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Franchise Highlight

Franchise Crisis Management During The Pandemic COVID-19 Outbreaks

Our current situation is deeply unsettling. Both franchisors and franchisees are facing many obstacles, including ensuring the businesses they have put their blood, sweat, and tears into continue to stay afloat.

Here are the highlights insight from Zoom Webinar programme which focussed on franchise crisis management during the pandemic Covid-19. It was organised for the first time by the Malaysian Franchise Association in collaboration with the Franchise and Direct Sales Development Division (BPFJL).

Managing Your Franchise Post MCO

By Mrs. Hsien Naidu (Astreem Consulting Pte Ltd)

Through accelerated Digitisation, the World has shrunk whilst simultaneously becoming more fragmented. The definition of Competition has shifted to a different degree. We used to compete locally in our physical territory but now, with the increase and ease of doing business through e-commerce as well as staying connected through online meetings, barriers of entry for international competition has disappeared.

Through Digitalisation, everything has become more accessible across all channels. As we are being stucked with social distancing, the world has opened up further through digitalization. This means competition now can come from any direction, any country.

If there is anyone who can add enormous value to a stressed franchisee at this time, it is their franchisor. What can franchisor do from a strategy perspective is to control the franchisor’s revenue sources, managing the quality control, accelerated innovation and ensure the business continuity planning.

Managing Legal Issues during and Post MCO

By Mrs. Wong Jin Nee (Messrs Wong Jin Nee & Teo)

Most common legal issues during this unusual time is compliance with various laws including RMCO/Franchise Act 1998/PDPA, Franchise Agreement & other agreements, Business continuity plans (BCP), franchise system, Training & Support and SOP & Training manuals.

The franchisors need to explore on the best ways or alternative options to cope with the issues. It includes working together closely with the franchisee and consider on providing enhanced support and guidance without additional fee. Besides, finding the solutions together with the franchisee also one of the best ways to reduce the possible legal issue. It might include by assisting the franchisees to negotiate with landlords or supplier. Then, customize a very good SOP/Manuals to adapt with the SOP stated by the government and the franchisor must ensure the effectiveness of the communication. Ongoing engagement and communication will lead to long term inter-dependent relationship between the franchisor and the franchisees.

 

KPDNHEP Scrutinise Initiatives to Spur Franchise Industry

By YB Dato’ Rosol bin Wahid (Deputy Minister of Domestic Trade and Consumers Affairs)

The Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) is currently exploring several initiatives to stimulate retail activities including franchise businesses affected by the COVID-19 pandemic. The Ministry was also working to boost domestic trade and distribution activities, as well as consumer confidence in spending. As such, KPDNHEP is in the process of fine-tuning the planned programme and the Ministry hopes that all industry players will be involved in providing support. A survey of the impact on franchise operations during the implementation of the Movement Control Order (MCO) among industry players showed that the industry is experiencing a significant decline in revenue. The highest reported decline was 80 percent the food and beverage (F&B) and education sub-sectors.

In addition, the shortage of workers, the scarcity of raw materials due to logistics and operational costs incurred such as rent and utilities are among the challenges faced during the MCO and the Enforced Movement Control Order also become one of the significant impacts.

Source: Malaysian Franchise Association (MFA)