SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT FRANCHISING & LICENSING ASIA 2009, on THURSDAY, 15 OCTOBER 2009, 9.40AMat SUNTEC INTERNATIONAL CONVENTION & EXHIBITION CENTRE LEVEL 4, HALL 401

Distinguished guests,

Ladies and gentlemen,

Welcome

Good morning. I am pleased to be here at the launch of Franchising & Licensing Asia 2009.

Franchising has significant economic impact

Franchising as a concept has been around since the 1850s. However, it was only in the latter half of the 20th century that franchising became a viable platform of growth for many businesses. Today, the franchising industry makes a significant global economic contribution. A study by the Education Foundation of the International Franchise Association showed that in 2005, US franchised establishments accounted for 4.4 percent of the total U.S. private-sector economy. The British Franchise Association has estimated the UK franchise industry to now be worth £11.4 billion. Here in Singapore, the number of franchise concepts has continued to grow from 380 in 2003 to about 500 today. This is a 30% increase over 5 years. Last year the franchise industry in Singapore generated some S$8 billion in revenue.

Singapore’s Franchise Scene

Indeed Singapore’s franchise industry has grown exponentially in the last two decades. The franchise scene in Singapore now includes industry players from sectors such as investment advisory, beauty and spa, pharmaceutical, education, and healthcare.

Franchising is now a preferred strategy for SMEs. This is because it is easily scalable with minimal investment and manpower costs. Larger companies can also tap on the networks of their established franchise partners to grow regionally and globally. Home-grown brands that have made their mark globally through franchising include BreadTalk, Apex Pal international, Charles & Keith, V-Kool and OSIM.

Singapore as a regional franchise hub in Asia

Singapore is also fast developing into a regional franchise hub. With our developed IP infrastructure, many foreign companies have already chosen Singapore as a base to house their franchise IP systems and rights. Half of the FLA’s members, for example, are internationally established brands such as Pepper Lunch, Subway, O’Briens, Marché, Time Zone and 7-Eleven. Their regional HQs are in Singapore and they carry out R&D here as well as conduct training for regional franchisees. Using Singapore as a base, they could potentially scale up their operations here and in the region.All this shows Singapore’s potential to house and grow global brands

Other master franchisees in Singapore have not only taken shares in the franchise brands but have even acquired 100% of these brands. Examples include Modern Montessori International and The Coffee Bean & Tea Leaf. This is testimony to the ability of our local companies to operate and manage global brands.

With funding from the government’s Local Enterprise and Association Development Programme or LEAD, the FLA will be able to offer local companies assistance in market development, industry development and manpower training. The International Franchise Association and the FLA will jointly launch the US-based Certified Franchising Executive or CFE programme in Singapore.With this premier certification programme in franchising, we can further professionalise Singapore’s franchising industry.Local businesses will be able to enroll for FLA courses and earn credits towards certification. Both franchisors and franchisees will now be updated on the latest trends, software, and even legal issues, thus maximising the benefits of franchising.

Closing

In closing, I would like commend the FLA for its efforts in helping to grow and lead the franchising and licensing fraternity in Singapore. To our local and overseas visitors and exhibitors, I wish all of you many fruitful franchising opportunities over the next three days.