RELIANCE Travel launched its fifteenth franchise outlet this month in the suburb of Bukit Rimau, about 30km from Kuala Lumpur.
The company’s managing director, Tan Sin Chong, said: “This is our second franchise outlet for the year. As we have a target of opening three to four outlets a year, we have almost met our quota for 2011.”
Franchise owner, Steven Foo, said: “This is the only Reliance Travel outlet serving the communities of Bukit Rimau and Kemuning. It benefits them with the convenience of getting travel services almost at their doorstep.”
Foo’s investment in the 46.5m2 outlet was RM250,000 (US$84,000).
“We estimate our average monthly sales to be about RM400,000 to RM500,000,” Foo added.
Reliance had started franchising in 2001 “to expand (the company’s) distribution channels,” Tan explained.
“With rapid urbanisation of many parts of the country, urban centres have spread out to the extent that Kuala Lumpur today is one big metropolis,” he said. “By setting up franchise outlets in these urban centres, we can spread our wings and serve our customers better.”
He added: “By consolidating our presence (via franchising), the agency is also better positioned to withstand competition, especially from overseas.”
The franchise outlets now contribute 40 per cent to Reliance’s top line (sales).
“This translates to about two per cent contribution in terms of bottom line (profit),” Tan said. “This is because commission given to a retailer is higher than to an agent.”
By N. Nithiyananthan
