Looking for the best franchise opportunities in Singapore? Many Singaporeans prefer getting into entrepreneurship, for a variety of reasons such as boring office work routines, need for more time to run their life among others. With that said, there are two ways that you can get into entrepreneurship, starting a business from scratch, or choosing one of the many franchise opportunities in Singapore.
Each has their benefits, and it requires that you do much research to make the right decision. In this article, we will look at the franchise opportunities in Singapore and how you should select the right one.
For first time entrepreneurs, there is surmounting risk such as the financial burden associated with running a business, and a franchise is a better option. By banking on an established brand, entrepreneurs in Singapore can increase their chances of success.
For example, local entrepreneurs have been the main gateway for big food industry players such as Wing Tai, Subway, among others to enter into the Singaporean market through franchising.
With that said, choosing the right franchising opportunity in Singapore requires that you undertake extensive research. To nudge you in the right direction, we have compiled several points that you should consider when you are in the process of selecting a franchise opportunity in Singapore.
Consider the Different Types of Franchises in Singapore
There is a diverse range of franchise opportunities available in Singapore, with the most popular being food chains, retail chains, education chains, consulting chains to name a few. With that said, there are many Singapore based franchises and an even higher number of foreign-based franchise opportunities.
Before you settle on a franchise, you have to do some self-reflection to know where your passions lie and the reasons why you are getting into entrepreneurship. It would be counterproductive if you have a passion and skills in the culinary arts for you to settle on a fitness training franchise irrespective on how attractive the offer is or high chances of success. Think of franchising as starting a new business where your skills will come in handy, and your passion will keep you going when the business is going through tribulations.
You should also consider that you will need start-up costs just like in starting a business from scratch in the form of variable and fixed costs. The fixed costs are in the form of the one-time franchising fee which in most cases is non-refundable. The variable costs come in the form of the expenses incurred while running the business.
By doing a self-assessment you will be able to determine whether you are willing to borrow funds for the business, then you will start to get a clear picture of the type of franchise you should choose. Many people have bought into franchises after the franchiser promised that they would get their money back in a short time only for them to regret the decision.
Be willing to overlook the selling gimmicks of the franchiser when making your decision. If you go into debt for a business, be sure that it is the right one to stick with even when times get tough. Besides this, if you ask any franchisee who has achieved success in Singapore, they will tell you that it took them several years for the business to break even.
When considering between the different types of franchises that there are in the market, be sure to work out
- How much you are willing to invest in the business
- Whether there is a need to employ people right off the bat
- The amount of money you need to make to break even
- How you want to make a living off the franchise
Several franchising opportunities might tick some but not all of these boxes. However, there are some low-cost franchises available in the market in virtually all sectors, as well as white collar and food-based franchises to choose from in Singapore.
Meet with The Franchiser
After doing an evaluation of the different types of franchise opportunities and narrowing them down to a few that pick your interest, you should make a point to meet the management in person. The chances are that the franchiser has a website where you can schedule an appointment in the ‘Contact Us’ section.
Go to the head office of the franchise in Singapore and take a look around and assess for yourself if it is what you are looking for in a franchise brand. Chat and communicate effectively with the management about your plans and what you think about their business.
Chances are the franchiser will also be looking to assess if you are the right person to take on as a franchisee. The management will give you a deeper understanding of how they operate. The meeting and visit around the facility will also help you in making the decision on which franchise to choose.
However, when you go for the meeting, have an open mind, this is because the complexity of the business operations may leave you stunned. Many would be franchisees have given up on taking up a franchise business at this stage of identifying a franchising opportunity because they panicked when they saw all the work and the processes that go into the running of the business.
After seeing all there is to the business and administrative processes, you can then make the start considering whether to choose it or go for another brand. While you are doing the tour of the facility, be sure to ask as many questions as possible since relying on the franchise handbook may prove to be tricky at some point in the future.
Do Your Research
At this stage, you will have narrowed down to the franchise that best suits your skills and business aspirations. However, before you sign the franchise contract, ensure that to do your due diligence. When researching the company, there are many aspects that you can look into, but there are two essential aspects; reading and understanding the Franchise Disclosure Document (FDD) and if possible, talk to the existing franchisees.
Understanding the franchise disclosure document is the first step to having a deeper understanding of what the franchise needs from you. It will also help you gain an understanding of what the business is all about, apart from what you have been seeing as an outsider or a customer.
In the FDD, the franchiser ought to disclose the company history, as well as the support programs that the company offers to its franchisees. This includes programs such as marketing, human resources, and the sales support you will receive. Also look out for the monetary aspect of the franchise such as the start-up costs projected variable costs, royalties, and any other fees you will pay to the franchiser.
Another aspect that you ought to consider before you take up a franchise in Singapore is visiting the other franchisees already in the business. You will know all there is about the business something which you will not learn from the FDD. Besides this, the franchisees will help you anticipate any surprises you can expect after opening the business such as the time it might take you to break even and the quality of support you will get from the franchiser.
Visiting other franchisees will give you a reality check on the franchise. Be sure to ask them about the corporate support provided by the franchiser as well as the difficulty of running the business in Singapore. However, do not be in a hurry while conducting your research since you might miss some important details. For example, the process can take you more than a month to compile adequate information on various aspects of the franchise.
Making the Final Decision
When you have narrowed down to your preferred franchise, it is time to make a formal visit to the company and let them know of your interest in becoming a franchisee. The one thing that all franchise opportunities have in common is that they reward hardworking franchisees.
You will need to use all the tools you have bought from the franchiser to ensure the success of your business. Remember that you are buying into a business and you can sell it whenever the price and the timing is right for you; that is when you have achieved maximum return on your investment and at a time when you want to explore other opportunities in the business landscape.
Reasons Why Franchising Is Better Than Starting A Business from Scratch in Singapore
The process of choosing a franchising opportunity can be daunting and with the many requirements as described in the FDD might dampen your spirits. However, it is much better than starting a business from scratch and here are five reasons why you ought to choose a franchising opportunity in Singapore.
For many start-up businesses in Singapore and the world over, they have to bootstrap the business during the first few months, sometimes years, which is a period that is filled with uncertainties. Going the franchise way has several benefits that allow you to hit the ground running.
For example, if you are looking for a retail franchise, Ya Kun Kaya Toast is one of the leading retail chains that will give you connections to suppliers, marketers, and so much more. If you are going for a service-oriented franchise, you will not require to have real estate to get started, and with the connections provided by the franchiser, it will be easier to start-up and scale your business.
Support and Guidance
There are many things to consider when starting and in the eventual running of the business. We never get to hear of many start-up businesses despite their solid solutions to everyday needs because they could not overcome the teething problems. However, investing in a franchise will give you guaranteed support and guidance to overcome the hurdles facing new businesses. Take for example, Cheers, a retail franchise, they will run the business for at least one year to see the profitability of the location as well as help you in running the business.
Immediate Brand Recognition
To make a name for yourself in Singapore comes at a high cost in terms of advertising and marketing expenses and this can run to the millions before you become a recognised brand. Seeing that there are many aspects of the business that require money, such as acquiring inventory and hiring employees, channelling the funds in brand recognition would be counterproductive.
Seeing the Singaporeans prefer brands that they know and trust, you are better placed in going the franchise way. For example, if you want to go into the hospitality or food business, a franchise such as Prima Deli will help you stand out over your local competition.
There is Reduced Risk
Much guesswork as well as trial and error come into play when starting a new business. However, buying into a franchise accords you less risk since the business model have been shown to work. Besides this, you will get training on how to handle clients and all aspects of business operations.
When it comes to marketing, when the parent company undertakes a marketing campaign, your business will greatly benefit that when you had to do it all on your own. Even when you are new to an area, the reputation of the franchise brand can initiate word of mouth promotion and customer referrals which will ensure that you get customers as soon as you open your doors for business. A perfect example is Nanyang Old Coffee, it is a specialist brand with over 8 outlets in Singapore.
There are multiple ways that franchise brands can expand and it is easy for you to scale up your business. You can start your business in one location, and as things look up, you can open more locations. On the other hand, if you have a home-based service franchise, you could start by offering residential services then scale up to provide commercial services.
A perfect example of a franchise that is easy to scale up is in the restaurant business. You could start by offering an eat-in service and in time, begin offering home, and office deliveries then go as far as offering catering services as well as opening new branches. This is possible due to the support you get from your franchise brand, such as Old Chang Kee.
There are many franchise opportunities to choose from in Singapore, and we hope that this article has shed light on how to pick the right one. You have no option but to do due diligence on your part to understand how it will work with your business aspirations.
Once you identify the right franchise and seal the deal with the parent company, the next thing crucial step that you need to take is hire a professional digital marketing agency in Singapore. We, MediaOne are committed to helping new franchises get a firm footing by providing data based digital marketing strategies. Call us today at (65) 6789 9852 or contact our support team directly for more details about our services.