Coming from the core of the Southeast Asia, the beautiful country of Malaysia is full of opportunities for those who are brave enough to start a franchise. If you have a strong desire to enter the market of franchise business in Malaysia, this comprehensive guide will prompt you in such way how to set up a franchise business. Understanding the concept of franchising to moving ahead with the regulations and joining hands with the Malaysia Franchise Association (MFA) is our responsibility. Let’s get started!
Content Outline
Franchise Business in Malaysia
A franchise business in Malaysia is an exclusive arrangement whereby an experienced company (franchisor) gives its brand and business model to individuals (franchisees) who are granted the rights to operate their own companies under the franchisor’s brand and system. In the end, the franchisees will pay the fees and royalties to the franchisor for this opportunity and also for the continuous support.
The main advantages of franchising include the use of a brand and business model that has already been established, the risk minimization when you open a new business, and the support of the franchisor. While franchising allow franchisees to have the freedom to run their business while following the franchisor’s standards, franchisees must pay various fees, and sign a franchise agreement. This model can be seen in the fast food, retail and hospitality industries, which gives the opportunity to entrepreneurs to own a business, but at the same time take advantage of the franchisor’s resources and reputation.
Read Set Up Company in Malaysia Guide
What is Malaysia Franchise Association (MFA)
The MFA (Malaysia Franchise Association) is one of the main organizations in Malaysia that is responsible for the promotion and development of the franchising industry in the country. Established in 1994, MFA (the Malawi Franchising Association) was set up to support the government’s policy directive to encourage entrepreneurship through franchising. Through an early establishment of an environment favorable to franchising, the country’s expansion of the sector will be facilitated.
MFA helps the franchisors and franchisees in their present and future status through various sources of information and the media. Its membership structure is diversified, covering both franchisors and potential franchisors, master franchisees and aspiring master franchisees, government agencies and banks, as well as accounting firms, franchise consultants, legal advisers, and franchise suppliers, all of which are working under one roof.
MFA is the only one association in Malaysia which has been recognised by two international organisations namely the World Franchise Council (WFC) and the Asian Pacific Franchise Confederation (APFC). The undertaking of this honor stands for its value in the international franchising network and places it as the main actor in the field of franchising promotion and regulation franchise business in Malaysia.
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Guide to Initiating a Franchise Business in Malaysia
Opening a franchise business in Malaysia is a multi-step process with the aim of making your venture successful.
Here’s a summary of the essential steps you need to follow:
Step 1: Budget Planning for Your Franchise Business in Malaysia
Budget planning is the first and foremost step in your franchise journey. Take into account not only the initial franchise fee but as well the ongoing expenses like rent, staffing, marketing, and inventory. The case of the clear view of your financial capabilities and limitations must be done before entering into the franchise.
Step 2: Conduct Market Research and Explore Franchise Opportunities in Malaysia
Market research acts as your navigational tool, which is essential in planning and making the right decision. Dive into your potential market, studying and analyzing franchises available in this field. Analyze determinants such as the market saturation, consumers tastes and preferences, and economic indicators to find the franchise that best conforms to your ambitions.
MIXUE franchise fee Malaysia
Take MIXUE as example, by understanding the MIXUE franchise fee structure in Malaysia is essential for informed decision-making:
In stark contrast with traditional franchising concepts run by the bubble tea industry, MIXUE’s model is lower cost to enter and easy to operate. This model is unique because it enables franchisees to avoid franchise fees, management fees, and renovation costs that are common in the other franchising models. Materials fee is the only constant expense incurred by MIXUE franchises, setting it apart as a very affordable and accessible business opportunity.
Initial Franchise Fee: This lump sum amount enables the use of the MIXUE name and business plan.
Ongoing Royalty Fees: These charges are levied on the merchants as a percentage of their total sales and are used to fund the platform’s operations and branding.
Before plunging into business, assess your financial readiness by determining the initial investment amount and the possible funding options. Some franchisors provide franchisees with an all-inclusive support package to ensure that they can achieve relevant growth.
Step 3: Engage with past and present franchisees
Getting the feel of the franchisee’s interaction and the current franchisee’s insights can be very useful and informative to the system that you are considering. Learn about their treks, obstacles encountered and successful moments. Such conversations may tell you whether the franchisor is ready to guide you or not and if the franchise may be profitable in future.
Step 4: Seek guidance from the Malaysia Franchise Association (MFA)
Joining hands with MFA, you can enjoy the opportunity to take the best of what the Malaysia franchise has to offer. They provide expert opinions on how to move through the franchising process in Malaysia and its different legal and regulatory frameworks. Deploy their resources to make sure that your franchise adheres to all industry norms and regulations.
Step 5: Consult with advisors or legal professionals for guidance
It is a smart thing to do to ask for invaluable advice from franchise consultants and legal experts. They may indulge in reviewing franchise agreements, explaining legal duties, and giving customized advice based on their experience. This domain expertise will ensure that you will have the capability to take sound business decisions during your journey of franchise.
Step 6: Develop a comprehensive business plan
Having finished the above-mentioned steps, the next step will be the preparation of a business plan based on the obtained data. This plan is actually the basis of your success steps. In other words, it should consider short-term and long-term aims, marketing strategies, financial predictions, and contingency plans. A well-drafted business plan not only provides directions but also turns out to be the key factor when you are searching for financing or investors.
Step 7: Registering Your Franchise Agreement in Malaysia
A crucial thing is to ensure that your franchise agreement is legally sound and in line with the Malaysian law. This particular agreement will define the rules and agreements which you will have to follow when you are working with the franchisor. When the agreement has been concluded then it is necessary to register it to keep your rights and interests safe as a franchisee. In Malaysia, this registration process should be undertaken with both the Registrar of Franchise (ROF) and Suruhanjaya Syarikat Malaysia (SSM).
Fastlane Group: Your Partner for Franchise Business Setup and Support in Malaysia
Set up a franchise company in Malaysia is not an easy task that needs careful planning, research, and legal compliance. Through the process as mentioned in this guide and by seeking the counsel of organizations like the Malaysia Franchise Association (MFA), you can set up your franchise business in Malaysia on the right path.
FastLane Group all-inclusive services cover every stage of your franchising process, from company registration to business support.
Company Registration: We make the company registration process easy and compliant with the Malaysian regulations. Our professional team will help you in compliance with legal requirements, which will make the process of establishment of your franchise company easy and effective.
HR Payroll Services: The management of human resources and payroll is complicated particularly in a franchise organization. Fastlane Group provides dependable HR payroll solutions customized to the needs of your franchise, enabling you to concentrate on business development, while we manage payroll processing, compliance, and employee administration.
Business Support: Apart from the setup, we offer continuous support to ensure the success of your franchise business. Our accounting, audit and taxation services ensure that you maintain financial transparency, comply with regulatory requirements and maximize the performance of your franchise business in Malaysia.
Fastlane Group as your partner, will help you successfully navigate the intricacies of franchise business operations. We are dedicated to enabling your franchise journey in Malaysia from start to growth.
