/Canada/ http://www.franchiseek.com/Greece/
The Greek Franchise Association - FranStar - Franchiseek India
Franchiseek Greece FranStar has been established to fill the gap
The Greek Association substantially aims at securing between ideas and execution of Franchising.
and enhancing trust among the Franchisors, the Franchising in India is still in its nascent stage
Franchisees and the consumers. and there is a growing need for consultants
that can bring the real Franchising exposure and
http://www.franchiseek.com/Greece/
experience.
http://www.franchiseek.com/India/
Bill Andrew - Franchiseek Ireland The Romania Franchise Association
Bill’s experience and knowledge of franchising and
Franchiseek Romania
the SME community in Ireland is a valuable asset for RFA The Romanian Franchise Association is the
the growth of your franchise business in this region. voluntary self regulating governing body for
franchising in Romania.
http://www.franchiseek.com/Ireland/
http://www.franchiseek.com/Romania/
Pushpendra Sharma Jonathan Bees - Franchiseek UK
Franchiseek Singapore Jon Bees has been involved in the franchising
Mantraa Ventures is a business consulting firm that industry for over 16 years working with some
provides advisory and turnkey solutions on business of the UK’s top franchises including Interlink
strategy, real estate, retail, franchising, and interior and Dyno-Rod. Jon has worked alongside both
design. franchisors and franchisees and has a wealth of
experience in managing franchise networks and
http://www.franchiseek.com/Singapore/
franchisee recruitment.
http://www.franchiseek.com/UK/
www.franchiseek.com/Franchise_Global_Alliance_Network.asp
4. franchise
One Stop Shop
Franchising in
Singapore
Pushpendra Sharma (Managing Director, Mantraa Ventures Pte. Ltd., Singapore)
I
n this article, Pushpendra explains factors Moreover, there has been a fall in real estate rental
that make the retail landscape in Singapore so rates across prime shopping centres in Singapore, eg.
promising; also highlighting some of the key along the famous Orchard road. According to CBRE’s
considerations that make a franchise model retail real estate report in Q1-Q2 2012, rentals for
successful. prime retail spaces dropped to US$455 (S$574)
per square foot per year from US$470 (S$591.87)
The “Little Red Dot” is an epithet for the great nation
in the previous year. This improved affordability has
of Singapore. But by no means is this little red dot,
prompted many international consumer brands to
‘little’, especially in the evolving world of retail and
set up brick and mortar stores in Singapore, which
franchising.
was hitherto considered to be a rather expensive
Singapore’s retail industry has seen massive growth undertaking. Some of these international brands
either through direct expansion via company owned include H&M, Abercrombie & Fitch and Dean &
stores or through franchising. Since the year 2005, Deluca – the establishment of which generated huge
operating revenue has grown from $21 billion to excitement in Singapore – with locals & tourists alike.
$31 billion and the contribution of Singapore’s retail
Speaking of tourists, Singapore is considered to
sector to the Gross Domestic Product has been quite
be an Asian hotspot – a veritable melting pot for
steadily growing as well.
cultures and concepts. The local Singaporeans,
Adding impetus to this retail phenomenon is the expatriates as well as a large floating population of
Singapore governments policies related to foreign tourists contribute to this melting pot – and the
investments, which combined with investments mindset of “Trying something new”. This urge for
through government linked corporations have experiencing new things has given rise to a large
strengthened Singapore’s open, heavily trade number of concepts adapted very quickly from other
dependent economy. The World Bank’s “Doing countries and brought successfully into Singapore via
Business 2011” report ranked Singapore as the Franchising. Everything from Taiwanese bubble tea
number one country for ease of business. Moreover, and Manhattan style pizza’s to Singaporean cosmetics
the Government of Singapore is not only strongly and Italian apparel stores have been successfully
committed to maintaining a free market, but also franchised.
takes a leadership role in planning Singapore’s
Franchising is defined as “a continuing relationship
economic development across all sectors, including
in which a franchisor provides a licensed privilege to
retail. With its easy policies for setting up a company
the franchisee to do business and offers assistance in
and its attractive tourism related initiatives, Singapore
organizing, training, merchandising, marketing and
provides an ideal hub for growing international
managing in return for a monetary consideration.”
brands.
Franchising is a good way for a brand to rapidly
30 franchise focus www.franchisee k . co m
5. franchise
GLOBAL FRANCHISING
expand on its success – without having to commit too 8. Territorial protection:
much resource. For a franchisee as well, franchising a. It is important to understand whether there
represents an exciting proposition – to run a proven are any territory protection regulations,
business model in new territories, while getting access where one franchisee cannot open a store
to the best in class capabilities for organizing, marketing in another territory during sub-franchising.
and managing it. The franchisee can also take the
“Master Franchise” for brands, whereby they can drive 9. Non Competing Clause:
the expansion further across the region through sub- a. This is important clause to understand at
franchising, which is a tried a tested strategy. the time of leasing. For example, mall
owners typically have non-competing
Over the years, Singapore has become the retail head clauses in their leases, where brands with
quarters for various brands offering various franchising similar product offerings cannot co-exist
opportunities within the Asia Pacific region. To adopt in the same mall. In such a situation, the Pushpendra Sharma is the
a Franchising route, can be an extremely effective expansion of a brand/store through a Founder & Managing Director
and profitable way to grow a business. Although, franchise model can be hampered. of Mantraa Ventures Pte. Ltd.
franchising is unique and distinct from other business Mantraa Ventures is a Singapore
processes, some of the key elements that are needed 10. Location/Site Selection/Design: based - business consulting
to make a franchising model successful are: a. Location is perhaps the single most firm that provides advisory and
important aspect for any successful retail turnkey solutions on business
1. Passion / Business Acumen: venture. The site selection and location strategy, real estate, retail,
a. It is important for the prospective analysis should be carried out with the use franchising, and interior design.
franchisee to have a passion for the retail of experts to determine the market For more details email: push.
concept, brand and the necessary business readiness of the brand/concept and sharma@mantraaventures.com or
acumen to be able to grow the business. suitability of the location. visit www.mantraaventures.com
The implementation of the design needs to
2. Brand Equity / Concept:
be handled efficiently as well.
a. Generally, the brand and/or concept should
be a tried and tested model, something that These are some of the key aspects that a prospective
shows promise, is part of a growing trend, franchisee must consider before taking up a franchise,
irrespective of the type of sector. regardless of the concept. Competition is always
considered to be healthy and both international and
3. Expenses: Upfront Cost, local retail concept create variety, add flavour of choice
Operating Expenses: and keeps the brands relevant.
a. Prospective franchisees need to fully
understand all the associated costs, which In the last several years, we have seen some exciting
will help determine the ROI trends, taking shape within the franchising realm
(Return on Investment). in Singapore, eg. Gong Cha, Swensens, Gelatissimo
and many others. Some Singaporean brands too have
4. Support offered by the Parent successfully ventured into international markets, eg.
Company/Franchisor: Charles & Keith, Crystal Jade, Sakae Sushi, Bread
a. For prospective franchisees, it is important Talk, Thai Express etc. Since these brands are now
to know what kind of support is offered by established names in the business, they prefer to
the franchisor – eg. Assistance in sourcing adopt a franchising route, thereby unlocking their
real estate, providing market/location brand value with suitable partners.
analysis and turnkey design services etc.
Through the franchising model, we will continue
5. Restrictions on suppliers/vendors: to see various concepts evolving, which will further
a. It is important to understand whether there anchor Singapore position as one of Asia’s most
are any restrictions on appointing a vibrant and exciting destinations within the retail and
particular vendor and/or supplier. Usually, franchising industry in Asia in the years to come.
the parent company provides a list of As Fred DeLuca, founder of Subway Restaurants
designated and/or preferred vendors and had once said, “The world doesn’t stand still and
suppliers for its franchisees. we don’t deserve to be where we are unless we
6. Sub-Franchise Terms: stay ahead of things and take the necessary steps
a. The sub-franchise terms needs to be fully to remain competitive.” And franchising provides a
understood, if necessary in consultation great opportunity to brands to remain relevant and
with a legal and/or franchise expert. competitive while expanding their footprint in an ever
changing retail environment.
7. Training and Customer Service:
a. For prospective franchisees, it is important
to know what kind of training and support
the franchisor will provide on an ongoing
basis for all its partners and staff.
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