Local franchisers lack commitment

Local franchisers lack commitment

JAKARTA (JP): Many local franchise operators lack the
commitment and the ability to develop their businesses properly,
a consultant said yesterday

Amir Karamoy said many of the local franchisers took the fees
from the holders of their licenses but did not assist them in
developing their businesses.

"Many of the local franchisers are known to sell their
licenses to the franchisees and just leave them take care of the
business themselves," he said.

These franchisers do not see the importance of helping with
their franchisee's marketing or management strategies in order to
see them bloom.

They only pursue short-term profits from the franchise fee
instead of the longer-term benefits that can be accrued from
holding the royalty.

Most franchisers also lacked the human resources to assist
their franchisees, Amir said.

"As a franchiser, a company must be a consultant and an
auditor as well," he said at a media conference after the
launching of PT Sinar Eka Kreasi's new franchise package.

Sinar Eka Kreasi, operator of the dry cleaning and laundry
service Laundrette since 1985, launched the new franchise package
for those interested in opening another outlet in Greater
Jakarta.

Amir, a consultant for PT Sinar, said the company was offering
a package worth Rp 40 million (US$5,000) for small entrepreneurs
or housewives to use a room at their homes or offices.

The package includes Rp 13.75 million for the franchise fee,
Rp 4 million in a security deposit and the remaining amount for
equipment, marketing, training, insurance, outlet design and
location survey.

Potential franchisees will be required to pay 60 percent of
the amount when they sign the contract, which will be effective
for five years and two months.

They will have to pay another 30 percent when the room
renovation begins and the remaining 10 percent a week before the
outlet opens.

The franchisee must pay a royalty fee to PT Sinar worth 4
percent of their gross income.

Amir estimated the return investment for a Laundrette
franchisee at 40 percent. He said the franchisee could book about
Rp 16 million in net profit a year, with the assumption of 20
customers a day.

Laundrette currently owns two workshops which process the
dirty clothes dropped at its 104 outlets and counters in Jakarta.
(das)