Franchise-Friendly Industries That Are Not F&B

COVID-19 brought about a staggering number of business closure and job losses in the past few years. However, this is a good opportunity for investors looking to become franchisees or individuals looking for a turnkey solution to becoming business owners. The emerging franchise sector is becoming increasingly appealing as shifting social and cultural norms will create opportunities for new concepts to expand quickly in the months to come.

The upcoming years present great opportunities for  a
boom in business growth especially after recovering
from the pandemic.

When we think of franchises, images of the thousands of fast-food restaurants that dot landscapes across the globe immediately come to mind, namely McDonald’s, Starbucks, KFC, Burger King and so on. Franchises, however, go well beyond fast-food chains. They are important to many industries vital in providing day-to-day services, from storage and warehousing to eyeglass stores and weight-loss centres. Today, the business model is stretching into new sectors.

There are many franchise businesses in industries that many might not immediately associate with franchising that investors can venture into. Here, we will discuss some of these sectors elaborately.

Real Estate

The real estate franchise business is not a common sight in Malaysia as most real estate companies are mega property developers such as Eco World Group, IOI Properties, SP Setia and Gamuda Land. You might not be aware but there are franchises in real estate right here in Malaysia. In fact, there is a franchise of ERA Real Estate in Penang. ERA Real Estate was founded on the premise of building a franchise system based on the principle of collaboration. The idea that by working together and helping one another, a stronger community of real estate professionals could be built.

ERA Asia Pacific holds the Master Franchise Rights for ERA Real Estate. They are open to anyone interested in becoming an ERA franchisor or franchisee for any country in Asia Pacific. Currently, they are the largest real estate network in Asia Pacific region with more than 637 offices. ERA real estate also has franchise companies in South Africa, Bahamas, Cayman Islands, Europe, Middle East and South America.

According to simplywall.st, the latest update on Malaysia’s real estate sector analysis shows the total revenue generated by the sector. It locked in at RM36.2 billion at the start of year 2022. Furthermore, the industry is forecasted to grow 12% annually possibly due to the rise of flexible and remote working. This offers investors the unique opportunity to diversify away from traditional franchise industries and benefit from significant returns on investment if they do decide to participate in real estate franchising.

As the middle-class population expands, more and more people are looking at renting their own properties.

Janitorial and Cleaning Services

Along with the consistent growth in Malaysia’s property development, professional cleaning service franchises are an exciting opportunity to explore. The pandemic has provided growth areas for the cleaning industry especially. Cleaning services are crucial in public spaces, offices, homes, schools, and public facilities, to name a few. With the need for disinfection and maintaining high-levels of hygiene to prevent the spread of viruses, cleaning companies are rising quickly to the top.

The cleaning industry that was once perceived as an industry of unskilled labour is now changing in coping with the sophistication of equipment and evolution of cleaning chemical through continuous research and development. Whether it is residential or commercial cleaning, the demands for professional cleaners are rapidly increasing especially during these pandemic times where hygiene is priority.

A notable example is commercial cleaning service company, HC Duraclean. They are a leading provider of outsourced facilities services with a long-standing service heritage. HC Duraclean owns patented cleaning machines and they formulate their own range of green cleaning solutions which are safe, economical and effective. With such assurance, investors are bound to be able to provide high quality services should they choose to own such a franchise.

The Master Franchisee is Duraclean International Incorporation located in the USA. The company is the first in Malaysia to offer a franchise in cleaning services with international affiliation with more than 60 years’ experience worldwide. At the moment they have 15 franchisees and train them on the suitable care and cleaning techniques to ensure that they deliver the highest performance standard.

If you think about it, every establishment and building have to be cleaned; a massive market.
Source: iFranchise Malaysia

Laundry Services

Self-service laundry facilities are also steadily offering franchising opportunities. One example is Malaysia’s top coin-free laundromat. One can invest in a self-service laundry business and earn stable income with merely simple management skills. Wash Studio Laundry offers loan and financing programs to assist new investors who are keen to fulfil their dreams of owning a self-service laundromat. This type of franchise is beneficial in terms of self-employment with flexible working hours.

With the ongoing challenging economy, the laundromat business has been tested and proven that it is far more recession-proof than any other businesses. In good and bad times, people must have clean clothes. Laundromats are offering valuable services to communities everywhere. In this type of franchising, it is estimated that there is a 30-35% return on investment with possibility of receiving a full payback period of within 2 years. This emerging franchise sector is becoming increasingly appealing for investors looking for their next big challenge.

Laundromats are businesses that require almost zero manpower, significantly reducing the cost of running.
Source: Wash Studio Laundry Facebook Page

Health and Wellness

This is the most exciting sector of the article.

Health and wellness were already an important topic even before the pandemic. In spite of that, the COVID-19 crisis made it rose to prominence in year 2020 and 2021 as the pandemic began to take its toll. Most consumers have become increasingly health conscious with consumers demanding products that are beneficial to their health. The overall focus has intensified on health and wellness, and thus, new investments in the sector are quickly emerging. According to a report on Health and Wellness in Malaysia, the industry is projected to see steady growth in retail volume terms over the forecast period.

The first franchise example is Sunrider. Sunrider Malaysia manufactures herbal products for health, beauty and household needs. Their founders are; Dr. Tei-Fu Chen who is a worldrenowned herbalist with a degree in pharmacy and his wife, Dr. Oi-Lin Chen who is a licensed medical doctor. They provide herbal products made with the highest standard of safety, quality and effectiveness by carefully extracting all the beneficial nutrients from herbs. Sunrider products holistically nourish (yin) and cleanse (yang) the body’s five systems with a precise combination of nutrients that promotes optimal health. They have an enterprise across 50 countries and territories, in partnership with thousands of Independent Business Owners and franchise store owners. This proves that it is a good opportunity for investors to explore the nutrition and supplement industry.

Other than that, the Malaysian Franchise Association has listed Hippopo as a franchise under wellness. They are the first and largest award-winning Baby Spa chain established in Malaysia with currently 15 outlets nationwide including East Malaysia. As a wellness centre, they provide ways to improve baby’s immune system, health, and growth that leads to a healthy lifestyle for them. Some spa services include baby gym, hydrotherapy (swim) and infant massage. This is a unique franchise that will thrive with more parents spoiling their precious little ones.

Lower birth rates mean that more parents are able to pamper their children, making baby-related sectors booming with potential.
Source: Hippopo Store

Another opportunity in this exciting sector is Eastern Biotech or more commonly known as House of Healing. The founder established this business to share about the beneficial use of sea cucumber, locally known in Malay as “gamat”, in traditional healing. In 2011, the company received the Emerging Franchisor of the Year Award presented by the Malaysian Franchise Association. Their success through more than 15 years of business is due to their franchise business system and network.

Whether starting up a real estate agency, jumping on the cleaning services trend, or delving into health and wellness, franchisees should be looking at less traditional industries. The Food and Beverage industry is not for everyone and there are plenty of other industries with equal – if not more – potential for massive growth. Such industries are expected to flourish these few years and for the foreseeable future.

Did you know, franchising is the most popular method of starting businesses in Malaysia? There are quite a lot of legalities surrounding buying or selling a franchise, and you should educate yourself well to protect your rights and investments. If you need a professional franchise advisor to help you make decisions, consider contacting Intellect Worldwide. We provide franchise matching opportunities and franchise planning services in Malaysia.