Industry Trends and Tips for Starting A Franchise In Singapore

An Interview with Donna Lee, Chair, FLA Singapore  donna-lee_chair_fla_high-res

Main trends and industry forecast for the local franchising and licensing industry in 2016
This year, we are seeing the popularity of franchising and licensing continue to rise, as more industries begin to adopt this business model as a way for businesses to expand their operations in foreign markets and entrepreneurs to enter the local marketplace.

Firstly, we still expect to see continued growth in mature franchising sectors such as the Food & Beverage (F&B) and Education sectors. We can expect grouping of various franchise brands under one umbrella, which can be seen in the current marketplace.

The education sector has always been highly valued in Singapore and franchises in this industry will continue to thrive; however, the franchisors will definitely need to upgrade and innovate to move in tandem with market trends and market expectations.


Local consumers are also very conscious of the latest gastronomic trends and are open to trying new fare, and we anticipate more international brands opening franchises to take advantage of the flourishing F&B scene.

Secondly, the retail industry in Singapore is anticipated to grow even more competitive as consumers shift their focus from traditional brick-and-mortar shops to the online marketplace. However, we do not see this being a bane for the franchises; instead, we are excited to see how franchises and businesses leverage on the opportunities presented by the online retail boom to grow their customer base and operations. Concepts like the shop-in-shop model is another alternative that franchisors/licensors are embarking on recently as well.

Finally, we anticipate a continued upward trend in the Wellness and Health & Fitness industry. Local consumers are becoming more conscious of the need for healthy living, even as the government focuses their efforts on health and fitness campaigns such as the National Steps Challenge and Lose to Win programme. In fact, franchising and licensing is proving to be a viable business model for the health sector – besides the increasing number of gyms being set up, we are also seeing more physiotherapy clinics opening up franchises in Singapore, and we expect this number to grow further in the next few years.

What businesses can one do to keep up with the changes?
Singapore is a savvy and competitive market. Regardless of industry, all franchisees and franchisors need to constantly innovate and keep abreast of trends in order to cater to the changing market demands and grow their business. Franchises in the F&B industry should constantly keep themselves updated on the gastronomic trends and tastes and preferences of local consumers, so that they can not only adapt, but also predict future trends in the market.

Retailers will need to continually innovate and see how they can expand their franchise in the online marketplace if they want to get a share of this market segment. They can consider creating an online presence for themselves, as the online space is now largely where potential customers interact. This can come in the form of an official website, or via social media channels such as Twitter and Facebook, where they can communicate with their customers. If done effectively, such strategies can help them build relationships and increase awareness of their brand. Of course, not forgetting e-commerce platforms, which are getting more prominent within this region as well.

With the Health & Fitness industry strengthening, businesses operating in this sector can consider expanding to other markets through franchising, while current franchises can watch the market for any new developments and see how they can differentiate themselves from their competitors.

No doubt, the franchising industry is evolving and expanding locally as more businesses are opening up to this growth model. Be it in the education sector, or retail and fitness, potential business owners and entrepreneurs can keep a lookout for franchising opportunities in any industry. In the same way, successful businesses in Singapore can easily look for suitable markets to expand their operations out of the country.

Whether franchisor or franchisee, the Franchising and Licensing Association (FLA) Singapore is a great place for business owners to begin their franchising journey. Members can enjoy educational programmes and courses from well-established national franchise associations and attend FLA’s own Fundamentals of Franchise Management workshop (FFM) to learn more about starting out in the industry. FLA also helps members get a leg into the industry by organising networking sessions and providing publicity for members, amongst other activities.

Top tips for starting a franchising business in Singapore

Know the industry
Before you begin your franchising journey, you need to have a thorough understanding of the industry the franchise is operating in. Be it Food & Beverage, Health & Fitness or any other industry, keen market knowledge will allow you to anticipate the challenges and opportunities, and give you a leg up in the competitive environment even before you begin.

Know your product/service
Having a clear understanding of your product and service lets you seek out more opportunities for growth and expansion. Franchisors should also ensure that their franchise business is viable and can be adopted in international markets and across different cultures.

Understand that having a franchise is like owning a business of your own
Like any business owner, franchisees need to understand that their franchise is their business. Spending time learning about it, developing its operations and speaking to the right people in the industry can do wonders in helping you ensure that your business is moving along on the right track.

Location, market readiness and market size is key
Before you jump into a franchise, understanding the location, market readiness and size of the market you plan to open the business are keys to success.

  • Location – It is important to get experienced support that can help you identify the perfect location and environment for your business. Another tip is to always analyse the area, taking into account details such as traffic patterns, demographics and future building projects or store openings that might have an impact on your business.
  • Market readiness – Do your research to find out if the market you intend to expand into is ready for your business. While an oversaturated market may mean a more competitive business environment, a market that is not open or ready for your product or service will also affect reception and success of your franchise.
  • Market size – Market size is important in forecasting the growth potential of the franchise in a particular market. Consider the price point of your product or service, your target or potential audience and their purchasing power.

Grow a capable team and develop strong business processes
Manpower is also a top point for consideration. Hiring and developing a capable and efficient team to run your daily business will be highly beneficial in organising the operations of running a franchise, so that you can concentrate on expanding your franchise. Additionally, having strong operating processes, business systems and support in place is a must in franchising.


Keep track of trends
Take some time out each day to ensure that you are up-to-date on the latest trends in the market, and to see how you can use them to your advantage. Trends are constantly changing, so ensure that you keep track of the market news by tapping into online marketing and social media platforms.

While franchising may seem like a daunting task for any new business owner, the Franchising and Licensing Association (Singapore) has been set up to help them through their journey. The association organises many events, mission trips, seminars and conferences for both members and investors who are keen to learn more about franchising. In particular, Fundamentals of Franchise Management (FFM) is FLA Singapore’s flagship workshop conducted several times a year and designed with the purpose of helping and guiding businesses in their franchising needs along with local and international expansion.

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