Malaysia’s franchise sector is projected to grow its annual sales to RM22.66 billion by 2025, up from RM14.65 billion in 2020, Prime Minister Datuk Seri Ismail Sabri Yaakob announced on 8 September 2022 at the opening of the 29th Franchise International Malaysia Exhibition and Conference (FIM2022) in Petaling Jaya. The forecast, released as the three-day trade show began, implies a compound rise of roughly 9 percent a year and would add thousands of new outlets and tens of thousands of jobs across the country.
Expansion pace accelerates after pandemic lull
The 2020 lockdowns shrank overall retail activity, yet franchise networks rebounded faster than independent stores. Domestic Trade and Consumer Affairs Ministry data show that the number of franchise premises jumped 47 percent in 2021 alone, reaching 13,779. That surge created about 49,000 positions, from store crew to logistics staff. Ismail Sabri told delegates the rebound was “faster than expected” and credited government grants, rental rebates and digital-voucher schemes introduced under the National Franchise Development Programme. “I believe that more jobs will be created with the rising number of franchise companies in the country,” he said. The target for 2025 implies an extra 4,000-5,000 outlets if average unit sales hold steady, according to back-of-the-envelope figures released by the Malaysian Franchise Association (MFA).
Home-grown brands push abroad
Local concepts now outnumber foreign ones inside the registry kept by the Franchise Development Division. Of 1,149 brands recorded under the Franchise Act 1998, 62 percent are Malaysian-born. They range from nasi lemak chains to car-service centres. Encouraged by trade missions organised by the Malaysia External Trade Development Corporation, 68 home-grown brands have set up shop in 74 countries. “We are seeing interest from the Middle East and Europe for halal food concepts, while Southeast Asian neighbours import our education and childcare formats,” said MFA president Datuk Seri Garry Chua on the exhibition floor. The government wants overseas revenue to account for 30 percent of total franchise sales by 2025, up from an estimated 18 percent last year.
Micro-franchise route for low-income households
A parallel track is being built for entrepreneurs with limited capital. The Micro and Affordable Franchise Development Programme, launched in 2021, trims set-up cost to below RM15,000 by using container stalls, mobile carts and shared kitchens. Participants receive a 70 percent training subsidy and can tap zero-interest loans under the BSN Micro scheme. “We have approved 420 micro operators so far; 60 percent are women and 80 percent come from the B40 group,” Deputy Minister of Domestic Trade and Consumer Affairs Datuk Rosol Wahid said during a side briefing. The ministry’s internal survey claims average monthly net profit of RM3,500 after six months, although independent auditors have yet to verify the figure. If scaled nationwide, the micro segment could absorb another 5,000 heads of household by 2025, the deputy minister added.
FIM2022 aims for RM450 million investment pipeline
The trade show, running until 10 September at the Malaysia International Trade and Exhibition Centre, has drawn 91 exhibitors from nine countries including South Korea, Japan, the Philippines and Turkey. Organisers expect 14,000 visitors ranging from prospective franchisees to private-equity scouts. On the first morning alone, 320 MOUs were logged at the on-site business-matching desk. “We are targeting RM450 million in committed investments, both domestic and inbound,” said Nur Aida Abdullah, chief executive of the event’s management company. Panels during the conference track will cover digital onboarding, supply-chain resilience and environmental, social and governance metrics that lenders now require. Banks including Maybank, CIMB and RHB have set up counters to pre-approve financing packages for qualified buyers.
The government regards franchising as a low-risk entry point for first-time employers because the model bundles branding, training and supplier credit. With the national unemployment rate at 3.7 percent in July 2022, officials hope the sector can absorb new graduates and retrenched workers alike. Whether the RM22.66 billion mark is reached will hinge on consumer spending holding up amid global rate hikes and on local brands keeping their edge as they venture abroad.
