An introduction to FDS Hong Kong

The latest branch of Franchise Development Services is perfectly placed to help businesses take advantage of the fantastic opportunities in the franchise market across the region.

Franchise Development Services Hong Kong officially opened in November, becoming the latest branch of a company boasting more than 30 years’ experience in the franchising market.

For a company that thrives on experience, Joint Managing Directors Frankie Fan and William Yeomans are ideal to front the venture, both being well versed in the business world, coming from privately-held investment and consultancy company The Prentice Group, where they forged a highly successful partnership between 2012 and 2014.

Formerly a Director at Prentice, Hong Kong-educated Fan specialised in business consulting, commercial real estate services and the development of new investment opportunities.

Yeomans meanwhile, joined FDS after serving as Operations Director at Prentice, and brings significant experience in operations, finance and business development from various roles.

Opportunity

FDS Hong Kong will work with businesses to enable development through franchising in the Greater China region, and provide a service to help investors and prospective franchise owners successfully expand throughout their target markets using the franchising model.

The expansion comes at an exciting time for a region ripe for franchising, where excellent opportunities abound due to government policy that seeks to meet the huge demand among the populace for high-quality international brands that they recognise and which come with a certain status symbol attached.

The Chinese Government encourages franchising as a way of bringing proven operational protocols and systems to Chinese investors, which the government sees a safer and more programmatic method of promoting economic growth and an expansion of services.

Markets

Different parts of the region offer different opportunities, making it a very broad and inviting market to all sorts of potential investors.

Hong Kong, for one, represents a densely populated market with a growing population of some 7.5 million people from diverse cultural backgrounds. It is a true business hub comprised of Hong Kong-Chinese and foreign expatriates who live and work there, as well as business people and tourists from Mainland China, and the rest of the world.

Hong Kong already has more than 100 franchise brands in the retail sector. Upwards of five new shopping malls are currently under construction, and at least a further 10 are in the planning stage.

People there are becoming more affluent as the economy develops, and have more capital available to invest in their own business, with franchising proving an ever more popular entry route.

In terms of specific markets, Fan notes that the food and beverage sector has great opportunity for stand-out concepts with “strong brand identity & corporate image”, eye-catching design, and restaurant environments with unique experiences and atmospheres.

In terms of products, he believes long-standing brands that display creative and regularly updated food and drinks menus are likely to thrive. Trading on their European identity and history will work to their advantage, and food products that effectively display the continent’s “very strong cultural characteristics” will be a hit with Hong Kong consumers who also seek strong signature dishes.

From an investment perspective, such brands are also likely to appeal to Hong Kong markets and investors, because the cultural diversity of the residents necessitates options to appeal to all, and a group who’s tastes and preferences are constantly evolving.

In retail, Fan is confident that quality, reputable western brands are hugely sought after in the Hong Kong market. A fine example of this group is cocoa grower and chocolatier, Hotel Chocolat, a brand which is at an advanced stage of ambitious plans to open up to 10 stores in Hong Kong alone, having sold a minority stake to fund the development.

Children’s brands and the services sector are also attractive to Hong Kong markets, where the dense population have strong acceptance to foreign brands and new, modern, concepts and technologies. Proven results, a strong corporate image and good value for money are the key factors in these areas.

Fan gives the example of fitness franchises like Irish success-story Sasta and beauty clinics as businesses likely to perform strongly here.

While Macau is a less populated market of some 630,000 residents, it enjoys an equally thriving tourism industry, receiving more than 22 million visitors every year. For this reason, while the service, children’s and business sectors may not offer the same potential as in Hong Kong, brands in the food and beverage and retail markets are again likely to perform strongly here.

Mainland China, with its huge population is a complex market, more so than Hong Kong, with which it shares market characteristics in its “tier-one” cities.

Less competition, and therefore greater opportunity, can be found in the second and third tier cities, where there is space for new brands to enter and perform well, with the added prospect of further sustained market growth.

It is clear that there has never been a better time to look into the myriad investment opportunities in each of these markets, and for businesses that believe they can expand through franchising here, FDS Hong Kong should be the first port of call.

FDS (Asia) Pte Ltd/Asiawide Trends Pte Ltd