FRANCHISE AND ITS HISTORICAL DEVELOPMENT IN MALAYSIA

Salam 1Malaysia

Frachising is a fast and effective way of expanding business. There are other methods of expanding a business besides franchising such as chain distribution, licensing, agencies and also appointing distributors. Today franchising has established itself as a well-organised industry and promises bright opportunities to individuals who really recognise its potential.

HOW DID IT BEGIN?

The word franchise originates from a French word which means special privilege or independence. During the middle ages, franchise was considered a privilege or right given by the ruler (palace) or royalties to certain individuals to carry out certain services or to hunt on their land.

In Malaysia it began as early as 1946 when Singer, which was known at that time as Singer Sewing Machine Co tried to expand its business. However this system did not expand until early 1960 when A & W became the first United States fast food restaurant to open its branch in Kuala Lumpur. Since then the demand for light food from the local public became more open and this is clearly evident with the arrival of KFC, Mc Donald’s, Pizza Hut and Shakey’s.

The Malaysian Government has also identified franchising as one of the fastest method of producing entrepreneurs as well as increasing the number of franchise entrepreneurs. As such in 1992, the government introduced the Franchise Development Program which was created through the Implementation Coordination Unit, Prime Minister’s Department. It has since then managed to spur the franchise industry in Malaysia, particularly in the development of entrepreneurs and also local franchise products.