nitial Franchise Fee: $20,000
Expenses While Training: $5,000 to $8,500
Land: $0 to $350,000
Site Work & Paving: $0 to $125,000
Building Costs: $100,000 to $225,000
Signs & Menu Boards: $15,000 to $40,000
Furniture, Fixtures & Equipment: $125,000 to $175,000
Insurance: $2,200 to $3,500
Opening Inventory: $2,500 to $5,000
Misc. Expenses: $1,200 to $3,600
Security & Utility Deposits: $2,100 to $3,000
Advertising: $5,000 to $5,000
Additional Funds for Three Months: $10,000 to $30,000
TOTAL $288,000 TO $993,600
Franchise means owns and run your own business. The franchisee owns the hard assets, equipment, fit-out, furniture, decoration and etc. Once the franchisee is accepted, he is granted the right to use the franchisor's name, methods, recipes, training programmes, designs and the systems. On his part, he is expected to conform to certain standards, protecting the franchisor's reputation and to pay to the franchisor a percentage of sales which is called royalty.
The selection process is no doubt the most important stage in opening a successful franchise business, that is, the selection of the franchisor by the franchisee and the selection of the franchisee by the franchisor. There are some basic rules that should be followed by both the franchisor and the franchisee.
The rules for the franchisor to pick a franchisee, is to check the reference of the franchisee and whether his financial is sound. Find out about the previous business or employment record of the franchisee. Lastly to find out how the franchisee intends to manage the business e.g. himself, family members or a professional manager.
Another major benefit of opening a franchise in Malaysia is the very strong government support for both franchisors and franchisees.
Franchising is certainly a good way of getting into business and if the guidelines are followed and good legal advice is sought, then the chance of success is greatly increased.