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1 from burgers to idols an afternoon on flipping burgers (and franchising of course) 5th december 2007 suaran singh sidhu.

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Presentation on theme: "1 from burgers to idols an afternoon on flipping burgers (and franchising of course) 5th december 2007 suaran singh sidhu."— Presentation transcript:

1 1 from burgers to idols an afternoon on flipping burgers (and franchising of course) 5th december 2007 suaran singh sidhu

2 2 Looking at the burger Why eat burgers? Tracing the history of franchising Why it came about and its genesis from licensing arrangements

3 3 What s holding all that meat in! Structure of a franchise Fundamentals of starting a franchise Why have it?

4 4 Ramly Burger The Malaysian perspective Franchise Act 1998 Is it working? Who does it apply to?

5 5 home fries Whats in it for you? Building a practice in the area of franchising

6 6 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

7 7 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

8 8 Msian Side (cont d) Prior to Franchise Act 1998: Contractual principles Contract is King - freedom to enter into contracts Imbalance of power

9 9 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?

10 10 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 sametaste

11 11 Franchise Act (cont d) Msian Franchise Register Distinction between foreign andMalaysian franchisor Caution: commencement of Franchise Agt subject to necessary registration Principal >> Master >> Sub.Franchisee (bread, then meat, then mayo….get it right!)

12 12 Franchise Act (cont d) Any fries or coke with that? Documents to be submitted Conditions by the Registrar Advertisements on selling/buying franchise Registrars decision and appeals The Fund

13 13 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

14 14 Lapping it up: How long? Mandatory: 5 years Franchisee to renew - Franchisor obliged to agree Justified: considering the investment of Franchisee in the business

15 15 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

16 16 Jom, let s start our Ramly How franchising will benefit you? Lets start with your area of practice What is the economic climate? How big is franchising in Malaysia? Is it worthwhile?

17 17 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

18 18 How do I get a bite? Target industries that are likely to franchise: Food and beverage - Carls 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

19 19 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!

20 20 Should the CLE be franchised? Thank you, hope you are sufficiently full

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