Maltese companies have a huge potential to franchise their businesses, according to Farrah Rose, director of The International Franchising Centre, who will be advising Maltese traders on the concept of franchising in a project administered by Malta Enterprise and the Chamber of Commerce and Industry and supported by the Commonwealth Secretariat.

Ms Rose knows Malta well and has been advising Café Jubilee - which is opening a restaurant in Budapest this weekend - for the past four years.

"Four years ago I was approached by the head of the franchising of HSBC London saying their counterpart in Malta has been approached by a local trader who wanted to franchise the business and the client was referred to us. I came to Malta with a view to make an assessment and a franchise proposition for Café Jubilee. During this time I travelled back and forth quite a bit and in fact I still work with them, with a view to market the franchise internationally," she says.

"It is probably because of Café Jubilee that I am sitting here today. I have found - not only because of the individuals running the business, but from a concepts and systems standpoint - they are possibly one of the most refined operators that I have come across in the last 30 years of my experience in international franchise development."

Ms Rose says the Café Jubilee concept is "absolutely superb" and "quite unique" and their systems are "hugely developed".

"Short of knowing how many grains of salt there are in the salt and pepper shakers the system is very well developed, very well prescribed. The business proprietors are hugely committed, professional, sharp and extremely focused. It's because of them and a couple of other businesses I have come across in Malta that makes me really believe that you have a huge potential in this market," she says.

She says she is extremely keen to take a look at the existing business infrastructure in Malta, both at a franchise level as well as an economic level and then to assess the relevance of franchising to some of the key entrepreneurs in Malta.

"Hopefully we will be in a position to develop some tool kits for entrepreneurs with strong concepts, sound track records and profitable businesses," she says.

Ms Rose says that the project in Malta will start as a result of research her organisation will be conducting in Malta to ascertain the existing infrastructure.

"I am talking about companies which actually meet the criteria and which have the capabilities of franchising the business. Assessing whether a particular business is able to be franchised is not exactly a complex task but it is quite an involved task. Just because a company has a concept and systems and is making a profit doesn't mean it can franchise the business," she explains.

She says that initially she will be looking at sound businesses which are looking to franchise their business both in the domestic market and then with a view to take their franchised brand into international markets.

"We want to indentify local franchise operators, to help have franchise agreements signed, with a view to grow their Malta brand into other countries."

There are five basic criteria, she says, to determine whether a business can be franchised. The first is whether the concept has got staying power. "There is no point in franchising a concept that is here today and gone tomorrow," she says.

The second is whether the business process is fully developed or not. "It would not be ethical to use the franchisee's money in developing your concept. Of course, certain businesses are constantly evolving, so you can never say a business process is fully developed, but it needs to be developed enough to allow the franchisee to run a clone of the franchise's business."

Thirdly, she would take a look at whether the business is profitable. The fourth consideration is whether the franchisee can be trained in franchise holder's system. The fifth is how well you can manage a franchise network.

"The franchisee is an independent business owner but they carry your brand and your promise of delivery of service. So you can't just allow them to carry on in the market on their own," she points out.

She believes that "generally speaking" the Maltese hospitality sector would be the most likely to be able to franchise its businesses, and the overseas markets chosen would depend on the particular brand involved.

"Catering would be a very good sector. Our research into the current infrastructure will point us correctly and accurately towards various sectors that are fully developed. At this stage, however, I would like to reserve judgement until we have done our research on businesses in Malta."

She acknowledges that not every operation is Burger King or McDonald's and that when they look at franchising they look at the components that make this particular business attractive.

"One of the key points is brand. Just because you don't have a brand that is highly recognisable internationally doesn't mean that you can't go into international markets. Of course you can as long as you have a system that can travel, and as long as you have the committed team and resources."

Many companies, she says, make a mistake by thinking they can get their local marketing manager or operational manger to read a book and franchise the business.

"It is unfortunately the road to ruin because there is a technique, there is a science and a whole lot of dos and don'ts behind franchising."

She says that as a general rule the franchise sector has done quite well in the global recession. "When the going gets tough, the tough gets going. Franchisees, because they have their own well-being, their own investment at stake, have worked extremely hard in order to ensure they do stay on track. Franchising will grow and is one of the best methods of international marketing."

Ms Rose emphasises that franchising is a "fantastic marketing medium" which has worked well in so many different countries, in a variety of sectors.

"However, in order for you to make sure that you succeed in franchising you need to look at the five criteria, make sure you put together a very sound international development strategy that tells you which markets to go to and what the criteria are for selecting those markets."

"Just because somebody receives a phone call from somebody in Bolivia doesn't mean Bolivia is the right market for you," she says.

She says the understanding of the culture and the business practices of the market one intends to work in is "absolutely crucial".

"I think HSBC, for example, have got a huge advantage over many other businesses, in terms of not only adapting themselves to the local culture but actually sending out the message to the rest of us," she says.