Franchises May Help Curb Rising Unemployment

Taiwan Journal:

During these times of economic uncertainty, people are looking for new ways to make ends meet. In view of the record number of participants to the 10th Taipei International Chain and Franchise Exhibition, joining a franchise seems to have become a popular option.

More than 150 franchised businesses set up over 500 booths at the fair to promote a record 200-plus brands. The exhibition, which took place in Taipei Feb. 13 to 16, attracted nearly 180,000 visitors, representing roughly a 38-percent increase compared to last year’s event.

According to industry estimates, there are over 1,600 franchise businesses headquartered in Taiwan with more than 85,000 stores around the island, contributing NT$1.65 trillion (US$47.4 billion) a year to the country’s economy. More than 3,000 new outlets open islandwide every year, most of them in the retail and food service sectors.

Many visitors at the fair were thinking seriously about starting a business. “There is no longer any job security,” a man sighed. “You never know what is going to happen next, and joining a franchise seems to stand a better chance of success than starting from scratch,” said the man who is currently working at a high-tech firm.

Industry analysts seem to agree with his assessment. According to Liu Ju-chu, secretary-general of the Association of Chain and Franchise Promotion Taiwan, the event’s organizer, only 20 percent of startups make it through the first year. With franchisers’ resources and support, the success rate can reach 60 percent. Some companies, mostly in the food service sector, even promise their franchisees that they can recover their initial investment in one year or less. These franchises typically charge a one-time fee between NT$200,000 to NT$600,000 to join them.

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