Care needed in choosing franchises

Care needed in choosing franchises

JAKARTA (JP): Indonesian entrepreneurs interested in opening
foreign franchise businesses must be very selective in choosing
franchisers, a marketing executive has said.

Indonesia Marketing Association's president, Hermawan
Kartajaya, said Saturday that those who were interested in
becoming franchisees must choose franchise brands carefully.

"Franchising is about selling a brand. Therefore, it has to be
one that is well known and saleable," Hermawan, who is also the
leading service officer for marketing consultant MarkPlus, told a
seminar on marketing Saturday.

Franchising has become a major trend in the country and would
continue to grow rapidly, he said.

However, many of the country's existing franchises are not
very well known locally or internationally.

Lower costs might be the reason for choosing a franchise
brand, he said.

But entrepreneurs must consider whether the costs of having
the franchise is worth the brands they are getting, he said.

"Less popular franchise businesses cannot compete with other
more popular ones, and operating them would just benefit the
franchisers," he said.

Prospective franchisees must also find out whether and how the
franchisers would customize their services or products to suit
the local market.

The franchising business has shown significant growth in the
past five years. Foreign franchises rose sharply to 118 in 1995,
from only six in 1991.

Most foreign franchisers are engaged in the sale of fast food
and fresh beverages.

The number of domestic franchisers has, thus far, reached only
32.

Saturday's seminar was held by the Ciputra Group. It adopted
the topic of strategies to become successful entrepreneurs. (das)