SUCCESS FACTORS OF MICRO-FRANCHISE BUSINESSES IN MALAYSIA

Abstract

The traditional franchise business normally requires a huge amount of investment that will only provide opportunity to the middle and high-income group. However, micro-franchise which based from the traditional franchise has proven to be a successful method of owning a business and contributes to positive economic growth for the low-income group. Malaysia has replicated the concept and launched the micro-franchise business in year 2012 with the aim of giving low-income and poor people the opportunity to own a business with affordable start-up costs. Since then, the low-income group has embraced the micro-franchise business model as the source of income generation. While micro-franchising has been around in other parts of the countries for so many years, remarkably, very few studies on micro-franchise business model has been published, let alone, in Malaysia. Therefore, this research attempt to identify the success of micro-franchise business in Malaysia, particularly in the state of Selangor. This research employed an explanatory case study method, using the semi-structured interview to collect the data on 11 micro-franchise enterprises. The findings of this research have shown that the low-income people are able to keep-up and embraced the model successfully.  Among the success factors highlighted were product continuity and consistency, brand reputation and credibility, strategic business location, high profit margin and faster break-even and franchisees’ personal traits and characteristics.