The Rise Of The Franchise

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As Cambodia’s emerging middle class continues to grow, the appetite for international brands to splash the cash in continues to increase. This demand has led to a series of franchises popping up very quickly across the country, with many more in the pipeline.

Franchises typically are renowned for their international standards of quality and service and come together with strict operation regulations and training from the franchising organisation to ensure these standards are maintained.

In many cases, the franchiser will also provide support in areas such as sales, marketing, advertising and accounting. While the franchise market in Cambodia is still fairly immature compared to neighbouring countries, it is rapidly on the rise and continues to expand at an ever-increasing pace. And industry insiders claim it is ripe for further exploitation, especially in the food and hospitality arena.

The first food franchise to operate in central Phnom Penh was Thailand-based The Pizza Company, which was launched in 2005 by EFG (Express Foods Group). They went on to introduce Swensen’s, BBQ Chicken, Dairy Queen and, most recently, Costa Coffee.

Rami Sharaf, CEO of RMA Cambodia, which oversees EFG, says, setting up a franchise is a long and rigorous process, which involves getting every detail approved and inspected, from the location, decoration and uniform to the staff and training.

“Franchising is like a religion that you have to follow fully and the details are to a high level,” he says. “We have very specific details to be inspected on and it’s a long process before we have one outlet up and running.

“This is something anyone who’s thinking of any future franchises should keep in mind. It’s not a casual relationship; it’s a very, very structured and detailed one. All of these stages, to find the right location and the right design, to get it approved, to find the people, to equip it. This whole thing is not a walk in the park, it’s a big challenge.”

Having sat at the helm of RMA Cambodia for four years, Sharaf is no stranger to building up successful franchises. But, he adds, it hasn’t all been plain sailing convincing global companies to set up shop in Cambodia. “Sometimes it’s not an easy task to convince franchisers that Cambodia is ready and we have a very potential sector,” he says.

“It starts by strategic planning of the concept and is followed by looking for the right franchiser, digging deep in the franchiser’s portfolio, their records, which countries, how many outlets, how successful they are. Then we offer our readiness to represent that franchise and to be the franchiser in Cambodia.”

Part of the reason behind this boom in international brands is the steady emergence of a middle class with a more expendable income, Sharaf says. “Despite the increasing number of our outlets, you still find people queuing in our different outlets. One of the reasons is that we’ve got an increasing social economic middle-class. I could be spending $30 or $40 for a family in one of these franchises. In Cambodia, it’s not small money and we feel that it reflects the growth of this middle class.”

Other international brands in Cambodia include KFC, Gloria Jean’s Coffees, Spinelli and Sarpino’s Pizza. A Burger King outlet also recently opened at Phnom Penh International Airport and a Hard Rock Cafe is expected to open its doors in Siem Reap later this year.

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