Buying a Franchise in Malaysia: Interview Franchisees Before You Decide

Before buying a franchise, speaking to outlet owners can reveal things that do not appear in a sales presentation. However, one good or bad experience is not proof that the brand as a whole is right for you. In Malaysia’s franchise market, reference interviews are most useful when you choose a varied group of respondents, ask consistent questions and check their answers against documents. The aim is not to seek praise, but to understand the realities behind your buying decision.

1. Choose respondents, not just testimonials

Ask the franchisor to introduce you to several franchisees with different operating backgrounds. If you are introduced only to the most successful outlet owners, those conversations may not reflect a new buyer’s experience. Suggest a mix of owners who have recently started, those who have been operating for some time and those running outlets in locations similar to your target area.

Also distinguish between franchisor-owned and franchisee-owned outlets. A manager at a company-owned outlet may understand customers and day-to-day routines, but does not necessarily bear the same financial commitments or contractual responsibilities as a franchisee.

Use three filters when choosing respondents:

• Similar locations: shopping centres, residential areas and rows of shop units have different customer patterns.
• Similar formats: a kiosk cannot be compared directly with large premises offering seating.
• Similar levels of owner involvement: an owner working full-time in the business has a different experience from an investor who leaves management to employees.

Where possible, seek the views of former franchisees, with their consent. Do not assume that an outlet closure necessarily proves the brand has failed; the reasons may relate to the location, personal circumstances or the owner’s decisions. Ask about the context before drawing conclusions.

2. Ask questions that draw out real examples

Arrange a time in advance and avoid disrupting operations during busy periods. Explain that you are assessing a potential purchase, not conducting an audit. Ask permission before taking notes or recording, and respect respondents’ right not to share confidential information.

Start with open-ended questions, then ask for examples. “Are you satisfied?” usually produces a brief answer. By contrast, “What do you wish you had known before signing the agreement?” is more likely to reveal gaps between expectations and experience.

Use the same core questions for every respondent:

• Which of your initial assumptions proved inaccurate after opening the outlet?
• What was the hardest part of moving from prospective buyer to owner?
• What were the key differences between the package as described and your experience of putting it into practice?
• What qualities do you think an owner needs to suit this model?
• If you were buying again today, what would you check more carefully?

For each important answer, ask when the event took place, which outlet format was involved and whether the situation is still ongoing. Experiences from several years ago may not reflect the current package.

Do not make disclosure of the owner’s profits a condition of the conversation. If a respondent is willing to share figures, make sure their meaning is clear: sales are not profit, and a cash surplus may not account for the owner’s salary. Do not use unverified figures as the sole basis for your buying decision.

3. Separate experience, opinion and evidence

After each interview, organise your notes into three categories: first-hand experiences, the respondent’s opinions and information that still needs verifying. For example, “my opening was delayed” is an experience; “all openings will inevitably be late” is a conclusion that requires further evidence.

Create a simple table with columns for the issue, the respondent’s answer, the outlet’s context and follow-up action. If several respondents mention the same problem, investigate its cause. Were they using an older format, operating in similar areas or going through a system change at the same time?

Also ask whether the respondent will receive a referral reward if you buy. A reward does not necessarily invalidate their views, but knowing about that relationship helps you assess potential bias in their answers.

Raise discrepancies with the franchisor neutrally, without revealing respondents’ identities unless you have their permission. Set out the specific issue and ask for a written explanation. An answer you can verify is more useful than a general denial or verbal assurance.

4. Check your findings against the documents before deciding

Malaysia has specific rules under the Franchise Act 1998, as amended, including the 2020 amendments. Franchisee interviews are an additional due diligence step; they do not replace the protections and documents required by law.

Section 15 requires the franchisor to provide the prospective franchisee with the disclosure document and a copy of the franchise agreement at least 10 days before the agreement is signed. Use this review period to compare what you have heard with the terms actually being offered to you. Do not assume that a long-standing franchisee’s experience automatically translates into an entitlement under your new contract.

Mark each finding as verified, requiring clarification or not yet verifiable. Where material discrepancies affect your buying decision, ask a lawyer to assess the relevant documents and explanations before you make a commitment.

Practical next step: choose a varied group of respondents, ask consistent questions and record anything that remains unclear. Choose a brand based on a verifiable pattern of experiences, not the single most persuasive testimonial.