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The Franchise
Growth Option
Have you often wondered how entrepreneurs
achieve instant stardom by building a
business and then suddenly grow to become
national and even international success
through franchise operations? Think of the
many international and local companies who
have sprouted outlets all over the country
and the world with their homegrown product
and service ideas and you may be persuaded
to see that success in the retail and
consumer-driven businesses comes faster
through the franchise than any other
business growth option.
Unlike other business growth strategies,
franchising enables the growing company the
opportunity to expand rapidly where your
business growth is supported by other
stakeholders through the franchise system.
As a successful entrepreneur with your first
or a few established outlets, you may not
have the necessary resources to grow your
business quickly but franchising offers you
additional sources of capital to finance the
building of a strong retail brand and the
ability to operate in markets usually out of
the reach of the early-growth business.
Franchisees, on the other hand, reduce the
risk of independent ownership through the
franchise system where the structured
handholding by the franchisor ensures that
their business remains healthy and growing.
Whether you are a small or medium
enterprise, franchising offers companies
with limited capital the opportunity to
succeed at national or regional levels where
when operationalised and positioned
effectively, franchising fast tracks
business growth from start-up through to
globalisation. It is one of the key
objectives of the Ninth Malaysia Plan that a
greater number of Malaysian franchises be
developed as a market growth and market
entry strategy for regional and
international markets and the SME
Franchise product and service – offered
in partnership with Perbadanan Nasional
Berhad (PNS) – may be the product for
you. PNS, an agency of the Ministry of
Entrepreneur and Co-operative Development (MECD)
has been mandated as the lead agency in
developing the Franchise Development
Programme (FDP) under the Ninth Malaysia
Plan. PNS is striving to develop world class
franchisepreneurs through superior delivery
of integrated services and comprehensive
products in realising its vision to be the
lead corporation in providing total
franchise solution.
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SME
Clasification |
Micro |
Small |
Medium |
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SME Profile |
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Start-Up Franchisors, Would
be Franchisors, Established
Local Franchisors, Master
Franchisee in Manufacturing
and Manufacturing-Related
Services (including food,
retailing, education,
healthcare, ICT, agro-based,
hotel and tourism) |
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Eligibility |
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Franchisees only |
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Malaysian-owned and
controlled company |
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Registered with the
Malaysian Franchise
Association (MFA) |
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Franchisors registered with
the Registrar of Franchise (ROF) |
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Completed mandatory
franchise courses with MFA |
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Franchisee with less than 2
years business track record |
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Franchisors |
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Master franchisees |
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Franchisee to a foreign
franchisor |
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Would-be franchisors |
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Franchisees |
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Malaysian-owned and
controlled company |
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Registered with the
Malaysian Franchise
Association (MFA) |
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Franchisors registered with
the Registrar of Franchise (ROF) |
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Completed mandatory
franchise courses with MFA |
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Potential franchisors with
less than 2 years track
record developing franchise
product, or converting
existing business to
franchise business |
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Franchisee opening or
expanding franchise
operations with less or more
than 2 years record |
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Franchisors |
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Master franchisees |
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Franchisee to a foreign
franchisor |
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Would-be franchisors |
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Franchisees |
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Malaysian-owned and
controlled company |
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Registered with the
Malaysian Franchise
Association (MFA) |
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Franchisors registered with
the Registrar of Franchise (ROF) |
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Completed mandatory
franchise courses with MFA |
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Potential franchisors with
at least 2 years track
record developing franchise
product, or converting
existing business to
franchise business |
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Franchisee opening or
expanding franchise
operations with less or more
than 2 years record |
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The SME Franchise is
unique in that through the joint
offering of the SME Bank and PNS as the
Government agency focusing on strategic
and national franchise development in
the country, the product focuses on the
evaluation, growth and sustenance of the
franchise route for local would-be
franchisors and franchisees. At the
start-up phase, the SME Bank together
with PNS will assess the franchise
potential of your business even if you
do not have collateral or the mandatory
track record. Our objective is to offer
the franchise route even to start-ups as
it would structure the growth of your
franchise opportunities from Day 1.
However, if you already have a
franchisable and established business,
so much the better as it will help us to
accelerate the processing of your
financial and franchise development
requirements.
Special Funds
In addition, we may
also be able to match your franchise
development requirements with the
appropriate dedicated funds or
programmes which are being channeled
through the SME Bank and PNS. The main
criteria is the franchise viability of
your business idea (for start-ups) or
the franchise readiness of your business
(for small to medium-sized
enterprises). Depending on the business
stage at which franchise interest is
registered, you may also be eligible for
our other SME products and services such
as the SME Start-Up, SME
Professional and/or the SME
Global. Again, our officers will be
able to direct you to our other products
on application.
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SME
Clasification |
Micro |
Small |
Medium |
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Type of Financing |
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Conventional and Islamic |
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Conventional and Islamic |
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Conventional and Islamic |
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Facilities |
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Term Loan |
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Revolving
Loan |
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IHP /
Leasing |
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BG / Letter
of Credit |
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Term Loan |
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Revolving
Loan |
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IHP /
Leasing |
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BG / Letter
of Credit |
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Loan Stock |
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Term Loan |
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Revolving
Loan |
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IHP /
Leasing |
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BG / Letter
of Credit |
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Loan Stock |
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Limit of Financing |
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Franchisee
- Up to RM500,000 |
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Potential /
Would-be Franchisor and
existing Franchisor - Up to
RM5 million |
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Franchisee
- Up to RM3 million |
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Potential /
Would-be Franchisor and
existing Franchisor - Up to
RM10 million |
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Franchisee
- Up to RM3 million |
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Interest Rates |
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Competitive
rates subject to terms of
funds and risk ratings where
applicable |
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Tenure |
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Up to a
maximum of 15 years subject
to assets financed |
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Working
capital up to 5 years,
subject to annual review |
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Up to a
maximum of 3 years grace
period |
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Method of Repayment |
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Monthly,
Quarterly, Progressive,
Fixed or Tiered Repayment |
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Processing Fee |
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0.25% of
approved loan |
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Strategic Partners
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