Sofia Leong Abdullah worked in many different industries as a personal assistant (PA) to the managing director (MD). She has also worked in the food chain, real estate and insurance sectors. But it was her role as PA to the MD of a master franchise company that would really have an impact on her career.
Spending 13 years in that company gave Sofia the chance to learn everything there’s to know about franchising. From her humble beginnings as a PA, she was eventually tasked with overseeing various development programmes within the company.
During her time in the company she also served as a committee member of the Malaysian Franchise Association (MFA) and rose her way to the top role as chief executive officer of MFA. After fulfilling her two years contract there, she decided to start up her own franchising consultancy.
Sofia talks to SAVVY about the ins and outs of franchising, why it’s a good route towards entrepreneurship and what it takes to be a successful franchisor and franchisee.
Besides on-the-job training, how else did you learn about franchising?
I learnt a lot from my boss who was very nurturing and encouraged me to upgrade my knowledge of franchising. He didn’t want me to just remain a PA forever and he gave me many opportunities. I travelled overseas to many franchise trade shows where I got to mingle with international franchisors. I wasn’t shy and always made a point to pick the brains of the most successful franchisors. After 13 years, I did learn a lot about franchising working in that company.
How different is franchising in Malaysia from other countries?
Generally, franchising is a globally-recognised business approach so there are many similarities in how franchising is conducted in various countries around the world. But of course different countries have their own specific laws that govern this activity. In Malaysia, for example, we have a franchise act that governs the industry.
All those who want to be involved in franchising — whether as a franchisee or franchisor — must register with the Registrar of Franchises (ROF). This act was initially set up to ensure that the franchisor doesn’t take advantage of any vulnerable or naive franchisee. But there are also quite a number of clauses that protect the franchisor as well. We have good legislation in place for the benefit of both franchisee and franchisor. The government has been quite proactive about this.
If a person is interested in franchising — either as a franchisee or franchisor — but doesn’t know where to begin, how should he/she go about it?
If that person owns a business and wishes to use the franchising model to expand that business, he/she can always consult with a franchise consultant. If that person is someone who wishes to buy a franchise, he/she can always refer to some of the trade associations which would have details of members who are franchisors. For example, the Malaysian Franchise Association or the Asean Retail Chain & Franchise Federation.
Why is franchising a good option for an entrepreneur?
Assuming you’re franchising from a company with a solid track record and a good reputation, the risk of failure is greatly reduced compared to starting something completely from scratch. Not only does the franchisor extend the use of their established brand name, they also supply you with best practices, training and support. You also don’t have to worry about ongoing research and development as these are taken care of by the franchisor.
What’s a crucial ingredient for being a successful franchisee?
A good franchisee must have good business sense and be a good “people” person because it’s essentially about being a good general manager. Remember, technical skills can easily be acquired by attending the franchisor’s training programme but business savvy can’t really be taught. Many people underestimate the importance of having good business sense.
It’s like being street smart. Even with the benefit of guidance from an established franchisor, the business will fail if the franchisee doesn’t shed the employee mentality and adopt an entrepreneurial mindset. Yes, franchising is less risky than starting a business completely from scratch but it’s still about running a business so you have to have that business sensibility within you.
What exactly do you do for your clients?
My core service is to help companies become successful franchisors. They need to have proper documentation and have good standard operating procedures in place. I basically help to ensure that these companies are able to comply with the requirements of the Malaysian Franchise Act. I also ensure they’re familiar with their obligations as a franchisor.
How do you charge for your services?
It depends on the documentation I need to assist in drafting — some businesses are more complex than others — and the condition of their current operational procedures. The fee for franchise development can vary from as low as RM35,000 to a high of RM85,000.
How do you keep up-to-date with the latest rules and regulations relating to franchising in this country?
I try to make myself available for most franchise activities within the country including expos, seminars, conferences or business networking opportunities. It’s at those places that I get to meet other people in the industry. We do a lot of sharing at these events. I also get updates from time to time from the Registrar of Franchises.
Is the government supportive of franchising?
Very much so as it recognises that franchising is a good way for people to get into business. Malaysia is one of the few countries in the world that has a government agency set up specifically to support the franchising industry. It provides financial support, subsidised training and organises overseas trade missions relating to franchising.
What’s the most common question you get asked about franchising?
“Which is the best brand to franchise in Malaysia?” Well, there are many good brands out there so it’s not fair to single out just one. I’d say look up the franchise award winners for this year, read up about them, and make up your own mind up based on what you see there.
Have you yourself franchised a business?
No, I haven’t. I’ve publicly stated on many occasions that my passion isn’t in managing my own franchise but in helping local brands to successfully extend their franchise across the country and even the region or the world. I get a lot of joy from seeing a brand make it globally because they consulted with me.