Understanding the Survival Ability of Franchise Industries during the COVID-19 Crisis in Malaysia

Abstract

Since the world was hit by the COVID-19 pandemic crisis that began in December 2019,
many industries have been affected, including the franchise industry in Malaysia. Thus, the COVID-19
pandemic has had a great impact on business survival. Direct effects can be seen in reduced income,
job losses, changes in customer preferences, and business relationships between franchisors and
franchisees. Some franchises have had to close their operations, and others still struggled to survive
during the pandemic crisis. In addressing this situation, the role of government is crucial in supporting the resilience of these franchisor entrepreneurs in an increasingly worrisome situation around the
world. However, the existing literature that focuses on the role of government in developing countries such as Malaysia is still poorly understood. In addition, a study of the Malaysian franchising
industry during the pandemic crisis is still inadequate, especially concerning the government’s role
in the survival of local franchises during the pandemic era. Therefore, understanding the role of the
government in advocating the survival of local Malaysian franchises is worth studying. A qualitative
research approach was applied through multiple cases involving twelve (12) franchise business
owners and four (4) franchise-related agencies in Malaysia. In-depth interviews were conducted in
exploring this topic. Thematic analysis has been used by applying “Atlas.ti” in analysing the data.
Hence, the findings have indicated four themes from the grounded data. There are: (i) financial
assistance; (ii) virtual franchise exhibition; (iii) training and support; and (iv) business development
grants. This study is expected to highlight the role of government as well as agencies involved with
the franchising industry in improving policies, strategies, and programs to ensure the viability of the
franchise industry during periods of pandemic outbreaks.