Revenue from Asia's franchise market set to rise by $75b a year!

Sep 22, 2007

PastaMania, Secret Recipe, KinderGolf win franchise awards. Revenue from Asia's franchise market is estimated to be rising by $75b a year !

REGIONAL cafe chain Secret Recipe makes franchising a piece of cake.
The 180-outlet chain yesterday clinched a top award from the Franchising & Licensing Association (FLA) Singapore.

Despite charging one of the highest upfront franchising fees in Malaysia, its home base, Secret Recipe is flooded with 10 or more franchising requests each day.

'We charge fees of RM120,000 for the first five years of operating the franchise outlet,' said Secret Recipe chief executive Steven Sim. The amount is equivalent to S$52,428.
'Though we don't advertise, we still get so many requests that we can't cope,' he said at a press conference before receiving the International Franchisor of the Year Award from FLA. This annual award honours franchisors that have excelled in their own countries. Secret Recipe beat seven other nominees from China, India, Indonesia, the United States and other markets.
Two other companies - PastaMania and KinderGolf - also received awards at the FLA Gala Dinner last night at the Pan Pacific Hotel.

Mr S. Iswaran, Minister of State for Trade and Industry, who was the guest of honour at the event, noted that revenue from Asia's franchise markets is estimated to be growing by over US$50 billion (S$75.2 billion) each year. This is expected to hit US$100 billion in five years.
Secret Recipe is one of the success stories to have tapped into this growth. Its franchising revenue, which makes up more than half of its total sales, is expected to exceed RM60 million this year.

The secret to the group's success? It helps its franchisees maintain a strong brand and consistent food quality by supplying them with cakes and raw materials churned out at its Petaling Jaya factory.

The formula has apparently worked. The company has a total of 180 self-owned and franchised outlets and aims to grow to 300 outlets in five years.

Mr Iswaran also noted that 'Singapore is an integral part' of the Asian franchising growth story. 'The number of franchise companies in Singapore has quadrupled over the past 10 years to more than 380 in 2004, and it continues to grow at a steady rate.'

PastaMania, Singapore's largest Italian restaurant chain, won the 2007 Franchisor of the Year Award. It is an example of a home-grown chain that has made good. PastaMania has 30 outlets in six countries, including Kuwait, Indonesia and India.

'We have aggressive plans to have over 100 outlets worldwide within the next five years,' said Mr Rashid Hassan, PastaMania's chief executive officer (CEO).
KinderGolf, which teaches golf to kids four to 12 years old, won the Promising Franchisor of the Year Award.

The company, which plans to grow from 12 outlets currently to 118 outlets worldwide within the next three years, was honoured for its interesting business ideas.

Source: The Straits Times