Franchise interest for Singapore’s education enterprises rising
An expert said local education businesses have been performing extremely well in China.
Years ago, entrepreneurs’ top choices for franchising Singaporean businesses were typically food and beverage (F&B) or retail. Today, many franchisees recognise the potential of the Lion City’s education enterprises beyond its borders.
“Education [has] become the next hot thing. Singapore is well known for our highest standards of education, so it’s a very sought-after model for regional countries,” Astreem Consulting founder, Hsien Naidu, told the Singapore Business Review on the sidelines of the Franchising and Licensing Asia (FLAsia) 2023 held from 17 to 19 September at Sands Expo and Convention Centre.
FT Consulting Senior Consultant and Regional Manager Robin Yeo also observed that Singapore has seen more education franchises recently.
Naidu said franchising is the “safest way” to bring Singapore’s education enterprises to other countries.
“Otherwise our schools would need to go in-country and open. There’s always another set of regulations that protect the educational system [in each country], so it’s better to leverage the franchisor’s experience in education, as well as maximise the local connections of the franchisees in-country,” she explained.
Franchising and Licensing Association of Singapore (FLA) President Dickson Low attributed the success of education enterprises in the franchising landscape to the country’s “very serious education system.”
“[Education] has become a foundation and a backbone of what we are. By using the Singapore story to talk about education in this industry, it will win a lot of trust when it goes to a certain country,” Low said.
Asiawide Franchise Consultants’ Founder and CEO Albert Kong echoed this sentiment, adding that it will be easier to convince franchisees to take on an education enterprise from Singapore since the country is well-known for it.
“However, the franchisor must always be alert to the changes to the local legal requirements – for instance, the Chinese government in July 2021 issued guiding principles on the regulation of supplementary K-12 classes which can impact the school’s operations significantly,” Kong added.
“Commonsensically, If we were to say that Singapore has the best spaghetti or the best burger, it’s not so credible, right? But when you say Singapore is quite good in education, it’s more credible,” Kong said. Some famous education franchise brands that have done well include MindChamps, Julia Gabriel and Lorna Whiston.
In terms of markets, Low said education enterprises from Singapore do “extremely well” in China.
“We are bilingual. We speak Mandarin, we speak English. When our people go there, we can provide English classes with the Chinese and also help foreigners who [want to] enter China to understand the Chinese culture right there,” Low explained.
Looking ahead, Yeo said education enterprises will continue to be popular amongst franchisees, citing the success of LCentral and Speech Academy which were amongst the exhibitors during the FLAsia 2023.
“As long as we have families with children, there will always be good demand for education businesses,” Yeo said.
Apart from education, Yeo and Naidu agree that another brewing hotspot amongst international franchisees in Singapore is health and fitness.
“Fitness brands like Spartans Boxing Club, Jal Yoga, these are all Singapore brands that have recently built their success on franchising,” Naidu said.
Success in Singapore
For entrepreneurs seeking to franchise in Singapore, Yeo said replicability, location, and localisation are the keys to success.
“If you are an F&B, for example, you need to be at least next to an MRT entrance or shopping centre. Even education [enterprise] must be somewhere that is accessible, Yeo said.
“You may need to pay higher rents, but higher rental prices for traffic is better,” he added.
Brotzeit German Restaurant and Beer Bar, which already has four branches in Singapore and has successfully expanded in other parts of Asia, said it also does localisation but ensures that the same brand is carried.
For example, since Asia is heavy on rice meals, they will bring in rice meals, but within the German-Austrian cuisine, said Gerhard Lanyi, Brotzeit’s senior consultant and regional manager.
Brotzeit was only one of over 100 local and international franchises from Australia, Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan, US, and Vietnam which attended the FLAsia 2023. The event also gathered over 40 experts in the field of franchising and licensing to help entrepreneurs seeking to expand their ventures in and out of Asia.
Meanwhile, Yeo underscored that entering franchising or licensing agreements in Singapore is also easier compared to other countries.
“We don’t have a specific set of franchise or licensing laws, unlike Indonesia and Malaysia, where you have to register to be a franchisor. This means that you have more freedom to do business [here],” he said.
Kong, for his part, said having a registrar, and requiring some sort of disclosure, would benefit the franchising ecosystem in Singapore.
Whilst there are no specific franchising laws in Singapore, Yeo underscored that the country has a very robust legal system that can protect the rights of franchisors and franchisees alike.
“Our commercial law and contract laws are already in place,” he said.
Low echoed this, adding that Singapore also has a good IP protocol.
Apart from a robust legal system, GoPizza’s Regional CEO and Head Kelvin Sia said what makes Singapore an attractive market for expansion is its stability and maturity.