Mr Dhirendra Shantilah
Chairman, Singapore International Franchise Association

Distinguished Guests

Ladies and Gentlemen

I am pleased to be here this morning to officiate at the opening of Global Franchising 2002. This annual franchising conference and exhibition, now in its fourth year, has greatly enhanced Singapore’s position as a regional franchise hub. Today, more than 300 innovative foreign and local franchises operate in Singapore.

Indeed, franchising has made good progress. McDonalds, 7-Eleven, The Coffee Bean & Tea Leaf, Starbucks, The Body Shop and other foreign franchises have added vibrancy to the local business landscape. Their strong identity and high business efficiency have spurred many local enterprises to adopt franchising as a strategic business option and enabled them to tap global best practices.

Homegrown franchises have done well too. Household names like Prima Deli, Bee Cheng Hiang, Old Chang Kee, Informatics and Popular have expanded beyond Singapore. Their success has inspired others. It is encouraging to see newer homespun franchises alongside the more established ones. They include names like Sakae Sushi, Komala’s Restaurants, Cheers, BreadTalk, V-Kool, Prettyfit and Osim. All these enterprises have proven one point-- that franchising can be a viable business option, if run well. Franchising enables businesses to enjoy many advantages -- greater visibility in the market, better brand recognition, power of group marketing and a dedicated team to improve business operations.

Let me elaborate how some of our homegrown franchises have succeeded.

V-Kool is a premium coating for windows of buildings and vehicles. In 1997, V-Kool International Pte Ltd invested some $300,000 to develop a business format franchise to help it to leapfrog beyond Singapore. Today, there are more than 300 V-Kool franchise outlets in 25 countries in the Asia Pacific, USA, Central and South America, Europe and the Middle East. The company has enjoyed a six-fold return on investment.

Another example is Prettyfit, which designs and sells ladies’ footwear. In 1995, Prettyfit started with counters in departmental stores. Three years later, it set up its flagship store in Wisma Atria. To overcome growth constraint in Singapore, Prettyfit then ventured overseas with its first franchise outlet in Indonesia.

Today, there are more than 30 Prettyfit franchise outlets in Thailand, Taiwan, Australia, Japan, the United Arab Emirates and Pakistan. Its franchises now contribute half of its $10 million annual revenue. Like V-Kool, Prettyfit has shown that a good franchise concept can help to overcome the constraints of a small domestic market.

Turning to the food industry, we have the Komala’s Group as a good example. The Komala's Group has been serving traditional Indian vegetarian meals in Serangoon Road since 1947. In 1995, the Sekar brothers transformed their father’s business by creating the first Indian fast food, or "McThosai", in Little India. Komala’s International, the franchise vehicle, was launched in 2000 and a chain of franchises mushroomed -- in Kuala Lumpur, Colombo, Bangkok and Chenai. I understand that the Komala’s Group is now taking on Britain’s competitive Indian restaurant market and that the response has been good. Nearly 60 business contacts in London alone have expressed interest to join the franchise. Komala’s Group has shown that franchising can be an innovative way to stay ahead of the competition, even in traditional businesses.

These three examples show that homegrown franchises can succeed -- locally as well as globally. Small businesses in Singapore can consider joining franchises as a means to upgrade their business operations and efficiency. By joining a franchise, they do not have to take the trial-and-error route. Instead, they can gain access to a proven business model and still enjoy the flexibility and freedom of being their own boss.

Successful franchisors have it all worked out -- they have made the mistakes, tried the solutions, and fixed the bugs. So rather than re-inventing the wheel, businesses can ride on the success of the franchisors.

Good franchisors provide effective support in bulk purchasing, sales promotion, business management systems and training to franchisees. This can be a more effective way to compete, rather than continue with the traditional way of operations. However, like all investment decisions, there are business risks involved. Businessmen interested in joining a franchise may want to seek professional advice and do their homework carefully.

SPRING Singapore, together with Singapore International Franchise Association (SIFA) and International Enterprise Singapore (IE Singapore), have introduced initiatives to build up the franchising capabilities of local enterprises and attract world-class franchises to Singapore. The aim is to raise awareness of franchising as a viable business option and create an environment that is favourable for both franchisees and franchisors.

Various forms of assistance are available to companies interested in franchising. Franchisors and potential franchisees can access IE Singapore's Business Information Services and the Singapore Franchise Directory for useful information. They can also tap government assistance through schemes like SPRING Singapore's Local Enterprise Technical Assistance Scheme (LETAS).

Opportunities to explore franchise collaborations are also available through platforms such as today’s event. With over 140 participating companies from 18 countries and a turnout of more than 9,000 trade visitors, we can expect to see an active exchange of information and fostering of business partnerships.

SPRING Singapore launched the Franchise Assistance Programme under LETAS in March 2001 to encourage HDB shops to upgrade through franchising. To date, about half a million dollars have been provided to SMEs in the programme. To encourage more SMEs serving the domestic market to transform, I am pleased to announce that the programme will be extended to include SME franchisees in non-HDB centres. SPRING Singapore hopes to see some 300 SMEs take up the programme within the next two years.

Through various measures and incentives, the government has provided an environment for existing franchises to flourish and for new franchises to take root. I am very happy to note that the private sector has now taken upon itself to drive the growth of franchising. SIFA and its members have been vigorously promoting franchising, and they now join the Singapore Exhibition Services to co-organise this event for the first time.

I hope that through this event, all of you will gain much from the sharing and networking. This is an excellent platform for organisers, exhibitors and visitors alike. I wish you success. And to our overseas participants, I hope you will find your stay here enjoyable.

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