7 Rising Franchises In Singapore: How Much Does It Cost To Start? (2021)

Franchise opportunities can be a good way to start up your own business, but you may need to deal with stiff rules and high costs. 

Attracted to the idea of running a business, but can’t come up with a halfway decent business proposal even if your life depended on it? Well, a franchise business might be ideal for you.

You’ll get all the thrills (and spills, if you launch an F&B business) of being in charge, with none of the stress of having to prove your business model in the ruthless open market. 

Intrigued? Read on to learn about seven popular franchises in Singapore, and how much they cost in start-up capital.

Understanding franchising in Singapore

What is a franchise?

A franchise is a type of business arrangement where an independent operator (franchisee) applies to a business (franchisor) to operate a stall or outlet on their behalf. 

The franchisee agrees to stick to the business model, formula and rules of the franchisor, in return for the right to display and use assets such as logo, brand name and aesthetics, while marketing and selling the brand’s products and services. 

In this sense, some who seek to go into business on their own view franchise opportunities as a  “business-in-a-box”, ready to go right out of the door. 

What are the pros and cons of franchising vs starting my own business?

Pros of choosing a franchise

Perhaps the biggest advantage of choosing a franchise is that you’ll be launching a business under an established brand, with a proven business model. This can save you the hard work of having to build up a brand from scratch. More importantly, it can help you bypass the perilous initial stage where new businesses are most likely to fail.  

As a franchisee, you will also receive guidance and training on how to properly run your business. You can also look forward to centralised marketing campaigns that help to promote your business (although some franchisors may charge an additional fee for advertising and marketing).

You will also order and use the parent company’s supplies, saving you the need to track down suppliers on your own, and dealing with storage, delivery and other logistical issues. This also helps ensure a certain quality standard in the products you sell, which is important in sectors such as F&B.

Cons of choosing a franchise

On the flipside, franchisors are often strict about their brand and image, and franchisees are expected to adhere strictly to a set of rules and guidelines. 

Hence, as a franchisee, you will find little to no room for innovation. You certainly shouldn’t expect to experiment with the menu or offerings, at least not without prior approval. This restriction also applies to marketing: you likely won’t be allowed to hold your own Facebook giveaway that is valid only at your particular branch. 

Secondly, all that support and advice come at a cost. You’ll be expected to share a certain portion of your monthly revenue with the franchisor. This could range from a flat amount to a percentage of revenue, depending on the terms of the agreement. 

Lastly, franchises may require a high start-up cost, especially for well-known ones like Mcdonalds. Some companies may also require a certain level of assets in order to qualify, to prevent questionable parties from mismanaging the brand.  

In contrast, launching an independent business may require lower initial capital, especially if you’re planning on a bootstrap approach. 

What are the typical costs and fees involved?

In general, franchisees should look out for the following costs and fees.

Franchise fee

This is a fee charged for the license to make use of the franchisor’s trademark. It can be tens of thousands or more, depending on the brand.

Initial start-up costs

These include expenses for rental, renovations, labour, and other things. Training fees may also be included here. Expect to set aside hundreds of thousands of dollars here.

Advertising fee

The franchisor may charge an advertising fee in exchange for general marketing support and advertising campaigns. This could range from several hundreds to thousands of dollars, and may be a regular or one-time fee.

Ingredients or supplies costs

Some franchisors may charge an additional fee for ingredients or supplies used in the course of business. This will vary according to the volume ordered. 

Royalty fees

Revenue share paid to the franchisor. May be a fixed amount or a portion of revenue earned. 

7 popular franchises in Singapore and how much they cost

Wee Nam Kee Chicken Rice

Franchisor: WNK International Franchise Pte Ltd
Tel: 6222 8511
Email: albert.tan@wnk.com.sg

Love chicken rice so much that you want to make a living selling it every day? Well, here’s your chance. 

The beloved Wee Nam Kee has opened the floodgates to chicken rice enthusiasts, offering a franchise model that lets you run a stall and crew selling the famous chicken rice. 

But your pockets better be deeper than your love for this quintessential Singaporean dish. Franchise costs are steep, costing half a million dollars at least. For that price, you should demand no less than a copy of the authentic family recipe we’re sure is locked up in the Wee family vault.

Founder Rou Gu Cha

Franchisor: Founder Rou Gu Cha International Franchise Pte Ltd
Web: https://www.consultft.com/
Tel: 6222 8511
Email: james@consultft.com

With a track record of over 40 years in Singapore, Founder Rou Gu Cha stands as one of the foremost restaurants selling this unique comfort food featuring lean pork ribs, deep fried fritters and a wholesome peppery soup. 

This dish was believed to be brought over from Fujian, China by Chinese settlers, who relied on this hearty dish to get them through a gruelling day down at the docks. As a franchisee, you’ll be helping to preserve a part of Singapore’s hawker heritage, saving this humble dish for future generations of fans in Singapore, as well as those from Hong Kong, Taiwan and around the world.

Franchise costs start at a reasonable S$200,000 per outlet, with a 6% royalty fee.  

7-Eleven

Franchisor: 7-Eleven
Web: https://www.7-eleven.com.sg/Franchising
Email: franchise@7-eleven.com.sg

If you’re a fan of late-night microwave suppers, you’ll agree there can never be too many 7-Elevens around.

The well-known convenience chain from Japan has established a global presence and is showing no signs of slowing down. Locally, it is even evolving by offering a suite of services such as bill payment and acting as delivery pick-up points. 

If you believe that 7-Eleven is here to stay (it’s difficult to conceive of a world without one, after all!), you can join them as a franchisee. Start-up costs are quite affordable: S$40,000 for initial shop renovation and set-up, and S$30,000 for franchise fee. 

Modern Montessori International 

Franchisor: Modern Montessori International Pte Ltd
Web: https://www.modern-montessori.com
Tel:  6220 8200
Email: Franchise@modern-montessori.com

One of the pioneers of early childhood education in Singapore, Modern Montessori International (MMI) is still going strong in the face of numerous players entering the sector over the past 20 years or so. 

Perhaps a testament to its patented pedagogy, MMI has continued to win several awards and has become a local household name.

If you’re interested in helping more children benefit from the MMI method, know that you’ll need nearly a million dollars in start-up capital, with initial start-up investment pegged at US$600,000, plus another US$100,000 in franchise fees. 

E² Young Engineers

Franchisor: E² Young Engineers
Web: https://www.youngeng.net
Tel:  +972-7470 19939
Email: roni@youngeng.net

With children growing up in a world of digital currencies, self-driving cars, and algorithms dogging their every step, tech, data and engineering capabilities will become ever more in demand.

Correspondingly, educators in the U.S. are pushing for more education in STEM (science, technology, engineering, mathematics), seeking to arm the next generation with the skills necessary to thrive. 

If this sounds like the next big thing kiasu Singporean parents should be obsessed about, get in on the action early with a franchisee license. You’ll need about US$100,000 to begin.

Trung Nguyen Coffee  

Franchisor: Trung Nguyen Singapore Pte Ltd
Web: https://www.trungnguyen.com.vn
Email: felipe@trungnguyen.com.sg 

Judging by the continued addition of new outlets and brands in spite of Starbucks’ stranglehold on the local landscape, coffee bars are a good bet in Singapore. 

For a truly unique offering, launch a Trung Nguyen Coffee franchise to bring the elegance of Vietnamese drip coffee - which connoisseurs reportedly swear by - to jaded coffee lovers seeking a new jolt. 

Be warned though - start-ups costs can reach up to US$200,000 or more, so you may need to rope in the whole coffee gang on this. 

Irish Potatoes

Franchisor: Noble House Business Brokers Inc.
Web: https://www.noblehouseph.com
Email: xtishell@yahoo.com

Fries make the perfect finger food, especially when they’re tossed up with copious amounts of tasty seasoning powders, like they do at Irish Potatoes. Even better, load them up with add-ons like bacon and slather on some cheese sauce, and you have a delicious reason to spend your afternoon in a blissful food coma. 

And with COVID-19 making dine-in a dicey concept for the foreseeable future, hungry shoppers will be looking out for something tasty, filling and convenient to eat while walking around. Something like Irish Potatoes. 

Apply as a franchisee to get your potato kiosks into neighbourhood malls and shopping centres and in front of customers. 

You’ll need to do some international dealing as the franchisor is located in The Philippines. However, start-up costs are quite affordable, about P$1,000,000 (that’s around S$27,000), and you’ll attain the right to operate up to three kiosks.  

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