Published: on 16 March 2012
This is expected to drive the average per capital income of industry players to more than RM2,990 a month, from RM470 last year.
KUALA LUMPUR: The government is targeting a 9.4 per cent contribution from the franchise industry to the country's gross domestic product (GDP) by 2020 from 2.2 per cent last year.
This is expected to drive the average per capital income of industry players to more than RM2,990 a month, from RM470 last year.
Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaacob said the target is based on the premise that the National Franchise Development Master Plan 2012-2016 will reach the height of its implementation in 2020.
He said the industry's contribution to the GDP is projected to increase to 4.3 per cent in 2016 and will continue to grow to 9.4 per cent in 2020, consistent with Malaysia's goal of becoming a high-income country.
Ismail Sabri said with the restructuring initiatives under the plan and its "Franchising for All" slogan, the youths, women, single mothers, the disabled, retirees, rural folks and the orang asli will be given opportunities to venture into franchise businesses.
According to the minister, the plan will review existing policies, strategies and development programmes as well as determine the direction of the franchise business in efforts to turn Malaysia into a franchise hub in Southeast Asia and Middle East by 2020.
The master plan is also expected to evaluate the industry's development based on key indicators such as the involvement of franchisors and franchisees as well as their contribution to the economy in terms of sales and employment, he said.
Ismail Sabri said incentives developed under the plan include the Overseas Expansion Loan Fund to finance cooperative involvement in franchise operations.
A total of RM10 million has been allocated under the fund for local franchisers seeking to expand overseas.
"We will look into the applications (for the fund) on a case-by-case basis," he said at the launch.
To date, the ministry has registered 597 franchise businesses, of which 34 per cent of them are in the food industry.
Ismail Sabri also said that local entrepreneurs had already set up franchises in 50 countries, with Indonesia and China being the main markets.
He said the ministry will provide RM5 million to RM10 million in the first phase for international franchises and RM8 million for small franchises locally.
Meanwhile, the government is considering amending the Franchise 1998 Act in the next session of Parliament in March.
Under the existing law, registration of franchises is not compulsory which makes it difficult for the ministry to monitor them, Ismail Sabri said.
At the launch yesterday, forty-five companies were awarded licences and franchise certificates.
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