Overview of Malaysia Economy and Franchise Business for Asia Franchises and Franchisees

Posted by hgsba on June 14, 2018

Business Glance

The Malaysian economic climate showed good growth in 2012/2013 and is forecasted to exceed 5. 4% in 2014 with similar growth forecast to continue through to 2016. Demand is high in Malaysia with over 60% of Malaysia’s GDP contributed by domestic consumption. builderall como ganhar dinheiro

In 2013, 480 new franchisees moved into the industry and as of August 2014 there were over 700 registered dispenses with more than six, 000 outlets. The industry has growth capacity as it presently accounts for only 5% of total retail sales. Around 25% of franchises are in another country handled and domestic franchisors are global looking, being in 51 countries totalling 1, 494 outlets.

Foreign expansion by domestic franchisors:

1) Indonesia – twenty-two franchisors

2) China – 14 franchisors

3) Singapore – 17 franchisors

4) Philippines – 10 franchisors

5) India – 12 franchisors

6) Vietnam – 10 franchisors

7) Brunei – 10 franchisors

8) Arab Saudi – being unfaithful franchisors

9) UAE – 9 franchisors

10) Sydney – 7 franchisors

Malaysia has Asia’s and probably the world’s most business friendly government. Malaysia views franchising as an important economical driver and therefore it offers various sweeteners to encourage the expansion of the industry.

The Malaysian government actually has their own franchise development section which created the Country wide Franchise Development Master Program (PIPFN) 2012-2016. The plan sets out challenging goals and strategies:

To add 4. 3% of GROSS DOMESTIC PRODUCT by 2016.
To make contributions 9. 4% of GROSS DOMESTIC PRODUCT by 2020.
To have a 16% increase in the number of listed franchise companies by 2016.
To create Malaysia the franchising hub in South East Asia.
The plan is hitting its milestones with franchising contributing around 2. 7% of GDP in 2012 and the industry made approximately US$7. 5 billion.

The Perbadanan Lokal Berhad (PNS) is an agency owned by the Ministry of Finance Designed (MOF Inc. ) with the mandate to lead the introduction of Malaysia’s franchise industry. Several great finance schemes and taxes incentives are available to help existing businesses increase through franchising also to catch the attention of new franchises into the country.

For example, the Franchise Micro-Financing Scheme allows possible entrepreneurs with lower incomes the possibility to start businesses with mitigated risk. The PNS allocated RM8 million (approximately US$2. 5 million) to the program and as of early on April 2013, RM6 mil (approximately US$1. 9 million) was delivered. The Ministry has explained that it is not averse to pumping more funds into the scheme.

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