Still, some ASEAN countries are just emerging from trade sanctions imposed by the US. Vietnam companies interested in franchising often lack the experience US franchises feel is necessary. Malaysia’s government is highly involved in franchise movement and can be slow to grant licenses or registration. These laws may prohibit certain kinds of franchises or limit the number of locations outside franchises can occupy. Many of the ASEAN countries have laws in place to protect local businesses and markets. The most problematic issues franchises face when trying to break into this market are political or legal problems. So scaling and menu agility are key success points to franchises hoping for success in this region. They are typically large and air conditioned and consumers can take their family and spend their time getting everything they need from one mall. US franchises look for companies or people in the region that already have an infrastructure in place to handle supply and human resources.Īgile brands that can adapt, especially to airports, malls and the like, are the brands that are succeeding in ASEAN countries. These business acts as the middle man in the region for the franchise. The business model currently is a sort of hand off of US franchises to companies in the region that are familiar with franchising. However, other countries, such as Singapore and Vietnam, are rapidly becoming gateways to the region for franchises, possibly due to English being spoken in these countries more and more. Many US franchises are marketing directly to ASEAN countries, but they are focused on the largest of these countries. People in ASEAN countries want good food with an American brand. Restaurant and food related franchises are key. Service based franchises may not be the answer yet. McDonald’s, Dunkin Donuts, Carl Jr’s, Baskin Robbins, Johnny Rockets and Starbucks are also enjoying success in ASEAN countries. They are the definition of successful franchising in ASEAN countries. They also have a thriving Pizza Hut chain. With almost 2000 locations spread over Indonesia, Malaysia and Thailand, Yum! Brands is a great example of franchise success in ASEAN countries. Yum! Brands KFC chain is that prime example. There is a diverse range of people in a large middle class in these countries with disposable income income they want to spend on brand names. Their economies are rapidly expanding and their demand for products many franchises offer has already surpassed India. Some 600 million people call ASEAN countries home. Now, more franchises are turning to countries such as Thailand, the Philippines, Indonesia, Cambodia, Singapore or other countries that are part of the Association of Southeast Asian Nations or ASEAN. Outside of English speaking countries, China and India were a go to market. In the past, US franchises have looked to English speaking nations, such as Canada and the UK, for growth potential. Southeast Asia’s international franchise market is growing rapidly.
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