McDonald's Franchise in Malaysia: Investment costs, requirements, application process, contact details
By Spider Computech on Wednesday 22 April 2015
Want to start a McDonald's franchise in Malaysia? McDonald's is looking for dynamic and local entrepreneurs who are passionate about both the brand and the business. Learn how to become a McDonald's franchisee in Malaysia either by starting a restaurant from scratch or by purchasing an existing restaurant. Find out the financial requirements of McDonald's franchise, investment costs and expected returns, area requirements, franchisee application process, and McDonald's Malaysia contact details. Read on! Why open a McDonald's franchise in Malaysia?
Opening a McDonald's franchise in Malaysia can be rewarding as the country's food and beverage industry is expected to grow steadily in the upcoming years. Also, the franchise business model is a tested and proven one for McDonald's: almost 70 percent of their global business is handled by individual entrepreneurs. By October 2014, the American fast food chain brand already has 68 outlets across the nation and are looking forward to expand their business further. If you are interested in the quick service restaurant (QSR) industry, McDonald's should be a good option. Nevertheless, please remember that businesspeople interested in opening a McDonald's restaurant in Malaysia must be willing to relocate anywhere within the country.
Financial requirements of McDonald's franchise in Malaysia
There are several financial requirements to become a McDonald's franchisee. In this section we will discuss them in detail, including initial investments or start up costs, expected returns, financing options and so on. Keep reading!
Minimum personal financial requirement for McDonald's dealership
As per the criterion of McDonald's, a potential franchisee must have a personal net worth of not less than RM 3 million. This is to make sure that the person is financially independent, and he or she may self-finance the business and / or qualifies for a bank loan if necessary.
Start-up Cost for McDonald's Franchise: Initial investments break-up
The initial investment for a McDonalds franchise will vary depending on the type of the establishment: mall restaurants, shop front restaurants, special site restaurants, or drive-throughs. Usually, drive-through outlets are the most expensive ones. In general, the cost of opening a McDonald's franchise in Malaysia will be anywhere between RM 2 million and RM 4.5 million. Given below is an estimated break-up details of McDonald's franchise investments; both for new restaurants starting from scratch, and for purchasing existing ones.
Cost for setting up new McDonald's franchise restaurant in Malaysia
- Franchise Fees: USD 22,500 for a term of 10 years which has to be paid during the starting of the franchise restaurant or prior to that.
- Security Deposit: A security deposit worth RM 50,000 is to be paid. It is interest free and will be refunded after successful completion of the franchise period.
- Pre-Opening Expenses: These expenses include training of the staff, living costs during the training period, stock trading, and other usual start up costs. Together, they will range between RM 200,000 to RM 250,000.
- Furniture and Decoration: The necessary kitchen equipment, furniture, decor and landscaping services etc have to be done by individual suppliers. Approximately, you have to put aside RM 1.8 million to RM 2.5 million for all these things.
- Civil Works: Depending on your store type as mentioned earlier, you will require an estimated investment of RM 1 million to RM 3 million for all the civil works to be done, including building construction, ventilation, and any renovations done to the premises.
- Miscellaneous Costs: Apart from all these start up expenses, you have to pay the government the stamp duty in addition to the working capital. Also, the franchisee has to pay the legal fees involved for the preparation of required documents.
Cost for buying an existing McDonald's franchise restaurant
The price of a McDonald's franchise restaurant in Malaysia will depend on its market value at the time of the purchase. Nevertheless, please note that you will also have to pay the franchise fees and security deposit mentioned above.
Please note that all the estimated cost for McDonalds restaurant in Malaysia are just approximations and may change in an actual setting or without prior notification. Also, there is a general rule for McDonald's franchisees that no less than 30 percent of the start up expenses has to be funded from personal wealth not borrowed from anywhere.
The usual term of a McDonald's franchise in malaysia is 10 (ten) years or length of lease of the premise concerned. For more details about cost or investments, and to keep yourself update, please visit the official website of McDonald's Malaysia.
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Financing options for McDonald's franchisees
As mentioned earlier, 30 percent of the initial cost to set up your restaurant has to be unborrowed. The rest can be taken as a bank loan. You may not have a friend or relative as a business partner; however in certain cases they might allow your parents to fund your enterprise. Please note that McDonald's will not do any kind of financing.
Expected returns for McDonald's franchisee: How much can you make?
Well, nothing is certain in a business. Everything will depend on how you actually fair in your job. Your business acumen, interest, professional outlook, involvement in the local community, and your ability to drive sales and manage your workforce are all going to be important factors for your expected return on investment.
How to apply for a McDonald's franchise in Malaysia?
If you want to become a franchisee of McDonald's Malaysia, the steps of application process are quite simple. At the first stage, submit your application by duly filling in the McDonald's Malaysia franchise application form which can be availed from the official website. The form will be reviewed thoroughly; and once the authorities are satisfied, an interview will be arranged. The interview will cover your goals, backgrounds, business interests and so on. Upon mutually agreeing to move on to the next stage, an On The Job Evaluation (OJE) will be done. You will be required to work in an existing McDonald's restaurant for a few days so that the authorities may observe how you actually fair in the job, and you too may have a fair idea about their business operation. If everything goes nicely, you will be required to undergo a franchisee training for 1 year, to thoroughly prepare you to become a McDonald's franchisee.
Contact details for McDonald's franchising in Malaysia
If you have further queries about opening a franchise restaurant of McDonald's Malaysia, you may please send an email to franchising at my dot mcd dot com.
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