Dreaming of Running Your Own Business? Here’s How Much Popular Franchises Cost in Singapore

Franchising offers you the chance to run a battle-tested business under an established brand – provided you can afford the costly start-up fees. Here are 15 popular franchises in Singapore, and how much they charge.

Franchising is a popular business strategy that many businesses use to build their brands. So widespread is franchising that some of the most well-known household names (like McDonald's and Ya Kun) are actually franchises! 

In franchising, a brand owner recruits willing and qualified parties as franchisees, who pay for a licence to conduct business under the brand, selling the same products and services. 

This arrangement allows franchisees to gain the chance to run a proven business model and keep the majority of the profits generated, while franchisors get to grow their brands, even across borders. 

Could franchising be the ideal path for those who dream of running their own successful businesses?

Table of contents

• How much do popular franchises cost?
• Things to note before starting a franchise
• How successful are franchises?
• Best business credit cards in Singapore

How much do popular franchises cost in Singapore?

We’ve picked out 15 popular franchises in Singapore, ranging from fitness to F&B and services, retail, education and lifestyle. 

As you can see, franchise and startup costs don’t come cheap – costing between tens to hundreds of thousands of dollars, depending on the type of business you’re targeting. 

Even within the same industry, franchise costs can differ significantly. For instance, Anytime Fitness lists its franchise fee as ranging up to over S$40,000, whereas Gold’s Gym does not charge a franchise fee at all. 

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And then, whether the franchise is local or foreign can also make a huge difference. Take for example, Kinderland Educare, a locally-grown enterprise, which charges a franchise fee of S$65,000. Meanwhile, Montessori – hailing from England – charges an eye-watering US$100,000 in franchise fees. 

You would have also noticed that there are a few different costs and fees listed for each franchise. Here’s an explanation of what these are.

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Things to take note of before starting a franchise

Franchise fee

This is the fee that you pay for the right to franchise the business, allowing you to legally use its branding, materials, products and other proprietary elements. Franchise fees are usually paid one time, but some franchise licences are issued for a fixed duration – such as say, a 5-year term. Upon expiry, you will have to pay the franchise fee to renew your licence.

Initial capital

As the franchisee, you are responsible for setting up your own store. This means you will have to pay for the equipment, renovations, labour, products and goods required to fully run the business. 

Note that some franchises – such as those in F&B or retail – can start with a small initial capital, whereas others such as gyms will require a heavy upfront investment to purchase equipment in sufficient quantities. (No one’s going to sign up for your newly opened gym if all you have is a squat rack and two sets of dumbbells.)

Royalty fee

Besides paying the franchise fee, you may also have to pay a monthly fee as a royalty to the franchisor. This is usually pegged at a percentage of your sales or net revenue, and can range from 3% to as high as 15%. 

Be wary of high royalty fees, as this can eat into your profits and make it difficult to grow your business. 

A&P fee

This is a nominal fee charged for advertising and promotion activities carried out by the franchisor. This can range from overarching branding campaigns that help to keep your franchise top of mind for consumers, to special brand-wide promotions to drive sales during special seasons.

See also: Starting a Business – Should You Use a Business Loan or a Personal Loan?

Is franchising a sure-win business opportunity?

You have to actually know how to run a business.

A franchise provides you with a proven business model, but making your business work is a whole different thing altogether. 

Look, a lot goes into running a business, and as the owner of the business, you are responsible for all of it. 

Everything from overall growth strategy to day-to-day operations, hiring employees and keeping them motivated and happy, and even answering complaints on Google reviews and late-night WhatsApp messages, you have to know how to manage it all. 

And don’t think all you need to do is to sign a few forms, attend a few days’ training, slap on a “We’re Hiring” sign on the window and disappear into your office to play video games all day. 

As the franchisee, you are responsible for reporting to HQ on things like sales figures and customer satisfaction and such. After all, no franchisor wants their painstakingly built brand to be run into the ground by a lazy franchisee. 

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It’s a long-haul financial commitment.

Forking over the franchise fee and paying for the initial costs is just the start. You need to be prepared for the long haul, as your business may take some time to stabilise and turn profitable.

This means that besides being able to raise the initial costs, you will also require sufficient funds to keep the business afloat through periods of low sales. You will also need to have enough funds to continually grow and develop the business, even (or especially) if the business is not bringing in enough money. 

For this reason, some franchisors only grant franchise licences to individuals that have a certain net worth. 

Success is far from guaranteed.

Franchising is undeniably attractive in many ways. But the reality is that success is far from guaranteed – otherwise everyone would be doing it already!

Look no further than the bubble tea business. Yes, the bubble tea segment in Singapore is a lot more established now, with several dominant players that have become homegrown brands. 

But surely you remember as a student picking up a cup of Quickly bubble tea for S$2 at that corner shop that seemingly sprang up overnight – and disappeared just as, uh, quickly?

There was indeed a bubble tea boom and bust that took place in the early 2000s, culminating in the mass shuttering of bubble tea shops across the island by 2004. And here’s the kicker – they were all franchises, which means it’s the business owners that bore the brunt of the losses. 

Remember, that costly franchise fee you’re paying only grants you the licence to use the brand and sell its products. You may also be offered some corporate and business support, but that’s about it. In no way does signing up as a franchisee guarantee you any form of business success. 

Best business credit cards in Singapore 2023

To kickstart your business, every successful franchisee needs a handy dandy business credit card or two to cover all important costs.

Some of our favourite business credit cards include:

Best for	Credit card	Key benefits	Details
Earn rewards on all spend	Citi Business Card	Earn 2X Citi ThankYou Points (or 0.8 miles) per S$1 spend Up to S$100,000 credit line available Up to 55 days interest-free credit	Up to S$1 million complimentary travel insurance per cardholder Complimentary corporate liability waiver insurance - US$25,000 per cardholder - US$1.65 million per company
Flexible credit limits	Maybank Business Platinum Mastercard	Earn 1 TREATS Points per S$1 on all spend Up to 20.05% fuel savings at Caltex kiosks with a Diamond Sky Fuel Card (must link Maybank Business Platinum Mastercard) Low interest rate of 20% p.a. - Up to 51 days of interest-free credit on purchases 2-year annual fee waiver	Complimentary business logo printing Complimentary travel insurance Withdrawal services at ATMs worldwide Global concierge services Maybank Auto PayBill to charge recurring bills Card T&Cs
E-commerce and recurring subscriptions	Aspire Card Welcome Gift: Get rewarded over S$50,000 worth of benefits from Aspire's partners when you apply. T&Cs apply. Welcome Gift: Get rewarded over S$50,000 worth of benefits from Aspire's partners when you apply. T&Cs apply.	Up to 1% cashback on digital marketing, Software subscriptions (SaaS), e-commerce, and business logistics No minimum spend No cashback cap	Comes with intuitive app Tiered pricing for business finance management  - Small start-ups: S$12 per month - Mid-size companies: S$99 per month - Large companies: Custom pricing

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