Franchise business can give individual the opportunity to start a business with an excellent chance of success at a minimum risk.
Lets take an example, McDonald, is a fast food restaurant and it becomes popular since many years ago. How does McDonald making money? By franchising, am I right?
Let’s take a very basic calculation:
One restaurant is selling 100 burgers per day and let’s assume the profit is MYR 1 per burger.
So, the retail profit is MYR 100 per day.
And assuming they have 100 branches, MYR 100 * 100 branches = MYR 10,000 per day.
Can you see the picture? It is a great idea that you are considering using franchising as a method of expanding your business.
As far as I known, Old Town and Secret Recipe are example of local franchisors so their fees are not as huge as McDonald and KFC. The cost of a franchise depends on the franchisor and the restaurant size, type and its location.
How Much Does A McDonald’s Franchise Cost ?
The costs for starting a new McDonald’s restaurant can be anything between MYR 1.5 million to MYR 3.5 million.
On an ongoing basis, your costs may include royalty fees which generally between 4 to 6% of your revenue. Besides, you need to pay advertising fees, legal fees, equipment maintenance, employee training, rent, insurance, and inventory.