Johor Bahru Expansion for Singapore Cafés & Restaurants: Are You Ready?

So, you’ve mastered the Singapore F&B scene… Your restaurant has long queues, rave reviews, maybe even a few viral TikTok moments. Now you’re eyeing Johor Bahru, where rents are lower, crowds are hungry, and the SGD-RM exchange rate makes the investment sound really attractive. The hype around Johor and the Iskandar Region also once touted the place as the “Shenzhen of Malaysia”.

Our team at Red Sea Global has also recently expanded into the Johor region, seeing much potential in the city.

But before you start diving deep into launching your F&B brand in Johor, let’s be real: Expanding isn’t just about copying and pasting your Singapore model. You will definitely need a game plan and quality partners to bring your vision to life in a completely new environment.

Many Singaporean businesses are eyeing the vibrant, up-and-coming city of Johor now and it’s hard not to see why! Economic reasons aside, there’s a certain charm to the city across the border.

At Red Sea Global, priding ourselves as a quality integrated facility management provider in both markets, one of our goals it to help both your brainstorming and executional processes simpler. So here is a simple checklist to see if you’re truly ready for a Johor Bahru launch, some challenges to expect and how to make it work.

1. Is Your Singapore Business Actually Ready to Expand?

Here are a few things you can ask yourself to evaluate your current Singaporean F&B branch performance before taking the leap to Johor.

• "Do I have consistent demand in Singapore?"

  • If your Singapore outlet is packed daily and has a decent monthly revenue, that’s a green light.

  • If sales are shaky, ask yourself: "Is JB really the solution, or do I need to fix my home base first?"

• "Can I fund this without going broke?"

  • JB is cheaper, but setup costs (renovation, licenses, staff training) do add up. You’ll also have to factor in other unexpected costs as well.

  • Rule of thumb: It’s good to aim to have at least 6 months of runway for the new outlet, so it has some time to hit the ground running.

• "Do I have a team that can handle this?"

  • You’ll need at least one trusted manager who can commute or relocate, at least in the restaurant or cafe’s infancy stages.

Alternatively, you can also test demand first with a pop-up or attend some F&B events in JB before committing to a full outlet.

2. Why Johor Bahru? The numbers do look good from a data and economic standpoint.

So you’ve been wondering if you should start another branch in Johor Bahru, given its proximity to Singapore and growing interest in international investment. Let’s talk about the data, here are some key facts and figures that we’ve compiled to help provide some clarity.

The Upside:

• Growing Economy: JB’s GDP grew 6.7% in 2023, which is noted to be faster than Klang Valley.

• Strong SGD Advantage: RM3.50 to SGD1, which means you’ll experience lower labor, rent, and ingredient costs.

• Tourism Boom: 16.8 million visitors in 2023 (many are from Singapore!).

• F&B Demand: Cafés like % Arabica, Starbucks Reserve, and local brands are thriving.

However, even though things look really positive, you should also consider a few potential concerns:

• Competition is rising, you really have to be innovative and creative to differentiate your brand.

• Malaysian tastebuds may be slightly different from Singaporean consumers (for example, Malaysians seem to prefer sweeter drinks, spicier food).

• Licensing takes time (but it’s easier than you think, let’s dive into more on that later).
  
  

3. The Licensing Lowdown: a look into different local requirements before you start.

Yes, you do need certain permits to launch a F&B business in Johor. But here’s the good news, it’s not as bureaucratic or as complicated as you might have heard.

Key Licenses You’ll Need:

• Business Registration (SSM) – Like ACRA, but for Malaysia. As we have also learned, note that you’ll need at least one Malaysian business partner on the company incorporation documents, but do speak to one of many company secretarial companies who’ll be able to better advice you.

• Local Council License (MBJB/MPJBT) – This may depend on your location.

• Food Hygiene Certificate (from MOH) – Staff you hire at your premises may be required to take a short course.

How long will the whole process take? We usually like to be realistic, so this is based on our own experience in setting up RSG in Johor, and a whole ton of additional research.

• Fastest: 1-2 months (if documents are ready).

• Slowest: up to 6 months (if inspections or any of the application processes drag out).

We would definitely recommend working with trustworthy local partners and facilitators to speed things up. We’d also be happy to hear from you and explore any angles we could help with in bringing your store over smoothly to Johor.

4. Location, Location, Location.

So if you’ve decided to embark on this exciting new venture, the next key question is how to navigate the real estate challenges and which location should you consider to set up your F&B branch. We’ve done a fair bit of research ourselves, so here are a few hotspots to consider:

📍 Iskandar Puteri (Eco Botanic, Medini) – Upscale area which is quite expat-friendly.
📍 JB City Centre (Near CIQ) – High foot traffic in the city center area, but do expect a higher rental charge too!
📍 Mount Austin – Youth crowd, great for trendy cafés.

While rental might be quite attractive, you should aim to avoid super remote areas unless you’re delivery-only.

5. Potential issues and other considerations you may not have taken into account.

We’re advocates of proper project planning and management, so do factor in some budget and resources for potential issues that may come up. After all, you’re expanding to another country.

Take into account factors like:

• Renovation delays (JB contractors may not always always stick to timelines - but that’s why you have us! At Red Sea Global, we pride ourselves on quality, efficient services.).

• Monthly pest control (JB’s humidity levels attract certain pests such as roaches. Again, we’re here to help!).

• Kitchen exhaust cleaning (You stand a risk of incurring Bomba fines if neglected).

• Staff turnover (train locals well, as Singaporeans won’t commute daily and it’s more cost efficient to hire locally).

You can also assign trusted staff members of your Singaporean branch for a certain amount of time to help kickstart the Johor outlet too - it’s both a fantastic opportunity for your team to explore a new place and there’ll be less trust issues involved with sending people you know over during the crucial initial months.

You must also be prepared to adapt to different expectations from the Malaysian F&B market and be able to tweak your menu and service offerings to better suit the Johor crowd. Here are a few that came to mind:

• Pricing: Malaysians expect lower prices (but driving volume to your outlet makes up for it).

• Portions: Bigger = better for local crowds.

• Flavors: Adjust sweetness/spice levels. Be open to feedback and engage with your customers to constantly improve.

In conclusion, we do believe in the potential of Johor and think it’s a fantastic place to expand your business to. If you’re doing well in Singapore, done all your research and are ready to take on an exciting new challenge, we’re here for you!

At Red Sea Global, we help Singapore F&B brands:

• Renovate and set up your branch well, bringing your vision to life.

• Navigate services that you might require like pest control and air con setup / maintenance.

• Keep your facility clean, well maintained and up to industry standards. This is also crucial for customer satisfaction.

Reach out to us today, we’d love to hear from you.