Building The Next Generation Of Franchises In Malaysia

The Covid-19 pandemic that hit Malaysian shores has only proven to be more difficult over time for businesses nationwide, particularly small and medium enterprises (SMEs) and micro small and medium enterprises (MSMEs).

In efforts to help these groups along with the B40 and the M40 communities, the Ministry of Domestic Trade and Consumer Affairs has launched the Micro Franchise and Affordable Franchise Development Programme.

The programme consists of two types of grants, with the first one being the facilitating grant. The grant is a matching grant that is directly for the B40 and M40 groups that aspire to start their own business through a franchise or as a franchisee.

Financing of up to RM90,000 is provided for operating or to kickstart an affordable franchise package priced RM100,000 and below. Additionally, there is also a micro-franchise package priced RM50,000 and below.

Applicants can choose from more than 10 brands that comes with a franchise package of RM100,000 and below. The second grant option under the programme is allocated to help franchisors create smaller sized franchise packages of RM100,000 or less. It is a full grant with a maximum payment of RM120,000.

Besides helping franchisors expand through smaller sized franchise packages, it would also lower the entry barrier for potential franchisees, with Putrajaya aiming at those from the B40 and M40 population, as well as those affected by the Covid-19 pandemic.

POTENTIAL OUTCOMES

“For applicants as a potential franchisee, franchises have a lower risk as compared to starting your own business from scratch. There’s usually immediate momentum on opening through established brand equity of the franchise and the established customer base of the franchise.

“Franchisors would be able to expand their business through a larger pool of third-party investors as the entry fees is more affordable for the B40 and M40 to join in,” says Secretary General of The Ministry Of Domestic Trade And Consumer Affairs, Datuk Seri Hj Hasnol Zam Zam bin Hj Ahmad.

He also highlights that applicant must be from the B40 or M40 group and applicants already engaged the franchisor or the interested brand, approvals would be easier.

“We are currently looking at a minimum of 27 applicants for potential franchisees and a minimum of 8 applicants for the creation of micro and affordable franchise packages by the franchisors,” he says.

Once the applications are approved for the franchisees, training and guidance will be provided by both the franchisor and Ministry.

AREAS OF FOCUS

The programme covers various sectors, namely food and beverages, services and maintenances, education and enrichment centers, clothes and accessories, health and beauty, information technology including telecommunication and electronics and also convenience stores as well as supermarkets.

To better complement the programme, the Ministry is working closely with the Malaysian Franchise Association (MFA) and Perbadanan Nasional Berhad (PERNAS) along with a number of franchisors and franchisees.

Additionally, the programme has also seen the likes of reputable brands such as Manhattan Fish Market come on board to help the Ministry create more affordable- sized packages for potential applicants.

“This programme has helped franchisors nationwide promote their business and the strategic collaboration with various agencies is also expected to help franchisors secure strategic business locations for their brands, especially through their B40 and M40 future-franchisees.

“We are expecting more franchisors to join in to further expand our initiatives and the Ministry is also committed to move away from the perception that the franchise business is only for the rich as it is often termed as a luxury venture,” he says.

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