Decided to start a franchising thread because seems like there is quite a bit of interest in it (including from me) but most of the discussions are hidden in threads about "Business for RM50K" and franchising doughnut shops and MacDonald's.

Shall start off with a few basic questions:
1. Must all franchises be owned by a registered partnership/company?
2. Can a franchise be owned, or part-owned by a foreigner?
3. Are there really franchises that you can get for RM50K, with monthly costs (fees, manpower, rent) below RM5K?

For me, I'm interested in franchises in the F&B and computer industry.

May I know which is the website that states the regulations of a franchise - such as the requirement that franchise can be foreign-owned but maximum only 30%? Did a search on Internet but cannot really find...

So far two of the more affordably priced F&B franchises that I came across are Baguz Bytes and 1901 Hotdogs. Franchise fee and initial capital add together should be less than RM100K and monthly costs estimated to be less than 10%. Any comments on these or others?

Regarding MAT Kiosk, it seems like there is a lot of bad press about it as it is managed by the same people that introduced the Airku water vending machines.

It varies, most charge a royalty fee of the monthly sales. This can vary between 3-5% but some as high as 10%. And some franchisors also charge an advertising & promotion fee of between 1-3%.

One non-food franchise I recently came across is Camps & Apparels, that sell outdoor gear, school uniforms, apparels and accessories, and security/safety equipment. Anyone heard of it or has some views about it?

Also, anyone considering going into food & beverage franchises, feel free to PM me and we can discuss some business possibilities and ventures...

Time to kickstart this thread back to life!

I have visited and spoken with several F&B franchisors and shortlisted two based on the following criteria:
- Responsive to emails, phone calls and questions
- Franchise fee + start-up capital less than RM100,000 (this rules out big brand names like MacDonald's, KFC, Delifrance, Starbucks, Secret Recipe)
- Attractive brand positioning
- Stable sales at existing outlets
- Reasonable well prepared franchise procedures

The two franchises are 1901 Hotdogs and Daily Fresh, both have over 50 outlets across the country and still growing. Seeking 1 or 2 partners who are interested to JV to set up a franchise outlet in their area. Start-up costs, monthly costs and profits will be split according to a profit-sharing ratio to be discussed in more detail. Drop me a PM and we can discuss further.

Cheers,
Sam

This post has been edited by techventurer: Jul 28 2008, 03:24 PM

Glad to see some good points being raised on both sides of the discussion - franchising versus setting up own business. No doubt that each has its advantages and disadvantages.

I would say that in franchising, you are basically paying for two things - an established brand name and the business knowledge. This usually means that the business can be set up more quickly and with less headaches and hassle, especially if the franchisor is a good one that can provide advice, guidance and well-documented procedures. In some cases the money forked out for franchise fee is also covered by cost savings, because there is no need to hunt for cheap suppliers. In addition, franchising itself may actually be a stepping stone to setting up your own business, as it will allow you to gain knowledge and experience quickly.

On the flip side, definitely there is some loss of control. You don't feel like you own the business 100%, because franchisors usually impose restrictions on what you can sell and how you can sell them. Also there are fees to be paid to the franchisor, both initially (franchise fee + setup) and on a regular basis (royalty and admin fees). For some very established franchises like McDonald's and Coffee Bean, the franchise fee alone can be above RM100,000 and the total start-up cost close to RM1 million. However, there are also some newer franchises where the start-up capital is less than RM100,000.

As mentioned earlier in the thread, I have shortlisted a few based on certain criteria. It has always been one of my business dreams to own a small F&B business. If there's anyone who has similar interest in such ventures, feel free to PM me!

Not all franchises cost 1-1.5 million, some are available for 5% of that amount.

Also, do note that I did say it MAY (as opposed to WILL) be a stepping stone to an owned business. For example, there are cases of people buying a single-unit franchise to build up knowledge and experience, and after that making use of these to launch their own shop or chain to compete directly or indirectly with the original franchisor. Things like this do happen in the business world.

I definitely agree - direct employment is another effective and certainly cheaper way to understand a business or industry.

Just a note of caution that one must ensure that the relatively risk-free nature does not result in insulation from the nuances of business. Eyes and minds still need to be kept wide open.

Haha yeah, this thread seems to have died.

Franchising International Malaysia is on at PWTC this weekend, think it can be considered the biggest local franchising event for the year. Anyone interested to go? More info can be found at the website: http://www.mfa.org.my/fim2008/index.php