CARICOM REGIONAL SYMPOSIUM ON
SERVICES
‘Services – A Roadmap to the Future’
July 15 – 17, 2009
Antigua and Barbuda
FRANCHISING
SERVICES IN THE
CARICOM SINGLE
MARKET AND
ECONOMY
Presented by: G. L. Sydney Simmons
Presenter and sources
• >35 years exp. in practical service
development
• Business Development Advisor throughout
CARICOM, Europe and North America
• Consultant to Multi-lateral organisations,
Institutions, Governments, Enterprise and
Small Business
• “Services in CSME”, 2005
• Alex Konigsberg Q. C., internationally
recognised authority on Franchising
Franchising Services in CSME
• “The technique of distributing a product or
service through franchising can facilitate the
more rapid penetration of markets with a
service that can thrive competitively –
something people want to buy, or can be
persuaded to buy even if it is an unfamiliar
one”
Alex Konigsberg, Q. C.
International Franchising Expert
SERVICES AS % EXPORTS
Antigua
Montserrat
St. Lucia
Barbados
The Bahamas
Grenada
St. Kitts
St. Vincent
91.4%
91.0%
81.9%
79.6%
78.6%
72.1%
68.2%
66.9%
Jamaica 56.6%
Dominica 55.0%
Belize
44.8%
Haiti
37.6%
Guyana 21.1%
Suriname 18.6%
Trinidad 12.5%
Source: IMF and ECCB
Franchising Services in CSME
A FRANCHISE:
•
•
•
•
“The agreement or license between two legally independent parties
which gives:
a person or group of people (known as “the franchisee”) the right to
market a product or service using the trademarks or trade name of
another business
the franchisee the right to market a product or service using the
operating methods of the franchisor
the franchisee the obligation to pay the franchisor fees for these
rights
the franchisor the obligation to provide rights and support to
franchisees”
International Franchise Association
Franchising Services in CSME
oFranchising will foster competition in
CSME and encourages creativity,
specialisation and the opening of
new forms of distribution.
Franchising Services in CSME
o In more developed countries where service
businesses are especially important to the
economy, franchising has proved particularly
important to small business growth. We
believe that this can also develop the SME
sector within the CSME.
Franchising Services in CSME
Types of Franchises:
I. Product Distribution Franchises –
Under this type of franchise arrangement the franchisee simply
sells the franchisor’s products; there is basically a supplier
dealer/retailer relationship. The franchisor has permitted the
franchisee to use, under license, his logo and trademarks.
There is no management support or system for running the
business.
Franchising Services in CSME
Types of Franchises:
I. Business Format Franchises –
Under this type of franchise arrangement the franchisee not only
uses the franchisor’s product, logo and trademarks, but is also
provided with a complete system of conducting the business
itself. This system will include total management guidance, such
as marketing plans and full operational manuals.
This is the type best suited for the CARICOM situation.
Franchising Services in CSME
Franchising can serve as an engine for
job generation at a time when the
current economic upheaval is increasing
levels of unemployment, as well as
providing opportunities for foreign
investment at a most critical time.
Challenges to Franchising in CSME
• Lack of sufficient data on current franchising
in CARICOM
• Lack of general “franchisor culture” among
CARICOM business interests
• No established or harmonised regional
framework to address franchising
• No enabling/supporting institutional
environment currently in place
Developing a Regional Franchising Model:
o A high level transfer of knowledge of running
a successful business with global potential
o The development of the Region’s international
business capacity and image, through the
high visibility achievable by most world-class
franchises
Developing a Regional Franchising Model:
o The leveraging of a highly trainable, highly
educated and highly skilled force of
knowledge workers
o The building of capacity to enable regional
businesspersons to offer Caribbean
stakeholders a range of high-value services in
developing franchising systems
Developing a Regional Franchising Model:
o The eventual creation of a cadre of
franchisors and master franchisees with
capacity to establish franchises in Canada,
the USA, Europe, South Africa, Nigeria,
Botswana, Ghana and other selected target
markets
Developing a Regional Franchising Model:
oThe capacity to develop regional
brands and licenses to stimulate the
economies of Member States,
increase regional business offerings
and foster the growth of innovation.
Franchising Services in CSME
Direct benefits to development of the Services
Sector:
• the transfer of know-how proven in more
mature markets
• in-depth training programmes
• technical management assistance
• influencing of public sector development
project financing for franchise development.
Franchising Services in CSME
• Business Services Centers
• Overweight Packaging & Postage Service at
airports
• Large-scale Pharmacies
• Optometrists
• Professional Services
• Car Maintenance
• Convenience Stores
• Private Education
Franchising Services in CSME
“Franchising has long been touted as a
method of development for small
economies. Franchising brings to a local
economy a wealth of expertise and a
system of doing business that may not
be available otherwise.”
Franchising Services in CSME
• Trade Mark Matters
• Pilot Outlets
• Training Facilities
• Initial Franchise Fees
• Continuing Royalty Fees
Franchising Services in CSME
• Fees payable by Sub
Franchisees
• Unit Franchise Agreements
• Loss of Control
• Granting of Exclusive Rights
• Duties & Obligations of the
Franchisor
RECOMMENDATIONS
• The establishment of a single CSME
Franchising Registry/ Single Regional
Registration framework
• Single Regional Legal Framework addressing
franchising (consideration should be given to
UNIDROIT Model)
• Implementation of a Special Franchise
Development and Enabling Project.
• The establishment of a Regional franchising
body