Despite the current COVID-induced economic slump, Cambodia still represents an attractive market for several sectors, among them, United States franchises, which could start popping up in the Kingdom as early as 2022.
Robert Jones, a consultant for Edwards Global Services, who represented three US brands poised to bring their products to the Kingdom at a virtual expo hosted by the US embassy last week, said it’s likely that restaurants Chili’s and The Boiling Crab, as well as fitness chain Snap Fitness, will debut here as early as 2022.
Jones said Cambodia is an exciting franchising destination for several reasons. When franchises look at Southeast Asia, they primarily look to markets such as Thailand, Indonesia and the Philippines, which all have larger populations than Cambodia. The Kingdom though presents factors that are appealing to franchisors as part of an overall regional expansion strategy. These include its rising middle class, increases in disposable income and a young population with an entrepreneurial spirit.
The absence of a plethora of barriers to doing business in Cambodia and the Kingdom’s low withholding tax rates also contribute to its appeal as a franchise market, according to Jones.
Existing regional supply chains are also a boon for franchise expansion here because they aid market entry ease for franchises such as Chili’s, which already operates in eight Asian countries including Indonesia, Malaysia, the Philippines and China.
Jones said the fact that Cambodia being at an earlier stage of development than neighbours such as Thailand or Vietnam can be beneficial because the Kingdom is growing at a quicker rate.
He added that there are some concerns over intellectual property laws and the rule of law, as there are in many markets, but there are methods to mitigate risk and most franchise laws are covered by general commercial law.
Some of these methods of mitigating risk include having unbiased arbitrators based out-of-country to settle disputes as opposed to going through the courts of host countries.
In Cambodia, franchise agreements fall under the purview of the Ministry of Commerce and are covered by the law concerning Marks, Trade Names and Acts of Unfair Competition and the ministry’s Department of Intellectual Property.
If deals are reached with investors, Chili’s and the Boiling Crab will likely operate under “area franchising” agreements whereby a group of investors control all future franchises of a brand in a given area.
Snap Fitness centres may be open to sub-franchising in the future, if and when they make it to Cambodia and ultimately prove successful.
Chili’s is already a major international brand while The Boiling Crab is newer to the scene. It was founded by Vietnamese immigrants to the US in Louisiana, gained popularity among the Asian community in America and recently expanded to Shanghai, China.
Jones said it’s typical to change 10 to 15 percent of a restaurant’s menu to cater to local tastes when franchising in international markets.
https://www.khmertimeskh.com/50855068/wave-of-us-franchises-could-arrive-in-2022-consultant/