The Franchising and Licensing Association Singapore (FLA) has announced the launch of the Franchise Competence Framework which aims to make it easier for small and medium-sized enterprises (SMEs) to expand and run franchises overseas. The new programme will build a competency framework that will help SMEs develop and improve their franchising and licensing strategy, and assist them in bringing their brands beyond Singapore through activities such as FLA mission trips.

A company can use a diagnostic toolkit to assess whether its franchising initiatives are ready to progress. The company can then come up with an action plan to address any existing gaps based on the assessment results. Quality marks ranging from ‘starter’ to ‘world’ class will then be awarded to assess the company’s readiness. Together with a group of certified franchise consultants, the FLA will certify companies and recommend them for the appropriate quality mark.

The initiative is supported by the Local Enterprise and Association Development programme under Enterprise Singapore. Ted Tan, Deputy Chief Executive of Enterprise Singapore, said, “Franchising and licensing are effective ways for business expansion and internationalisation.”
“The key to a successful franchise or licensing business lies in the ability to differentiate its system of operations from competitors and to guard the intellectual property.” He added that this framework will be critical for accelerating companies’ market entry and overseas expansion.

Victor Tay, FLA Independent Board Advisor, stated, “SMEs find internationalising to foreign market resources intensive and it requires a lot of market research.”
“Many were daunted by the uphill tasks of competing beyond the comfort zone of Singapore market.” Tay noted that the process of moving overseas involves intense resources, market studies, recruitment of local managers and staff, and establishing facilities. The process is “tedious, financially draining and take a long lead time”, and many businesses found that their resources emptied out within the first two years, prompting them to “[retreat] back to Singapore”. “Franchising and licensing has a set of quality processes which is scalable and replicable. It lowers the cost of entries and provide a systematic platform for accessing an international market,” said Tay.

Source: The Star