SINGAPORE - Franchises have to leverage technology to stay ahead, Mr Baey Yam Keng, Senior Parliamentary Secretary for Transport and Culture, Community and Youth, said on Thursday (Oct 18).
He was speaking at the opening ceremony of the three-day Franchising & Licensing Asia (FLAsia) exhibition at Marina Bay Sands Expo and Convention Centre.
Now into its 13th year , the exhibition aims to bring together the franchising and licensing community and provide opportunities for businesses.
The exhibition is organised by BizLink Exhibition Services, a subsidiary of Singapore Press Holdings. This year, it features more than 200 brands from 17 countries and regions in the Asia-Pacific, North America, Europe and the United Kingdom.
In his opening address, Mr Baey said: "Franchising is used worldwide as a business strategy to expand locally and overseas. In Singapore, franchising is a productive mode of expansion for both the retail and food services sectors, providing quick access to the market and helps improve company productivity."
About 8 per cent of the total workforce in Singapore are in the retail and food services sectors. The two sectors combined chalked up $44 billion in operating receipts in 2016, contributing to 2.2 per cent of Singapore's gross domestic product (GDP).
Mr Baey said that Singapore franchises needed to continually adapt and change to stay relevant, especially by leveraging new technologies.
"Businesses need to embrace change, and stay one step, many steps, ahead of the competition," he said.
"In the franchise industry, leveraging technology such as franchise management, development, operations, training, social media, mobile pay, online delivery apps, marketing, and Web-based point of sale (POS) systems are vital components to success."
For example, the convenience store franchise, 7-Eleven, has rolled out a loyalty app that allows regular customers to redeem free gifts or buy products at a discount. The franchise has also installed unified payment terminals, accepting a wide range of cashless options, across more than 380 stores islandwide.
Businesses that are not currently under a franchise can also consider going down that route.
Going into franchising and licensing can help companies to leverage the franchisor's brand identity, Mr Baey said. They can also use the proven business model, training and ongoing support.
"Good franchisors also aid with marketing outreach and share their know-how on finding suitable locations," he said.
Mr Baey noted that franchising is also important to foreign businesses that want to gain a foothold in the local market.
"Foreign brands can make use of Singapore's strong economy and spending power to attract local investors to be franchisees and expand at a faster pace," he said.
Mr Robert Leong, president of the Franchising and Licensing Association (Singapore), said: "(The association) looks forward to a bigger and better connected franchising and licensing community that will contribute... to Singapore's GDP positively."