Franchise highly resilient in facing economic challenges

22 February 2024

By Wartawan Nabalu News

KUALA LUMPUR: The franchise business is highly resilient and competitive in facing various economic challenges, both local and global.

Minister of Entrepreneur Development and Cooperative (MEDC) Datuk Ewon Benedick said existence of brands like 1901 Frankfurters and Gloria Jean's Coffees demonstrates that strong franchise business model can benefit more entrepreneurs who are interested in venturing into the franchise world.

He said this during the Launching Ceremony of 'Flagship Store', 1901 Frankfurters & Gloria Jean's Coffees, Signing of Strategic Agreement Malaysia International Franchise Sdn. Bhd.

According to him, Pernas has disbursed financing of more than RM1.3 billion, which has not only helped entrepreneurs in Malaysia but has also created over 35,000 jobs through the development of more than 150 franchise brands since 2006.

“This aligns with the goal of supporting micro, small, and medium-sized entrepreneurs (MSMEs) while helping them enhance their business capacity and competitiveness,” he stated.

He shared that in an effort to strengthen the entrepreneurial ecosystem holistically, the Cabinet has agreed to centralise the franchise ecosystem through governance and regulatory aspects of the franchise industry under the Franchise Act 1998, which will be placed under MEDC.

“Pernas and MyFranchise have been striving to create a more conducive, inclusive, and comprehensive entrepreneurial ecosystem in this country. This includes improving the supply chain, strengthening food provision centers or central kitchens, logistics, raw material networks, marketing empowerment, and others to further enhance interest and participation in franchise entrepreneurship,” he said.

He expressed his appreciation to the Chairman of Pernas, Datuk Hazimah, the Chief Executive Officer of MyFranchise, Ahmad Jeoffrey Aladib, the top management, and all members of Pernas and MyFranchise for their initiatives in developing franchise businesses and contributing to the strengthening of the country's economy.

He said the strong franchise business model can benefit more entrepreneurs who are interested in venturing into the franchise world.

Moreover, these franchises also prove their ability to accept and adapt to current needs and trends. For example, the use of digital technology to facilitate communication, improve service quality, and streamline processes, he said.

He welcomed the 'Flagship Store' concept for 1901 Frankfurters and Gloria Jean's Coffees, so that these brands can be closer and more relevant to the local community and be recognised globally.

Pernas and MyFranchise will invest RM62 million over a period of five years from 2024 to 2029 in the initiative to add 50 Gloria Jean's Coffees outlets and 100 1901 Frankfurters outlets, he shared.

With an estimated annual sales return of RM1.8 million for Gloria Jean's Coffees and RM600,000 for 1901 Frankfurters, it is expected to create up to 900 job opportunities over a five-year period, he said adding that the 'Flagship Store' for 1901 Frankfurters is not just about changing the logo or slogan, but it encompasses a comprehensive marketing, business, and communication strategy that is more effective.

With this, 1901 Frankfurters is also taking steps to expand into new regions, explore diverse market segments, and strengthen relationships with consumers from different cultural backgrounds.

The presence of the 'Flagship Store' for 1901 Frankfurters and Gloria Jean's Coffees can attract more customers, creating space and opportunities to expand market reach and promote franchise entrepreneurship.

“I hope that this will be an important milestone in generating interest in franchise entrepreneurship among the community and contributing to the achievement of the government's aspirations in improving the quality of life and the country's economy,” he said.

Also present during the event were Dato’ Ramanan Ramakrishnan Deputy Minister of Entrepreneur Development and Cooperatives, Datuk Haji Zamri bin Salleh Deputy Chief Secretary (Entrepreneurship Development) Ministry of Entrepreneur Development and Cooperatives, Dato’ Hazimah binti Zainuddin Chairman of Pernas Mazlan bin Ibrahim among others.