New plan to boost franchises

KUALA LUMPUR: The government is coming up with a blueprint to boost the country's franchise industry.
The National Franchise Development Blueprint will outline new
policies and directions, including strategies and action plan, to spur
development in the industry.

Deputy Prime Minister Tan Sri
Muhyiddin Yassin said the government was finalising the blueprint, which
was expected to be launched later this year.

He was delivering his keynote address at the launch of the
Franchise International Malaysia 2011 yesterday. Present were Domestic
Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri
Yaakob, his deputies Datuk Tan Lian Hoe and Datuk Rohani Abdul Karim,
and Malaysian Franchise Association president Abdul Malik Abdullah.

Muhyiddin said besides new strategies to further boost the
franchising industry, the government was also considering tax
incentives to promote franchise as the preferred business expansion
model.

He said the government was also collaborating with
industry players to have new franchise businesses in specific sectors
such as green technology, early childhood education, personal and
healthcare services.

"Another niche the government is developing with the private
sector through the cooperatives is the healthcare service; a dialysis
franchise developed through government support."

He felt the
innovative franchise models would ensure that the local franchise
industry would be able to capture markets and expand the nation's
franchise brands locally and abroad.

The government had allocated
RM8 million this year, under the 10th Malaysian Plan, as a soft-loan
scheme to assist the lower-income group to engage in small and micro
franchises as franchisees.

The scheme offers loans from RM5,000 to a maximum of RM50,000, with a low interest rate of three per cent.

"I
hope the lower-income group will take this chance to venture into the
micro franchise businesses to supplement their income. This is one way
franchising can help the rakyat raise their income level," he said,
adding that if successful, the scheme would be extended.

He also said that Malaysia was one of the few countries, if not the only, where the industry was given full government support.

So
far, he said the industry contributed more than 2.2 per cent to the
nation's Gross Domestic Product but that was a conservative figure as he
believed there were many businesses adopting the franchise system
without registering with the Registrar of Franchise.

He said for
the next five years, contribution from the industry was expected to
increase by twofold, or 4.3 per cent of the GDP, providing more than 2.5
per cent to the national employment.

This will continue to increase by more than fourfold to 9.4 per cent by 2020