Local franchises outshine foreign competitors: Expert<\/p>\n
JAKARTA (JP): Local franchises posted significant growth this
\nyear to outshine foreign franchises, a trend veteran consultant
\nAmir Karamoy predicted would continue into the new year.<\/p>\n
Amir said on Thursday the number of homegrown franchises, most
\nof them small and medium-size companies, had grown by 12.5
\npercent over the past four years. This compares to a some 10
\npercent drop in the number of foreign-based franchises.<\/p>\n
He said Indonesia currently has 43 homegrown franchises, a 19
\npercent increase from last year's 36.<\/p>\n
\"I project the same trend will continue into next year,\" he
\nadded.<\/p>\n
In comparison, the number of foreign franchises dropped from
\n73 last year to 69 in 1999. The crisis significantly affected
\nthese franchises ability to import raw materials as their
\npurchasing power dwindled.<\/p>\n
However, those foreign franchises which were able to adjust
\ntheir marketing and management in the face of the crisis were
\nable to maintain their market positions.<\/p>\n
Meanwhile, domestic franchises attracted local businesspeople
\nbecause the businesses offered low risk, required less capital
\nand relied mainly on locally procured raw materials.<\/p>\n
The interesting part of these growing trends, Amir said, was
\nthat non-restaurant franchises such as furniture stores,
\nlaundries, beauty salons, car rentals and training and
\nconsultation services have flourished.<\/p>\n
\"This fact discounts the opinion that only food related
\nproducts can succeed in the franchise business,\" Amir said.<\/p>\n
Such positive growth in local franchises has encouraged state
\npostal firm PT Pos Indonesia, state telecommunications company PT
\nTelkom and PT Astra Otoparts to venture into the franchising
\nbusiness themselves, maybe as early as June next year, Amir said.<\/p>\n
In addition, state oil and gas firm PT Pertamina is also
\nsounding out the possibility of establishing a franchise to sell
\nsome of its products.<\/p>\n
Amir said the prospect for franchises in the country was even
\nbrighter with early signs of economic improvement and the
\nincreasing purchasing power of Indonesians.<\/p>\n
He suggests the government help promote homegrown franchises
\nto help create jobs and boost the country's economic recovery.<\/p>\n
\"Franchises could be used as a means to boost the role of
\nIndonesians in the economy by encouraging entrepreneurship and
\nnurturing small and medium-size companies.<\/p>\n
\"The government should therefore help create favorable
\nconditions for homegrown franchises to grow.\"<\/p>\n
He urged the government to review Regulation No. 16\/1997 on
\nfranchises and Ministry of Industry and Trade Decree No.
\n259\/1997, which he said hampered the development of local
\nfranchises with complicated bureaucratic procedures.<\/p>\n
He also asked the government to provide financial support for
\nlocal franchisers and franchisees, such as forwarding low-
\ninterest rate working capital.<\/p>\n
\"Banks do not need to worry about providing loans for
\nfranchisees because unlike new companies, franchisees are 50
\npercent ready to start operation,\" he said, adding that
\nfranchisers could provide recommendations to banks and monitor
\nthe progress of their franchisees.<\/p>\n
\"That way, homegrown franchise could grow and help boost
\neconomic recovery,\" he said. (06)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/local-franchises-outshine-foreign-competitors-expert-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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