Question

strategy for business expansion. Where implemented, a franchiser licenses its know-how, procedures, intellectual property, use of its business model, brand, and rights to sell its branded products and services to a franchisee. In return the franchisee pays certain fees and agrees to comply with certain obligations, typically set out in a Franchise Agreement Discuss the following 1. 2. 3. History of franchising. Importance of franchising industry to the economics and social. Level of franchising development in Malaysia. Format: Font Font Size:12 Spacing Double No. of Pages Not exceed 5 page (exclude cover page and reference) : Times New Roman

subject: basic entrepreneurship

Answer 1

History

Franchising hasbeen important concept across 80 nations and has witnessed groeth rise since 1920 era and has seen uptick till 1999.and franchises like Mcdonalds, PizzaHut, Burgerking with one of best innovative models of profit sharing eith business expansion globalky. History also relates to Middle Ages where feudal lords sold rights of selling to people in grant of profit . Recently, the conversion Franchising has been widely practised wherein independent businesses turn into franchise under umbrella of franchisors brand reputation and thus benefit from it.

Importance

Flexibility in independence, continous monetary support from franchisors, secured refinances, umbrella brand name support helping major players like Mcdonalds to have continued funding and establish long term supply chain management, Six sigma, Qualified assurance and lean management framework. However disadvantage of such model include restrictions and resistance to innovation if it has less returns on equity and micromanagement .

Situations in Malaysia

Franchising is been great model here with royalty and advertising fee being low at 5%. Market is well concentrated with high HHI index and has continued levels of engagement with franchise companies for support through trade events and seminars and exhibitions .

Good funding rounds and relaxed capital control norms blending with easier government regulations make Malaysia an attractive destination for franchise opportunities. Also the socio cultural mindset for Entrepreneurship fuels this additional growth.