June 2, 2004, Kuala
Lampur - StarBiz - Big potential in local
franchising, says consultant
November 12, 2003, Kuala
Lumpur - StarBiz -
What a franchisor should
bring to the table
November 5, 2003, Kuala
Lumpur - StarBiz -
Defining the right
franchise business
October 29,
2003, Kuala Lumpur - StarBiz -
Avoiding 10 deadly
investor sins
October 22, 2003, Kuala
Lumpur - StarBiz -
Seeking the right
franchise
Sept. 24, 2003,
Kuala Lumpur - StarBiz
- FranNet opens office in KL
Big
potential in local franchising, says consultant
Kuala Lumpur,
June 2, 2004, StarBiz
FRANCHISE
consultant FranNet Asia Pacific (FAP) sees the
huge growth potential in the local franchise
industry, said president Lim Soo Kong.
"The prospects for the franchise industry look
pretty bright. Currently, only about 10% of the
businesses in the country consist of franchises.
Franchising in Malaysia is in its growth stage -
there is still a lot to learn and evolve," she
said via teleconference from San Diego, United
States.
According to the Malaysian Franchise Association
(MFA), the industry turnover grew 24% to RM
10.7bil year-on-year in 2002. As at September
2003, the number of franchise outlets stood at
3,782 outlets.
MFA expects 2004 to be a good year for franchising
with a 20% growth in turnover and a 10% to 15%
increase in franchise outlets.
However, Lim said there was a definite lack of
awareness of franchising, resulting in people
jumping onto the bandwagon without conducting
sufficient research.
Many also do not take the time to fully understand
the market trends and their investment goals when
entering the franchise business and this could be
detrimental.
"They are not aware that there is a wide range of
sectors aside from the food industry. Interested
franchisees can also consider opportunities in
education, training products, car servicing and
adult training." Lim said.
According to Lim, the three most popular franchise
operations in the Asia-Pacific will be the
service-related business like residential
cleaning, new and innovative businesses that
provide niche solutions for certain market
segments, and the food retail service.
She said, however, that it would take a lot of
hard work for a franchise business to be
successful.
"A franchisee would also need to understand what
he is getting into besides being completely
dedicated to following the system and having a
good relationship with the franchisor," she said.
On local franchisors expanding overseas, Lim feels
that more needs to be done to strengthen the
system and support the local franchises before
expanding overseas.
FAP, through its local subsidiary FranNet Sdn Bhd
(FSB). Will be organizing its inaugural one-day
franchise workshop on June 19 in Petaling Jaya.
"The workshop aims to guide budding entrepreneurs
to choose the right franchise business. Topics
covered will range from practical steps to set up
business, as well as financial and legal matters,"
Lim said.
Participants will also get to meet master
franchisors as well as others of the same mindset
and exchange news and developments about the
industry.
FSB was established in October 2003 to provide
practical support to local companies and
individuals interested to explore franchise
business opportunities from the United States and
Asia-Pacific.
The company currently has a portfolio of 25 to 30
franchisors from countries like the US, Australia
and Singapore.
Both FAP and FSB are part of the FranNet group,
the largest franchise-consulting group in the
United States.
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What a franchisor should bring to the table
Kuala Lumpur, Nov.
12, 2003, StarBiz
by Lim Soo Kong
If you're thinking of buying a franchise, it's
important that you understand what you should
expect from your franchise. It's important that
your expectations be reasonable. It's just as
important that you not settle for less than you
should.
- A franchise should expect a franchisor to
have a successful system that can be easily
transferred. If the system isn't successful or
proven, why should you as a franchisee pay for
it?
- You should expect the franchisor to spend
the time to answer your research questions
before you buy. There are certain legal
restrictions like those concerning earnings
representations that may prevent a franchisor
from answering some questions. But, other than
those prohibited by law, all questions should be
answered.
- You should expect that your franchisor is
someone you feel you will be compatible with.
You should like your franchisor and feel that
his franchise's vision of the future conforms
to your own.
- You should make sure your franchisor and
your franchise agreements are fair. The nature
of a franchise agreement is usually at least
somewhat slanted towards the franchisor. The
owners of the franchise company have taken a
risk and developed a business that you are
asking them to teach you. In return, they will
want to be protected and to control certain
parts of the system.
- You should expect your franchisor to help
you find a location that is suitable to your
needs. Legally, many franchisors are afraid to
"insist" you take a location that they have
found.
Conversely, many are loath to let you pick
a site on your own. The best solution is to have
a franchisor that works very actively with you to
find a location and gives you several choices to
pick from. Find a site that both you and the
franchisor like. Make sure you don't try to
become a demographics expert overnight. It
happens to all of us. We sign the franchise
agreement, and all of a sudden we are magically
endowed with great wisdom and insight. Resist
this temptation. I have seen franchisees insist
they could recognize a good site better than a
franchisor with hundreds of locations and over 25
years of experience.
- You should expect your franchisor to provide
you with quality training. Talk to some of the
newer franchisees and see if the training they
received was complete enough to them
successfully into business with the fewest
possible problems and glitches.
Check to see if the franchisor has a real
commitment to current and future training, too.
Find out what happens if you need additional
training later on, either for yourself or for your
employees. Will you have to pay for it? The
franchisor should, within reason, make training
available to you, either at no charge or at a
reasonable rate.
- You should expect, your franchisor to think
of you as an associate, a "partner", and as a
customer. This is a hard balance to strike, but
you want your franchisor to be
franchisee-friendly. You can often find out
much more about how a franchisor behaves by
talking to other franchisees than you can by
simply reading the franchise offering circular.
- You should expect your franchisor to be
future oriented. It's not enough to have a
system that works well today and has succeeded
up until now.
Businesses, like the world around them,
constantly change. Your franchisor must have a
good, clear vision of the future, and you must
agree that the vision is the right one before you
buy.
- Look for a franchisor that has, a solid
record of keeping its franchisees in business
successfully. Some franchisors will move heaven
and earth to help you succeed in business.
- You should expect your franchisor to have
the human and financial resources to provide the
support needed to give you the best chance of
being successful.
Too often franchisors, like other growing
companies, are short of money, people or both.
While a younger company will obviously not have
the resources of a major corporate behemoth, you
must still make sure that your franchisor,
regardless of size, has the resources needed to do
the job for you properly.
- Expect your franchisor to use technology and
communications to keep you ahead of the
competition. Don't underestimate the importance
of this. If a franchisor is slow to embrace new
technology, you could suffer.
There are a lot of things you should expect
from a franchisor. This list does not cover all.
Think of a franchise as a box of tools. You will
want to have the very best tools for the job you
want to do, but you will still have to be the one
that uses the tools successfully. The more and
better the tools, the greater the chances that you
will be successful in your job of building a
successful business.
So, expect the franchisor to provide you with
great tools for the job you're considering. Just
remember that tools alone will not get the job
done.
- Lim Soo Kong is the president, Asia Pacific
of FranNet - the Franchise Connection. email
slim@frannet.com
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Defining the right franchise business
Kuala Lumpur, Nov. 5,
2003, StarBiz
by Lim Soo Kong
In all our lives, there are defining
moments. There is the moment when we decide that
we're ready to get married, to accept our fist
real job, and the moment we decide that we want to
work for ourselves and own a business. Without a
doubt, the decisions that we make at these
critical junctures in our lives can, to a large
degree, determine the quality of life we have in
the future. These decisions are the ones that
will not only shape our lifestyle, but also the
fabric of our lives.
One of the greatest challenges each of us face
is to make sure that when we have the opportunity
to make a decision "of a defining moment", that it
is one which we will be happy with for the rest of
our lives. We all remember the "I told you so"
days when someone would, after the fact, second
guess your decision and point out how foolish you
had been. Of course, hindsight is 20-20.
Here's some good news. When you make the
decision to investigate a franchise business you
have the opportunity to turn hindsight into
foresight. If you do your investigation properly,
you can give yourself a better chance of making a
great decision in terms of the business that you
choose for yourself. How, you may ask? The
answer is relatively simple. When you make the
decision to go into business for yourself, you
want your decision to be a good one not just for
the short term, but also for the long term.
You need to have a plan that will allow you to
achieve each of these three steps. So, you should
start on the road to making a good decision for
yourself by recognizing a couple of things that
could badly mislead you, if ignored. A business
that you may like economically may actually be
totally unsuited to help you achieve your real
goals. A business that on the surface might not
seem appealing to you may turn out to be the ideal
business to help you achieve your long term goals.
The first question I ask my clients in this:
"If I am successful in the business that I select,
what do I want my life to be like?" Once you are
able to answer that question, you can
"reverse-engineer the process", and go backwards
from your destination. Too often, people don't
know where they want to wind up, so they don't
select the best vehicle to get them to where they
want to go. Sure, it all sounds good, but what
does it really mean? Let me start by having you
ask yourself this question: "How would you like to
own a dry cleaner?" Most people would probably
say that they think it wouldn't be enough fun, or
that it's too hot, or that it could be boring, or
something like that. Then I ask them two more
questions:
- Would they like a business that can
eventually operate at a distance, or in
absentia?
- Would they like to either own more than one
unit of the business that they choose, or would
they at least like to have the option to own
more than one unit?
Almost without exception, I am told that
multiple-unit ownership should be either an option
or a certainty, and that someday they would like
to back away from their business and have more
freedom and independence. I then ask then whether
the structure of a dry cleaner is a good one to
help them achieve their goal. I ask whether the
simplicity of the operation, which allows an owner
to hire and train employee to do the job is an
absolute necessity if they want to be able to back
away someday? I also ask them how they expect to
have more than one location, if the business is so
difficult that only they can do it?
When I do this, their lights come on! All of
a sudden, these people realize that while they
might not like to take in dry-cleaning, or for
that matter make French fries; they might very
much like to own a 1-Hour Martinizing, or a
McDonalds! As soon as they separate the business
they work in, from the business they work on,
their strategy changes. They look at business as
something they are going to manage and grow, and
realize that the product that they choose may not
be as important as the opportunity that the
business can offer.
With all the choices that exist in franchising
today, you will have many possibilities to choose
from. However, no matter what you choose, I'd be
willing to bet you that three years into your
business, what will matter most to you is not what
your business is called, but rather whether that
business gives you the things you most want to
have in your life. If you don't have the
security, freedom, independence, success,
recognition, accomplishment, time for family,
growth, or whatever else you personally want to
have as part of your life, you will not like the
business you have chosen. So, how can you make
this happen for yourself? The one that gets you
to your goal quickest, fastest, easiest, and
best. You may be very surprised at which one that
turns out to be!
- Lim Soo Kong is the president, Asia Pacific
of FranNet - the Franchise Connection. email
slim@frannet.com
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Avoiding 10 deadly investor sins
Kuala Lumpur, Oct.
29, 2003, StarBiz
by Lim Soo Kong
"What do you have in the fast food
business?" Many prospective franchise investors
come to me with that common question. While it
may be an appropriate question to ask, it may also
lead an investor down the road to failure, and
even perhaps economic ruin. It's not that the
fast food segment doesn't include many good
franchise opportunities. It does! But like all
businesses, the franchise itself doesn't only need
to be good at what it does; it also needs to fit
the skills and personality of the prospective
franchisee.
Often times, clients know what they want in a
business. They'll say the ideal business has few
employees, keeps business hours, i.e. 9 to 5, has
limited competition, it's a low investment, has
low potential for theft, and offers significant
growth. That certainly doesn't sound like many of
the food businesses I have explored, and as soon
as I ask them, my clients say it doesn't sound
like any of the food businesses they know, either.
It's only then that they begin to see how far
off the mark they were when they said they were
thinking of buying a food franchise opportunity.
Why do so many people ask for a food business?
Typically, it's not because they are madly in love
with the concept of running a restaurant, but it
is because of what restaurants represent to them.
Restaurants are everywhere, and we all eat
every day. Most people enjoy eating at
restaurants, and there are numerous successful
chains and franchises in every city. So
restaurants appear to be fun, feel safe, and look
stable and successful. You only have to look
around in your community to see examples of
franchised food businesses that are great
successes. McDonald's, Burger King, Wendy's,
Pizza Hut - to name a few - have become giant
franchise opportunities. However, I always ask
clients if they're only interested in a food
business, or in any business that is stable,
strong, experienced and offers a good return on
investment? In almost all cases, the answer is
"Yes." And that's when the client's focus
broadens and a model of the type of business
opportunity they actually want begins to emerge.
My point is simple: Prospective
franchises often let their perceptions guide them,
rather than their logic, and in so doing, they set
themselves up for the likelihood of failure. Many
of these investors commit one or more of the 10
deadly sins that are common among franchise
investors. What are the 10 deadly sins? Here's
the list:
- Failure to create a model of who the
investor is as a person, and failure to create a
list of their personal business strengths and
skills.
- Failure to identify the types of businesses
that will match the lifestyle they need.
- Failure to de-identify the name of the
business from the performance of that business,
and how the business will help them achieve
their goals and strategies.
- Failure to investigate and compare several
businesses to see which one best matches their
needs and interests.
- Failure to develop a three tiered strategy
for investing, including the entry strategy, a
long-term strategy, and an exit strategy.
- Failure to realize that franchisors are all
different. Some franchisors are smart, some
stupid, some young, some old, some with rigid
systems and others flexible. It's important to
find one that offers what the investor needs.
- Failure to realize that they do not have to
spend a lot of money to get a good business.
There's virtually no automatic correlation
between how much a business will cost to start
out and how well it will do once started.
- Failure to do sufficient research to not
only find out whether a business and an industry
is solid, but also whether it is good for their
strategies and skills.
- Failure to find both the successful and
unsuccessful franchises within the system and
compare themselves with these franchises. Are
they like people doing well, or do they have the
same skill set and attitude as the people doing
poorly?
- Failure to use experts, like franchise
attorneys, accountants, advisors, etc.
Granted there are many variables. You can
do everything right and still fail. But by not
allowing yourself to commit these 10 deadly sins,
you can greatly enhance your chances for success.
To avoid the deadly sins, I suggest you ask
yourself the following questions:
- Do I like the idea of being part of a
franchise system?
- Do I want to invest during the early stages
of a franchisor's development when the
opportunity to grow is wide open? Or do I want
to get involved only after most of the growth is
finished so the risk is greatly diminished?
- Is the franchise I'm looking for a leader in
its industry? Is the industry stable and
growing?
- Does the management team have a vision not
just for today, but for the future?
- Can I afford the business? Can I afford
this business emotionally? Can I handle the
stress of starting a new enterprise? Will I
have the support from my family? (It's a good
idea to involve family members in your
research).
- Does the business fit my personal strategy
for growth and success?
- Do I fit with the skills, abilities,
corporate personality, etc. of this business,
and with the successful franchises who are now
part of the system?
Simply put, many people do not take the
time to really understand what they're trying to
achieve when they invest in a business, and
consequently, they never find what they're after.
Don't let it happen to you.
Franchising offers many outstanding
opportunities. You can probably find one that's
right for you if you avoid the 10 deadly sins.
- Lim Soo Kong is the president, Asia Pacific
of FranNet - the Franchise Connection. email
slim@frannet.com
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Seeking the right franchise
Kuala Lumpur, Oct.
22, 2003, StarBiz
by Lim Soo Kong
So you have finally made up your mind.
You're going to buy your own franchise business!
No more corporate politics for you. You never
want to hear the words downsizing, merged,
acquired or transferred again! You're finally
going to tell them what they can do with that
latest company memo! You're going to have the
last laugh...and then REALITY STRIKES!!!
Your mind ask itself, which franchise? How
much will it cost? Where should I do it? Is the
timing right? What are my choices? You can feel
the hairs beginning to stand on the back of your
neck. Sweat starts to develop on your forehead,
while a chill goes up and down your spine. As
quickly as it formed, your granite-like resolve
starts to dissolve, and you find yourself saying,
"Hmmm...maybe my boss isn't that big jerk after
all." Your pulse races as your mind goes back and
forth between the reality of the uncertain
corporate life, and your lack of knowledge in
owning your own franchise business.
RELAX. The cure is at hand. Not knowing what
franchise business you should own is perfectly
normal. So, give yourself permission to explore
these new opportunities, but keep in mind what
your goals are. To succeed, it is very important
for you to take stock of both the franchise you
are thinking of buying AND of yourself. Avoid the
myth that a franchise business is the formula for
successful business ownership. I'm often asked,
"What is the best franchise to buy?" Many of the
inquirers are very surprised when I tell them that
I have no idea! The answer will depend a lot on
what you are looking for, what you like, and what
your personal preferences are. Figure out who you
are! Be honest. Be brutal. But, be fair. For
example, if you are not willing to work 7 days a
week, do not consider buying a franchise business
where you would need to work those 7 days.
It sounds simple and obvious, but people often
overlook these issues. As you build your model,
also ask yourself, what are you good at?
Selling? Managing? Communicating? Organizing?
You may be surprised at the high number of
franchise businesses that match your skills.
When you realize that there is no correlation
between the amount you invest in the franchise
business and the quality and earnings potential of
the business, you will also realize that personal
fit between you and the franchise business is an
absolute must, and that investment cost will more
often than not be an obstacle to reaching your
goals. Keep working to create a complete model of
who you are, and what is important to you. Ask
yourself whether you like a lot of employees, or
just a few; whether you are patient with others or
a perfectionist and a lone wolf. Think about how
much growth you want, and whether the image of the
business matters. Ask yourself how much money you
want to make, how much free time you want and
where the balance is between money earned and free
time needed.
Decide whether you want to stand behind a
counter, go out of your location to find and
market to your customers, and how much growth you
want from your business. Once you know what a
business should look like for you there is a much
better chance you can find it. You may not like
the idea of doing a lot of the manual, hands-on
work in starting a business, but you must be able
to do it until you can afford to hire employees to
take over for you. Make sure you are honest about
this, because it can be the difference between
success and failure.
Second, plan your long-term strategy. In many
ways, this is your most important strategy because
it helps you focus on your hopes, dreams and
long-term goals. What do you want your franchise
business to be like after five years? Will it be
large? Will you still be active in the managing
on a day-to-day basis? How much money would you
want to and need to make from it, and will it give
you the amount of personal freedom and
independence that you ideally want. Make sure that
the business you buy can really accommodate your
goals. This second phase of the strategy is
really key for you. Many people are fooled by the
things they have to do in phase one. They confuse
the tasks they may need to do when they enter a
franchise business with the real franchise
business they are hoping to create.
During the initial stages of your business you
may end up doing work that you don't want to do
long term. Plan for that, and keep your eye on
your long-term goals. Be aware that the road to
success is long, and that unless you are willing
to roll up your sleeves when necessary, you may
never get down the road far enough to really enjoy
success. By modeling yourself carefully and by
comparing the model that you have created with the
franchise business that you are looking at, you
can dramatically improve your odds of succeeding.
By considering only those franchise businesses
that are not only good at what they do, but work
well with your skills sets, you are taking giant
steps towards financial and personal independence.
- Lim Soo Kong is the president, Asia Pacific
of FranNet - the Franchise Connection. email
slim@frannet.com
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FranNet opens office in KL
Kuala Lumpur, Sept. 24, 2003, StarBiz
THE world's largest franchising consultant
network FranNet has opened its first Asia-Pacific
office in Kuala Lumpur, further expanding its
international presence.
Headquartered in San Diego, California,
FranNet has more than 60 locations in the United
States, as well as offices in Mexico and Canada.
The Kuala Lumpur office, to spearhead FranNet's
entry into Malaysia, Singapore and the rest of the
Asia-Pacific, was headed by Lim Soo Kong, the
company said in a statement. Lim is the former
chief executive officer of Euro RSCG Malaysia, a
global communications company headquartered in New
York. She was also a group director at
McCann-Erickson for 11 years. "Malaysia and
Singapore have an increasing middle class with an
inclination towards fashionable lifestyle and
branded products," Lim said. "There is definitely
a lack of awareness that franchising is not just
about food," she added.
The consultancy will be launched during the
Franchising International Malaysia 2003 Exhibition
to be held in Kuala Lumpur on Sept. 26-28, where
Lim will present a paper on Franchising - Turning
Your Entrepreneurial Dream Into Reality.
Representing only franchisors that have been
thoroughly vetted and researched, FranNet will
match aspiring entrepreneurs with franchisors in
such sectors as education and training products,
child development, adult training, senior care and
car serving and maintenance.
Lim said there was a rising group of people in
Malaysia and Singapore who were looking for
opportunity to work on their own terms, having
tired of the corporate rat race. "FranNet has
precisely the kind of services that would serve
their needs," she said.
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|
Soo
Kong Lim, 
LiLian
Lim,