Mr Dhirendra Shantilah, Chairman, Franchising and Licensing Association, Singapore
Distinguished Guests
Ladies and Gentlemen

Good evening

I am pleased to join you this evening to mark the 10^th anniversary of the Franchising and Licensing Association of Singapore. Until July this year, the association was known as the Singapore International Franchise Association (SIFA), Singapore's main franchise body.

The Association has been working closely in the past decade with government agencies, such as SPRING and IE Singapore, and international bodies to nurture and develop the franchise industry in Singapore. The Singapore government has strongly supported the franchise industry. Franchising is a growth strategy for small businesses. It enables them to expand faster with lower capital outlay and lower risks. As franchisors, these promising enterprises also gain economies of scale, higher productivity, more locations and sales and enhanced business image.

For the small businesses that join a franchise, they, too, enjoy many advantages - instant visibility in the market, better brand recognition, pooling of advertising and marketing resources and expertise to help them improve their business operations and systems. They can quickly gain access to a proven business model and still enjoy the flexibility and freedom of being their own boss. So rather then re-inventing the wheel, they can ride on the success of the franchisor.

I am happy to note that franchising in Singapore has made good progress. Initiatives aimed at building up the franchising capabilities of local enterprises and attracting world-class franchises to Singapore have been progressively introduced over the years. There are now more than 350 franchises and more than 2,600 franchisees in Singapore.

In addition to foreign franchises like McDonalds and Kentucky Fried Chicken, which established themselves in Singapore over two decades ago, other foreign and local franchises have come on the scene in the last decade and added vibrancy to the local business landscape. Coffee Bean & Tea Leaf, Starbucks and The Body Shop are already household names. 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. For example, Prima Deli, Bee Cheng Hiang, Old Chang Kee, Informatics and Popular have expanded beyond Singapore. Their successes have inspired others. It is encouraging to see new homegrown franchises alongside the more established ones. They include names like Sakae Sushi, V-Kool, HomeMaker and Osim. All these enterprises have proven one point -- that franchising can be a viable business option, if run well. Now, let me elaborate.

Sakae Sushi is the pioneer food and beverage brand of Apex Pal International Limited. The company opened its first outlet in December 1997. In just six years, 17 outlets have sprung up all over Singapore. A well-implemented franchise concept, coupled with the ability to constantly innovate and provide a wide variety of quality sushi for consumers, was what made Sakae Sushi so successful. So successful, in fact, that it won Mr Douglas Foo the Entrepreneur of the Year Award in 2002, and the company is now listed on the Singapore Stock Exchange.

Nanyang Optical is another success story. It is one of Singapore's largest optical retail chains, with more than 20 outlets in Singapore, Malaysia, Indonesia and China. As a franchisor, Nanyang continues to look for ways to provide value added services to its franchisees. For example, the company developed the SpecPlus! System, tailored to meet the operational needs of its franchisees. It is also in a joint venture in China to design and produce its own brands of high quality spectacles for its franchisees, to achieve greater economies of scale and better differentiation from competitors.

With the proven success of franchising, more small businesses in Singapore can consider adopting this growth strategy. To ensure that their franchise concept is sustainable in the long run, they should design and develop their business model with the end in mind --- that is, aim for the regional and global market, not just the domestic market. Having the end in mind will ensure that the systems they put in place can be readily upscaled as their business expands.

However, like all investment decisions, there are business risks involved. Those interested in starting a franchise operation or joining one may want to seek professional advice and do their homework carefully.

Various forms of government assistance are available to companies interested in franchising. Besides business upgrading, franchising has proven to be an effective tool for companies to expand their operations and internationalise their brand names. Franchisors and potential franchisees can access IE Singapore's Business Information Services and the Singapore Franchise Directory for information on franchising. Opportunities to explore franchise collaborations are available through platforms such as the Global Franchising and Licensing Exhibition.

Companies can also tap government assistance through SPRING's Franchise Assistance Programmes (which are supported under the Local Enterprise Technical Assistance Scheme (LETAS)). Since the launch of these programmes, SPRING has provided support of $7.3 million to our SMEs.

In today’s knowledge-based and technology-driven economy, franchising alone is not sufficient to cater to the needs of businesses. Licensing of technology and brand name is fast becoming a common phenomenon for innovative businessmen seeking to increase their bottom line and creating stronger brand awareness.

I commend the Franchising and Licensing Association for taking the initiative to enlarge its scope and representation by including companies engaged in branding and technology licensing. SPRING will continue to support the association in its efforts to promote franchising, licensing and branding as a growth strategy for Singapore enterprises. Today, the FLA has more than 120 members, covering a wide variety of sectors.

I congratulate the FLA executive committee and its members for the excellent progress you have made. I wish you greater success in future. To our visitors from overseas, please take some time off to visit our small island state. Have a pleasant evening.

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