200 likes | 410 Vues
from burgers to idols. an afternoon on flipping burgers (and franchising of course) 5th december 2007 suaran singh sidhu. Looking at the burger. Why eat burgers? Tracing the history of franchising Why it came about and its genesis from licensing arrangements.
E N D
from burgers to idols an afternoon on flipping burgers (and franchising of course) 5th december 2007 suaran singh sidhu
Looking at the burger • Why eat burgers? Tracing the history of franchising • Why it came about and its genesis from licensing arrangements
What’s holding all that meat in! • Structure of a franchise • Fundamentals of starting a franchise • Why have it?
Ramly Burger • The Malaysian perspective • Franchise Act 1998 • Is it working? • Who does it apply to?
home fries • What’s in it for you? • Building a practice in the area of franchising
Sandwich to Burgers • Franchising is a form of ‘cloning’ • Uniformity • Success attracts success • Reputation guarantees repeat customers • But…. • Akin to giving guns to your enemies • Effectiveness of non-compete clauses - questionable • Franchisor dropping out
ode to ramly burger: Msian Side • Opportunities for small or start-up companies • Big Co. leading Small Co. • Franchisor brings: • international/regional experience • IPRs • Tech, trade and tricks of business
Msian Side (cont’d) • Prior to Franchise Act 1998: • Contractual principles • Contract is King - freedom to enter into contracts • Imbalance of power
Franchise Act • Franchise industry - highly regulated • Controls terms of contract • Controls and introduced scheme of registration of franchisors, franchisees and franchise brokers • Q: is the wrapping too tight?
Franchise Act (cont’d) • Section 4 - elements of a ‘franchise’ • Summary: a licence to operate a ‘success’ business formula or system • What can be franchised then? • Think big - burgers, TV shows/formats, gyms, …. Look around you, what else is popping up everywhere with the same ‘taste’
Franchise Act (cont’d)Msian Franchise Register • Distinction between ‘foreign” and “Malaysian” franchisor • Caution: commencement of Franchise Agt subject to necessary registration • Principal >> Master >> Sub.Franchisee • (bread, then meat, then mayo….get it right!)
Franchise Act (cont’d)Any fries or coke with that? • Documents to be submitted • Conditions by the Registrar • Advertisements on selling/buying franchise • Registrar’s decision and appeals • The “Fund”
Kurang Mayo! Some things are a must • Franchise Agreement • Mandatory terms • Territorial rights • Fee: for franchise, promotion • Royalty • Nature of assitance from Franchisor • Duration and terms of renewal • Effect of termination/expiration • Failure >> Null and void • School of hard knocks approach
Lapping it up: How long? • Mandatory: 5 years • Franchisee to renew - Franchisor obliged to agree • Justified: considering the investment of Franchisee in the business
Binning it: Termination • Termination of Franchise Agreement seen in bad light • Limited circumstances • Breach of confidentiality • Non-competitive restrictions • False accounting • Non-payment • IPR infringement • Repeated breaches
Jom, let’s start our Ramly • How franchising will benefit you? • Let’s start with your area of practice • What is the economic climate? • How big is franchising in Malaysia? • Is it worthwhile?
Practice in Franchising • Majority of franchisors are foreign • Establishing some knowledge in franchising means ability to have a ‘foot in the door’ of these companies • The possibility of spin-off opportunities: • Trade mark registration • Incorporation of companies • Litigation for troublesome franchisees • Dealing with foreign counterparts
How do I get a bite? • Target industries that are likely to franchise: • Food and beverage - Carl’s Jr re-entered the market • Concept stores - Gap, Banana Republic • TV Formats - American Idol, Deal or No Deal • Restaurants/Cafes - Starbucks,Big Apple Donuts • Speculated: Home Deco, Car Grooming, Specialist Spas
Keep Biting… • Once you have targeted these industries, then start looking for opportunities with similar companies. • Have a web presence - crucial • In a matter of time, you are bound to fetch a franchising brief and you can build your practice • …and when that happens, be prepared!
Should the CLE be franchised? Thank you, hope you are sufficiently full