Franchise income takes a beating during MCO – Nanta


THE franchise income has suffered a significant decline during the Movement Control Order (CPP) period due to the COVID-19 pandemic, particularly in the food and beverage sub-sector, which dropped by up to 70 per cent; and education, which shrank by up to 80 per cent.

Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi (picture; centre) said on the other hand, online selling activity recorded a remarkable jump of 28.9 per cent in April 2020 as it became an alternative purchasing channel for consumers whose movement was restricted during the MCO.

He said the value of the franchise industry’s sales this year may not be as successful as the previous years due to the effects of COVID-19.

According to the Franchise Business Annual Report 2018, the franchise industry recorded sales of more than RM11 billion and the figure was expected to increase to RM13 billion in 2019.

“The franchise industry is one of the most important industries with a significant contribution to the country’s economy,” he said, adding that to date 583 local and 63 foreign franchisors have registered with the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP).

Nanta said this to the media after witnessing the signing of a memorandum of understanding between the Malaysian Franchise Association (MFA) and online shopping platform Shopee, here today.

The MFA and Shopee’s collaboration will benefit 509 franchise players, enabling them to open official stores, as well as promote purchase vouchers or products online.

Nanta hopes the cooperation between the MFA and Shopee will help in the recovery of the country’s economy, as the COVID-19 pandemic has changed consumer trends from buying products in physical stores to online platforms.