Starting a business from scratch is a big step, and it involves time and effort and a good deal of risk. If you do not want to take the traditional route, applying for a franchise licence might be for you.
There are many established franchises with proven business models and brand awareness in Malaysia. The average cost of applying for a franchise in Malaysia ranges from just RM15,000 all the way up to RM1,000,000. Some of the more well-known franchises in Malaysia include KFC, McDonald’s, 7-Eleven, tealive, Anytime Fitness, and Mailbox ETC but there are many others that may not require such a large upfront investment.
The Basics You Should Know
Franchising offers several advantages, but like anything, there are also some disadvantages that you should be aware of before embarking on this journey.
| The Pros of Franchising | The Cons of Franchising |
|---|---|
| · Franchises come with a ready-made business plan. · Less risky. · Business assistance from franchisor. · Established brand recognition. | · High start-up costs. · Less flexibility. · Ongoing royalty payments. |
How to Choose Which Franchise Business to Start
Once you have weighed up the pros and cons, the next step will be to decide which franchise business is right for you. A few things to consider:
- Your experience in the industry of the franchise you wish to operate.
- Your interest – remember: most successful businesses are a direct result of the passion and commitment of the people running them!
- Does the product or service have staying power?
- Investment and ongoing costs to run the franchise.
Start-Up Costs
To start a franchise business, you need to be prepared to invest initial capital, a franchise fee, and ongoing royalties to the franchisor. In return, the franchisor grants you the right to operate the business under the franchise system’s trademarks, and provides you with ongoing training and assistance.
In this article, we have compiled a list of selected franchise opportunities that are available in Malaysia for you to evaluate and decide. Do note these requirements may change from time to time.
Food & Beverage Franchise Businesses
| Business | Capital Required | Franchise Fee | Royalties |
|---|---|---|---|
| Big Apple Donuts & Coffee | USD1,500,000 – USD3,000,000 | USD300,000 – USD500,000 | 5% |
| Boost Juice | RM250,000 – RM350,000 | RM65,000 | 6% |
| Daily Fresh | RM85,000 – RM120,000 | RM25,000 | 2% |
| Kenny Rogers Roasters | From RM1,269,000 | USD20,000.00 | 4% of gross sales |
| Marrybrown | RM800,000 – RM1,000,000 | RM120,000 | 4% of gross sales |
| McDonald’s | RM1,500,000 – RM3,500,000 | USD45,000 | 5% |
| Nelson’s | RM15,000 – RM60,000 | RM5,000 – RM12,000 | N/A |
| OLDTOWN White Coffee | From RM700,000 – RM1,000,000 | RM80,000 | 5% |
| Sakae Sushi | USD500,000 – USD700,000 (depending on markets) | USD100,000 | 5% – 8% |
| Secret Recipe | From RM600,000 | RM150,000 | 5% of net sales |
| Subway | RM607,946 – RM1,057,131 | RM44,900 | 8% |
| tealive | From RM250,000+ | RM75,000 | 3% |
| The Chicken Rice Shop | RM300,000 – RM500,000 | N/A | N/A |
| The Manhattan Fish Market | USD280,000 – USD490,000 | USD30,000 | N/A |
| Winner’s Fried Chicken | Below RM5,000 | RM1,000 | None |
Retail Franchise Businesses
| Business | Capital Required | Franchise Fee | Royalties |
|---|---|---|---|
| 7-Eleven | RM250,000 | RM100,000 | 10% |
| Bonia | RM145,000 | RM20,000 | N/A |
| Focus Point | RM400,000 | RM60,000 | 5% |
| Hai-O Enterprise | RM300,000 | RM20,000 | N/A |
| Ms. Read | RM250,000 | RM60,000 | 7% |
| Shins | RM300,000 | RM50,000 | 3% |
| Vincci | RM400,000 | RM38,000 | 4% |
Services Franchise Businesses
| Business | Capital Required | Franchise Fee | Royalties |
|---|---|---|---|
| Anytime Fitness | RM1,200,000 | USD60,000 | RM6,400 |
| AquaNano | RM76,000 – RM125,000 | N/A | None |
| Clara International | RM138,000 – RM 200,000 | RM20,000 | 1% of monthly gross sales |
| Eye Level | RM85,000 | RM13,000 | Varies |
| Global Art & Creative | RM50,000 – RM100,000 | RM20,000 | 15% |
| Kumon | From RM70,000 | From RM10,000 | N/A |
| Laundry Bar | RM167,000 – RM281,000 | N/A | N/A |
| Mailbox ETC | From RM80,000 | RM50,000 | 2% of monthly gross sales |
| Mr. Clean | RM130,000 – RM300,000 | RM50,000 | 5% of monthly gross sales |
| Q-dees | RM100,000 | RM50,000 | 5% |
| Smart Reader Kids | N/A | RM40,000 – RM50,000 | N/A |
| Yamaha Music School | RM400,000 | RM50,000 | N/A |
Follow Your Heart
Investing in a franchise is a convenient alternative to setting up a business from scratch. However, becoming a franchisee is not for everyone. Before you commit, make sure you evaluate the pros and cons, do your research, and seek legal advice. To learn more about the steps for setting up a franchise business, read more in this article.