Singapore consumers enjoy one of the highest standards of living in the world, with a per capita Gross Domestic Product of over US$36,000. Despite a small population of 4.84 million, Singapore is home to more than 400 franchise concepts. Foreign franchises are well received in Singapore and the United States is by far the largest supplier of foreign franchises in the country. There are American franchises in practically every industry. McDonald's, Starbucks, Ben and Jerrys, Gymboree, New Horizons, Mister Minit, Avis, Hertz, Holiday Inn, Toys R Us, and many others have operations in Singapore. More recent U.S. franchises include On-line Trading Academy, Comfort Keepers, and Contours Express. Australian franchises in a variety of industries have some presence in Singapore while Japanese and Taiwanese franchises are mainly in the F&B business.
The Franchising and Licensing Association of Singapore estimates that total sales turnover of franchises in Singapore amounted to US$3.6 billion in 2005 (latest available data). Foreign franchises (especially from the United States) are estimated to account for 70% of franchise sales in the country. However, local franchise concepts have grown rapidly over the past few years and many of the larger ones are franchising abroad in Asia and several have opened outlets in the United States
Any new and innovative franchises, especially child-related or elder care-related franchise concepts. F&B concepts are still popular.
Asset rich Singapore firms and entrepreneurs continue to seek new business concepts to introduce into Singapore and the region. Many are looking to diversify their business and some are seeking investments for their children. However, potential franchisees are now more discerning. Best prospects include F&B concepts and child-related/training franchises. The success of selling a franchise in Singapore is based on a number of factors including brand name, up-front costs and royalties, the concept’s uniqueness and the flexibility of the franchise agreement. U.S. franchisors should note that real estate in Singapore is very expensive and getting good locations is a challenge, especially for those in the retail and F&B business.
Singapore is the gateway to Southeast Asia. Its multi-racial society makes the country an ideal location for foreign franchisors to test their concepts and use the reaction to gauge the acceptance of their concepts in Asia. With its strategic location and well-developed infrastructure, Singapore serves as the regional showcase and distribution center for products and services from all over the world. Residents from the region travel often to Singapore for business and leisure, making Singapore a good springboard for U.S. franchisors wishing to enter the markets of Asia. There are also opportunities for U.S. franchisors to work with Singapore companies with good connections overseas to enter third countries.