Many Intraday.my readers want to start their own business, but are still worried about the risk of failure, lack of experience and high start-up costs. Because of this, the franchise business model is becoming increasingly popular in Malaysia because it offers a more structured system and a brand that consumers are already familiar with.
In a situation where the cost of living and business competition are increasingly challenging, franchising is seen as a safer option for new entrepreneurs who want to enter the business world without starting completely from scratch.
1. Brands That Already Have Customers
One of the biggest advantages of a franchise business is that the brand is already known in the market. Consumers are more likely to trust brands that they have seen on social media, in shopping malls or have many branches.
This helps franchise owners attract customers faster compared to building their own brand which requires more time and marketing costs.
2. Already Organized Operating System
Franchises usually come with operational SOPs, employee training, stock systems and suppliers that have been tested.
New entrepreneurs do not need to do too much trial and error because most of the processes have been set by the brand owner. This helps reduce the risk of operational errors, especially for those who are doing business for the first time.
3. Easy to Get Business Support
Most franchise companies provide assistance in terms of training, location selection, marketing and operational monitoring.
Some franchises also provide assistance with opening a store until operations are stable. This factor is especially important for entrepreneurs who still lack experience in business management.
4. Easier to Get Financing
Franchise businesses with a good track record are more likely to get the attention of financial institutions and entrepreneur development agencies.
In Malaysia, among the organizations that actively assist in franchise development is Perbadanan Nasional Berhad (PERNAS), in addition to certain schemes from MARA and local banks.
Some franchises also offer payment plans or financing cooperation to new entrepreneurs.
5. Potential to Expand Branches Faster
Once one branch is stable, it is easier for owners to open a second or third branch because the operating system is already in place.
This is different from regular businesses that have to rebuild the operational process from scratch every time they want to expand.
How Much Capital Is Required to Start a Franchise Business?
The initial capital for a franchise in Malaysia depends on the type of business and location. For a small kiosk such as a beverage or snack bar, the capital can start from around RM15,000 to RM80,000.
For a restaurant or cafe, the cost can reach RM150,000 to over RM500,000 because it involves renovation, a commercial kitchen and a premium location. Service franchises such as laundry, education centres or couriers usually require capital of around RM30,000 to RM200,000.
These costs usually include:
Franchise fee
Premise renovation
Rental deposit
Machinery and equipment
Start-up stock
Business licence
Several months of working capital
Although franchises offer a more stable system, entrepreneurs still need to assess the location, operating costs and market demand before making a decision. Choosing a brand that suits the capital and management capabilities also plays a big role in determining the success of a franchise business.
