Govt expects franchise industry to comprise 9.4% of GDP by 2020

KUALA LUMPUR: The
Domestic Trade, Co-operatives and Consumerism Ministry expects the
franchise industry to make up 9.4% of the country's gross domestic
products (GDP) by 2020 from 2.2% in 2010, to be supported by four
strategic thrusts identified in the newly launched National Franchise
Development Blueprint 2012-2016 (NFDB).
The franchise industry generated a total revenue of RM22.34bil from 2006 to 2010 contributed by 404 franchise companies.
Its minister Datuk Seri Ismail Sabri Yaakob
said the aim for the sector to increase its contribution to the
national GDP would come from the growth of franchisors and franchisees
as a result of the initiatives outlined in the NFDB.
“We expect
the number of franchisors to grow to 1,140 by 2020 from 492 in 2010,
that reflects 15% of compounded annual growth rate (CAGR).
[You must be registered and logged in to see this image.] Ismail
Sabri at the launch of the National Franchise Blueprint at the PWTC
while his deputy, Datuk Tan Lian Hoe (left), looks on. — Bernama
“Also, the number of franchisees is expected to grow to 13,942 by 2020 from 4,838 in 2010, reflecting 24% CAGR.
“The
franchise sales per capita is also forecast to increase to RM2,990 by
2020 from RM470 in 2010,” he told the press after the launching of NFDB
with the slogan Franchise for All. Ismail said the NFDB, the
first blueprint to be established for the sector in Malaysia, was
created to be a platform for the development of the industry to be more
energetic, dynamic and progressive with the aim for Malaysia to be a
franchise hub in South-East Asia and Central Asia by 2020.
“It
consists of four strategic thrusts, namely to enhance the
competitiveness of Malaysian franchise, transform Malaysian business
through franchising, develop a competent franchise human capital and
establish a dynamic franchise ecosystem.
“Under these thrusts,
there are 36 strategies with 140 programmes and initiatives,” he said.
In line with the slogan of the NFDB, Ismail said the ministry now
encouraged that all levels of society to be involved in franchising.
“This
is because franchise is a simple form of having your own business where
the concept and products have already been planned.
“Thus, under
the NFDB, there will be initiatives and funds for micro franchise
scheme for business under RM50,000 where the youths, women, retirees,
indigenous and the disabled are encourage to participate.
“The Government has since August last year established an RM8mil fund for this purpose, managed by Perbadanan Nasional Bhd (PNS). So far, we have disbursed about RM600,000 from this fund,” he said.
Ismail said the Government was also in support of any franchise company that wanted to expand internationally.
Currently,
a majority of Malaysian franchises at international level were
concentrated in Indonesia and China. “We want more of our franchise
companies to venture into the rest of Asean countries and the Middle
East,” he said.
Additionally, Ismail said NFDB aimed to expand
the focus of franchise development from traditional sectors such as food
and beverage and clothing to new targeted sectors. These new targeted
industries were highlighted in New Economic Model and 10th Malaysia Plan
that included electrical and electronics, education, medical tourism,
eco-tourism, green products and secvices sectors.