The VOICE of Philippine Franchising

6 reasons why you shouldn't miss Asia's Biggest Franchise Event!

2011-08-03T20:45:00.010+08:00

Renowned international franchise leaders will gather here in SMX Convention Center, Manila on September 21-22, 2011 for Franchise Asia 2011 International Conference. Hear them share the secrets to the making of successful brands: Jollibee Foods Corporation, 7-Eleven, Krispy Kreme Doughnut, and Mang Inasal. Surely, this is one very good reason not to miss FRANCHISE ASIA 2011!

Mr. Tony Tan Caktiong, Chairman & CEO of Jollibee Foods Corporation, a visionary, World Entrepreneur of the year 2004 by the Ernst and Young and included in Forbes Asia 2011 list of Philippines’ Top 40 Richest Filipinos will share how Jollibee Foods Corporation was able to come up and realize Visions after Visions that served as gateway for them across the globe.

Mr. Chris Tanco, Senior Vice President and Head of International for 7-Eleven Inc., currently leads 7-Eleven’s Global Team and oversees international licensing and global expansion will be revealing the secrets of the world's largest convenience retailer which led them to almost every corner of every city in the world.

On the other hand, Mr. Edgar "Injap" Sia II, the Founder and Vice Chair of the phenomenal Mang Inasal, one of the fastest rising food companies in the Philippines, which also has become the modern icon of the Ilonggo culinary culture will share their plans and next moves as they head to the next chapter in their success.

And finally, Mr. Jeff Welch, currently the Senior Vice President and President for International of Krispy Kreme Doughnut, with his long experience in global franchising will be presenting how a simple product, the Krispy Kreme Doughnut, has captured the heart of Asia-Pacific market, making it the doughnut of choice for every Filipino!

Exciting? There are more! Visit www.FranchiseAsia2011.com.ph for more information.

Asia's Biggest Franchising Event is in Manila! Be part of it!

2011-07-29T18:08:00.002+08:00

After a decade, Asia’s biggest franchising event is back in Manila! FRANCHISE ASIA 2011 is an honor realized after the Philippine Franchise Association (PFA) won the bid to host the annual international franchise twin meetings of the World Franchise Council (WFC) and the Asia Pacific Franchise Confederation (APFC) in Manila to be held on 19-25 September 2011. This 4-in-1 event will highlight the following activities:

the twin meetings of the World Franchise Council (WFC) and the Asia Pacific Franchise Confederation (APFC), which gather franchising leaders from 43 countries (September 19-22);
the International Franchise Conference (Franchise Asia 2011 Conference), which will feature high-caliber speakers and experts who will present franchising updates and opportunities across the globe, and Concurrent Breakout Sessions, which will present a variety of relevant and stimulating franchise tracks for new and emerging franchises; established franchises and mature franchise (September 22-23);
the International Franchise Expo (Franchise Asia 2011 Expo), a one-stop shop for the best business opportunities ranging from established and successful brands to new and promising franchise concepts – in food, retail and service – both homegrown and international (September 23-25);
Franchise Seminars for aspiring entrepreneurs on the hunt for a franchise investment and for business owners who want to franchise their business (September 23-25)

With its theme “Asia to the World ● The World to Asia”, FRANCHISE ASIA 2011 aims to provide the platform to showcase to the world the best Philippine franchise brands & concepts as well as provide a gateway for international brands to enter the 650 million ASEAN market, thus strengthen the Philippines’ position as the “Franchise Hub of Asia”.

Be part of this once in a decade international franchise event here in Manila!

Visit to www.FranchiseAsia2011.com.ph now!

Only in FRANCHISE ASIA 2011! Know the formula on making a successful brand from Jollibee's MR. TONY TANCAKTIONG

2011-07-21T14:22:00.000+08:00

International Franchise Association Chairman Jack Earle joins Franchise Asia 2011

2011-07-16T11:36:00.000+08:00

Jack Earle, Chairman of the International Franchise Association is set to come to Manila, Philippine on September for the biggest 4-1 franchising event, the Franchise Asia 2011.

He heads Earle Enterprises, LP and is a franchisee of McDonald’s restaurants in Southeastern Pennsylvania and Southern New Jersey. He joined the system in 1983 and has served in a variety of leadership positions during his franchising career, which spans more than two decades. Earle served as chairman of IFA’s Franchisee Forum.

Currently he chairs the National Restaurant Building and Equipment Standards Team and is a board member of the McDonald’s Political Action Committee. Additionally, Earle is an Executive Committee member of the company’s Regional Leadership Council for the Philadelphia Region. In past years, he served as secretary-treasurer, partners brands chairman for the National Leadership Council, as well as vice president of the region’s advertising cooperative.

Earle has also been treasurer and member of the Philadelphia Ronald McDonald House board of directors. Prior to joining McDonald’s, he was vice president, national lending division head of Fidelity Bank in Philadelphia.

Meet the international who’s who in franchising and be part of the biggest 4-1 franchising event, the Franchise Asia 2011. Register now at www.franchiseasia2011.com.ph

POS System Now More Affordable to SMEs Thru PLDT Checkout

2011-05-11T18:34:00.001+08:00

Every entrepreneur knows that technology is important to grow ones business because it can help level the playing field. But because of perceived cost concerns, investing in technology is almost always the least of his priorities – especially for start-ups and small businessmen.

For this reason, PLDT SME Nation is always coming up with products and services to help SMEs get an edge in the highly competitive world of business by increasing profits and maximizing efficiency while minimizing costs with products and services suited for their purposes. Recently, in another effort to make business easier for the small businessman, PLDT SME Nation launched PLDT Checkout, a web-based point-of-sales (POS) system that aims to revolutionize how SMEs are doing their sales and inventory.

“PLDT Checkout allows businesses to have an automated process of accepting and recording sales transactions,” said Ms. Kat Luna-Abelarde, PLDT SME Nation Head. “It also lets them monitor inventory levels and gives them real-time access to sales analytics.”

Among the benefits of PLDT Checkout are the following:

· Real time sales information – The system does away the tedious task of polling. No matter how many stores you have, you can access sales numbers, customer information, inventory and other s anytime.

· Off-site access – You don’t have to be in-store to be in charge of everything. As long as you have internet connection, whether you are visiting a trade show, meeting with potential partners, or in vacation, you can still be aware of what’s happening in your store.

· Improved inventory control – PLDT Checkout allows you to manage your inventory more efficiently, thus eliminating potentials to order too little or too much.

· Low cost and low maintenance – With most POS systems, you pay for the package, hardware and software, which usually cost a lot of money. But with PLDT Checkout, you get a monthly subscription of only P2,750, which includes software updates, maintenance and technical support.

· Improved sales – the system gives you access to customer information, which can give you valuable insight on a customer’s preferences and purchase history, which, in turn, can give you the opportunity to provide excellent customer service, which will make them keep coming back to your store.

These and other reasons make PLDT Checkout the small businessman’s new partner in growing his business.

So to all entrepreneurs out there, why don’t you check out PLDT Checkout.

Know the RIGHT Way in Franchising!!! moved to May 20, 2011

2011-05-06T18:57:00.000+08:00

Giving back to others through Franchising

2011-04-19T02:24:00.000+08:00

Dr. Ed Escalona is a surgeon and a medical professor. He is also a businessman. But before all these, this husband and father of four is first and foremost a Christian businessman, whose primary obsession is to bring God to the marketplace.

It is said that one cannot serve both God and money, but for Doc Ed, as he is fondly called, there is really no conflict as long as one puts God first. He admits, however, that money was the primary reason why he studied medicine. He wanted to be rich. He also wanted to be in control.

Being a doctor and s surgeon - where most often somebody’s life lies in his hands - gave him the false feeling that he is indeed in control. That is until things turned out differently from what he expected or wanted. “It made me realize the limits to my humanity,” he remarked.

With this realization, Doc Ed decided to join the Brotherhood of Christian Businessman and Professionals (BCBP) in 1992 where he learned to ‘turn over the driver seat’ to God. It was also during this time when he acquired a Julie’s Bakeshop franchise. Already a recognized brand then, Julie’s was the favored choice of Doc Ed primarily because of its marketing and advertising advantage. He likewise cited the comprehensive support given by the franchisor in terms of financial, technical, educational, logistic and operations as an added benefit.

This time, however, his consideration was not just money, but also the opportunity to give back to his community.

Since then Doc Ed was able to build an empire of 15 Julie’s Bakeshop outlets spread all over Bohol, his adopted hometown. His outlets have been consistently reaping nominations and awards from the management, as well as recognitions given by various government and private organizations, for exemplary contributions to the community. The pinnacle of these recognitions was being named Franchisee of the Year in Franchise Excellence Awards (FEA) 2008.

Doc Ed has three things to say to prospective franchisees. First, he said that it is important for a franchisee to have his hands busy and his mind focused, as he reminded that a franchisee is a businessman and not an investor. It is essential, he added, that one puts both his heart and mind into the business, not simply be there for financial gain. Lastly, Doc Ed says that a franchisee should accept the fact that he is not in control - that the franchisor is above him and God above the franchisor.

He also has this reminder to all businessmen. “One thing I am sure of is that in the end, during my hour of reckoning, my creator will not ask me how many branches I have opened and operated, or how many thousands of pesos I earned, or how many cars or properties I have acquired in the process. Rather, he will ask me, was I able to love and give hope and made significance in the lives of others? I hope and pray that I can confidently answer Him with a big YES!”

"2007 Franchisee of the Year" Shares His Secret to Success

2011-04-14T16:55:00.000+08:00

Franchising is all about duplicating a successful business. This means when one gets a franchise, you don’t have to start from scratch. No more groping in the dark. No need for the trial-and-error phase associated with most start-ups. All that the franchisee has to do is to follow the manual provided by the franchisor. If he does this, the franchisee is assured of a very high success rate – about 80 to 90%.

It was this high success rate that attracted Mr. Vinzent Thel Querol to franchising. At that time, he had already been into pawnshop and rice retailing businesses for years, but seeing that franchising could be a promising addition to his enterprises, the seasoned businessman set his sight on getting a 7-Eleven franchise.

He chose 7-Eleven because it is a global brand and is, in fact, the global icon of convenience. Upon closer scrutiny, Vinzent was also pleasantly surprised that 7-Eleven offered an operations program that will keep him ahead of the competition. In May 2004, Vinzent opened his first 7-Eleven store in Fields Avenue, Angeles City, Pampanga.

Pretty soon, Vinzent was able to open 3 more stores – in Bulacan, Quezon City and another one in Angeles City. And the amazing thing is these stores were opened using earnings from shops already in operation.

And the secret to Vinzent’s success… a close working relationship with the franchisor. After all, the franchisor knows what’s best for the business. And the success of the business is a shared interest and goal for both franchisor and franchisee. It is no wonder then that franchising is often compared to a marriage. And to cement and institutionalize this franchisor-franchisee relationship, he co-pioneered the formation of 7-Eleven’s Franchise Council, the first council of its kind outside the U.S.

Because of this close working relationship, Vinzent’s stores are ace performers, which make him a frequent awardee of the company’s sales and service excellence awards. The opportunity to give back to society, however, is what he sees as his greatest reward. Tucked under his belt are various programs such as sidewalk-clearing cooperation with local government units, hiring working students as company scholars, and the Plastic on Demand Project aimed at lessening the use of plastic bags.

Lastly, having franchise also comes with a bonus. Vinzent admits that franchising has introduced him to other ways of operating a business through the company’s best practices, which he adapted to his other businesses. Now, his other entrepreneurial endeavors are also doing very well… thanks to franchising.

Retiree Starts ‘Economic Advocacy’ with 7-Eleven Franchise

2011-04-13T14:59:00.000+08:00

Let’s not kid ourselves. Retirement is nirvana for us working the daily grind. And I bet this includes Mike Bolos, who came home looking forward to a well-deserved rest in his hometown in Guagua, Pampanga after 25 years working as a finance executive in Saudi Arabia.

But when he noticed that little has changed in his hometown since the time he left, he quickly took off his retirement loafers and put on his working shoes again – this time as an investor.

Mike’s insightful mind saw that Guagua’s lack of development stemmed from lack of investment pouring into his beloved hometown.“There was nothing wrong with Guagua, the money is there. Someone just had to jumpstart the economic environment by investing in the town.” It turns out that this first-class town of 120,000 has a considerably high purchasing power because most residents have family members working abroad, who are regularly sending money home.

And so Mike, with his savings and a loan from a local bank, decided to build a four-storey commercial center to prime the pump, so to speak. After all, wasn’t it said that if you build, they will come. And come they did.

Now Mike’s field of dreams houses a modern dental clinic, a spa, a dance studio and an internet café. Not content with simply providing a venue for businesses, Mike also went ahead and invested in his own 7-Eleven franchise. The familiar logo of the world-class convenience store now serves as a beacon of economic growth for the community.

He says the decision to acquire a 7-Eleven franchise was a deliberate move to push his economic advocacy forward. “With a world-class brand now in the center of town, other entrepreneurs will be inspired and will recognize the economic potential of the town.”

True enough, new businesses are sprouting all around the area and old shops are giving their stores a more modern make-over. Furthermore, the local government set up a PUV terminal a few meters away from the store to service commuters traveling between Guagua and the neighboring towns and provinces.

Because of its 24-hour operations, the store became a convergence point for the townspeople where quality products and services can be availed especially at night, aside from providing travelers a safe place to take time out before heading home.

Another benefit of getting a 7-Eleven franchise is that almost everything involved in the operation of the business is provided by Philippine Seven Corporation. “This means that I don’t have to re-invent the business, and no longer have to risk losing my capital through trial and error,” Mike shared.

He also revealed another phase of his economic advocacy, wherein he will attempt to convince other OFW friends to pool their resources together to acquire 7-Eleven franchises of their own.

As he continues with his personal advocacy, Mike is putting his retirement temporarily on hold. But he is enjoying every moment of it.

Start-up franchise business made easy by “Ka-Negosyo Franchising Loan"

2011-04-12T17:21:00.000+08:00

Ever wonder how it feels like being your own boss?

Wonder no more! BPI Family Savings Bank (BFSB) in partnership with the Philippine Franchise Association (PFA) and another franchise organization brings you “Ka-Negosyo Franchising Loan”, a special facility for Filipinos who want to venture into franchising.

This first ever franchising loan in the market, introduces the “lite mode” in which clients pay interest on the first six months and start paying for the principal payment on the seventh month. With loan amounts starting at P500,000, clients can easily start and sustain a business. This loan makes start-up business easy for entrepreneurs as its freed up cash flows can be allotted for the other starting-up costs.

For more information and on how to get a business loan, call 754-NEGO, email kanegosyo@bpi.com.ph, text 0917-852NEGO or 0922-869NEGO, or visit any BPI or BPI Family Savings Bank branch nationwide or www.bpiloans.com.

Franchising, a good reason to go back to the PHL

2011-04-11T14:28:00.000+08:00

Overseas Filipinos miss the comforts of home, and bear the sacrifice of being a stranger in a foreign land and living away from their loved ones all for the sake of providing a better life for their families. This is the same story of Carol Rivera.

Carol had been working for over ten years as a saleslady for Corona Supply Company when, realizing that she was not earning enough, she decided to go to Hong Kong to work as a domestic helper.

“I came to Hong Kong in May 1992. It was difficult for a mother like me to leave behind my children who were still very young then. My eldest was in grade two; the second, also a girl, was in grade one. My son was still a baby then, just over a year old.”

It was a tough decision for her to make, but out of sheer desire to give her family a better life and provide for a good education for her kids, Carol went ahead and left for Hong Kong. “For countless nights I cried myself to sleep because I missed my family. I endured the loneliness, the grueling work, the difficulty of mingling with people from other cultures just so my children would not have to go through the same hardships I went through for lack of money.” While Carol was away, it was her husband who looked after the kids, grateful that he had been a very good father to them.

Carol strived in Hong Kong, even taking on extra work from friends of her British employer, to earn more money and save enough in the hope of starting a business so she could go back to the country and be with her family.

Contemplating what business she would go into, Carol had her sights set on franchising. With no experience in running a business, she said she was confident that franchising was the one for her. “I knew then that franchising was better because I knew I would get the support I needed from the franchisor. A business with a proven track record was another advantage for me,” she added.

And so in March 2002, while Carol was in the country for a vacation, she and her husband opened their first franchise – Crystal Clear Water Store – in Bagong Silang, Caloocan City. “I remember, it was only a single motorcycle that my husband used for delivery. Our son, who was only 12 then, would ride with his father, holding the five-gallon Crystal Clear container in his arms to deliver to the customers. They toiled with that kind of system until we were able to grow the business and bought a van and two tricycles for the deliveries.”

“Just a year after opening our store, my husband asked me to come back home to the country for good since our franchise was doing very well, the profits even exceeding my earnings in Hong Kong.”

Carol added that the returns they made from Crystal Clear also helped her pay off the property in Cavite that she bought while working abroad. Moreover, she was able to expand the business and opened her second Crystal Clear franchise. “I opened my second franchise in Cavite and it is now managed by my eldest daughter who is a Medical Technology graduate.”

Blessings to the Riveras continue to abound as they have acquired another property in Fairview, Quezon City. Carol said that plans to open a third Crystal Clear franchise is also in the works. “I’ll ask my second daughter to manage this one. She finished B.S. Psychology and is taking her Master’s while working. My son is in his last year at San Beda where he’s taking B.S. International Business and Entrepreneurial Management, with plans of attending law school later.”

Carol is thankful that she chose to invest her hard-earned money in a franchise. Recognizing the immense help she got from following the established system that the franchised business provided her, she also credits her success to hard work, determination and faith in God.

“I have kept my faith in God, trusting Him to guide me everyday. With all the blessings He has showered on me and my family, I never failed to thank Him. Crystal Clear made it possible for me to be reunited with my family and give them a much comfortable life. For this, I will forever be thankful.”

The Woman Behind a Successful Franchise Brand-PR Gaz Haus

2011-04-08T01:20:00.000+08:00

Siu Ping Par, the Chief Operating Officer of the subsidiary company of PR Gaz Franchising Corporation, says that “successful women entrepreneurs can be found in every country and under all circumstances.” A member of the Philippine Franchise Association (PFA) Board, she cites that women of today have the equal opportunity to make a difference in the business community and in society unlike decades ago when they had to fight for the right to self-determination.”

Describing herself as foremost a wife and a mother, Par keeps a very simple and straightforward business philosophy. “My father has taught me that hard work, perseverance and discipline are the key in achieving success. Careful, efficient and long-term planning and strategizing are important, too.”

According to Par, who also sits on the Board of the PR Gaz Haus Group of Companies, a good management style should not be grounded on skills alone. “One must have the heart and passion for running a business,” she states. “The challenges and demands of being an entrepreneur can be multi-dimensional, and women, because of the various roles we play in society—daughter, wife, mother, sister, teacher, or friend—are uniquely equipped for this.”

Thus, when faced with challenges Par reveals that she not only draws support from her team. “I also get an overflowing dose of inspiration and encouragement from family and close friends.” Married to Nelson Par and a mother of four, Par gives priority to family life. “Pages of my office note planner bear important school dates of my children, family events or functions, to ensure that I don’t miss out on anything. Likewise, technology has made the job for busy moms like me a lot easier. I am always a phone call away.”

“On weekends, we go on short, out-of-town trips because the change of scenery is sure to charge up one’s spent ‘batteries’. Watching movies with my husband and kids is a great stress-buster, too,” Par confides. “And to keep fit, I attend a bootcamp class once a week and I play badminton as often as I can.“

Par recounts that she was a full hands-on manager during the initial stages of their family business. That was in 2001 when the company she helped grew with her husband set up refilling plants in Metro Manila, Cavite and Zambales. A year later, the company began putting up its own retail outlets, called PR Gaz Haus—the first LPG convenience store in the country. “But now, we have a different organizational set up and I am able to focus on the bigger, more important requirements of my division.”

A Certified Franchise Executive (CFE) graduate of the Institute of Certified Franchise Executives (run by the US-based International Franchise Association), Par narrates how she and her husband got into franchising in 2004. “We needed a proven way to extend our reach and franchising provided us the means to do this. So, we tried to learn as much as we could about the concept and we found out that many popular brands employed franchising to grow their business. We also attended franchise shows like the Philippine International Franchise Conference and Expo (PIFCE) to get more information. In 2005, our first franchised store opened in Cavite. Less than two years after, we had a total of 34 franchises in our chain.”

Par attributes the growth of their franchising business to having the right program, people and processes. “You must constantly employ innovations in business and update yourself with developments in the industry. It is also a good move to link up with peers in the franchising sector and tap the benefits of being in a franchising association such as the PFA.”

She adds that it is vital for franchisors to be always connected with franchisees. “We hold conference with our various franchisees to update them on company developments and to discuss concerns. We also have good relations with our franchisees even on an individual level. We consider our franchisees as active partners in growing the business.”

To date, PR Gaz Haus has over a hundred outlets operating in Luzon. This figure is expected to grow by at least 60 more stores before yearend. “This is part of our company’s “500-in-5” vision, in which we aim to set up 500 stores by 2015,” Par says.

Know the RIGHT WAY in Franchising!

2011-04-06T12:30:00.000+08:00

TEN BIG Reasons Why A Franchise is a Better Investment*

2011-04-05T17:08:00.000+08:00

*”Ten Big Reasons Why A Franchise is A Better Investment” is an excerpt from “A Guide to Franchising in the Philippines” by the Philippine Franchise Association (PFA). The book was created to provide essential information in franchising being the most innovative business growth strategy that has since achieved world-class status. Aside from explaining franchising in the context of the Filipino experience, this book features 15 Filipino franchise experiences by remarkable individuals who boldly took on the franchising challenge and succeeded.

One: Business 101

Even if you earned your college degree in something as unrelated to business as Afghan Literature, you may still be qualified to become a franchisee. For most franchisors, the franchisee need not have previous experience in business or in the product or service sold by the franchise company. Franchisors will teach you everything you need to know about running the store. A franchise training program will usually cover areas of marketing, accounting, finance, government relations, and probably even the rudiments of production management. If you skipped classes during those training days, on-the-job experience will take care of business training for you. Managing a franchise is a crash course in running a business.

Two: Your Own Boss

If you invest in a franchise, even if it is a business selling food items from a small cart with a total sales force of one employee, being a franchisee will earn you the title of President or CEO of your company. Putting your money in real estate or in any other financial instrument, no matter how large an amount you invest, will not give you the title of CEO. More importantly, as CEO of your company, you are responsible for the overall direction and well being of your business. Although you comply with the standards of quality and service set by the franchisor, essentially, you are your own boss.

Three: Instant Customers

With an established franchise name and trademark, a franchise business is guaranteed patronage of its products or services from customers who already know the brand. A startup business will have to spend time and money in advertising, promotions, and customer goodwill for its new name to be recognized, yet with a franchise, all you need is to set up the business, open it, and people will start coming. They are already familiar with your product, your service, your price, and the ambiance of your franchise before they even enter your establishment.

Four: Re-saleability of the Franchise

What if your green card was approved and you had to pack your bags and migrate to the US? A typical franchise agreement will allow you to sell your franchise to another franchisee or even to the franchisor himself. A franchise business can usually be resold based on the strength of the brand. If you were running your own startup business bearing your own name, reselling that business will be comparably more difficult. Which will you be more confident to buy or sell—Juan’s Chicken House or Jollibee?

Five: Business Consultants at Your Disposal

Part of the commitment of the franchisors to you as franchisee is to provide you assistance in marketing, finance, sales, accounting, and inventory management. The franchisor’s personnel are business consultants at your disposal, usually minus the exorbitant hourly fees.

Six: Proven Business System

If you were to put up your own business from scratch, you may end up spending many hours trying to perfect your business system. Questions like, “How long should I cook the hamburger? Which supplier offers the best terms? Is my brother-in-law qualified to do my bookkeeping, having spent three semesters mastering Basic Accounting? Sometimes, the money wasted from trial and error is enough to run your startup business.

A franchise normally offers a standardized, tested, well-thought out set of rules and procedures which help ensure the accurate and efficient operations of your business. These are all detailed in the franchisor’s operations manual. Virtually a franchise takes away all the guesswork in running a business and provides franchisees a doable, successful, and teachable system which you can adopt and work on.

Seven: Pooled National Advertising and Marketing Program

The success of a franchise business relies heavily on name recognition. This entails making products or services a household name. A franchise system requires franchisees to pool funds for national advertising and public relations purposes. Franchisees contribute a small percentage of their sales to a marketing and advertising fund which the franchisor uses for print/radio/TV/billboard advertising, promotional materials, point of sales, and other similar collaterals needed to promote the brand and increase the overall sales performance of each franchise unit. A pooled advertising program allows franchisees to get the most from their advertising budget.

Eight: Active Investment

A franchise is not a passive investment. Franchisors typically require their franchisees to be involved in running the business on a day-to-day basis. Unlike real estate and time deposits, franchising allows you to work on your investment to earn more. While real estate is dependent on market value, your earnings in a franchise depend on the efforts you put into your business including sales, marketing, and promotion.

Nine: Purchasing Power

Collective purchasing power is one of the best advantages of buying into a franchise. Everything in the business—from equipment to inventory—can be purchased by the franchisee from the franchisor or their approved suppliers at group discount, somewhat like a wholesaler’s price.

In fact, for franchisees involved in a product business, collective purchasing reduces their cost of goods by 10 to 20% and affords those savings that often exceed the royalty fees they pay. For service franchises, collective purchasing allows franchisees to get better and cheaper equipment that can help them do their business the less expensive, faster, and better way.

Ten: More Chances for Success, Less Risks of Failure

As an investment alternative, franchising is less risky and potentially more rewarding than many other investments. Franchising has a proven success rate of 90%.

In recent years, Filipino entrepreneurs have learned that rather than start their own business from scratch with a failure rate of 75% in a five-year period, it is better to invest in a franchise, where he reduces risk of failure to 10%.

A franchise also enjoys a better, if not higher profitability, compared to stocks or your own business startup because the business revolves around a successful and proven track record, sales and operations, which will not likely fail.

Owning a franchise also allows you to enjoy the product of your franchised business. There are many people who invested in a franchise so they can have hot oil treatment in the privacy of their own salon, or have a restaurant they can hold their parties in. Your stock market or T-bill investment cannot say as much.

Frequently Asked Questions in Franchising

2011-04-02T20:20:00.000+08:00

1. How is franchising as a business?

Franchising is a business method that makes things easier for the entrepreneur and minimizes his risks.

A new entrepreneur, for example, can start a business with lesser risk and lesser capital if he gets a franchise. A franchise comes with an operating manual that serves as a blueprint to success for the franchisee. Aside from this, a franchisee gets support from his franchisor in terms of training, marketing and etc. Furthermore, since he will invest on a brand that has already been on the market for quite some time, he won’t have a hard time breaking into the market compared with starting a business on his own.

For a franchisor, franchising allows his to expand his business faster and easier through the resources and network of the franchisee.

In the Philippines, how popular is franchising for business owners to venture on it as a way to expand their business?

Back in the 80s, there were probably only about 50 franchises in the country. Most of these were large businesses. In the mid-90s, at the time PFA was founded, there were only about 100 franchises; and most were still large companies. Seeing that franchising can be a powerful tool for economic development, the PFA promoted franchising to businessmen and entrepreneurs as a means to expand ones business. Today there are about 1000 franchises creating about 100,000 businesses, with a good mix of large, medium, small and even micro enterprises.

2. How’s the Philippine franchise industry doing today? Is it affected by the ensuing global economic downturn?

The Philippine franchising sector continues to grow despite the global financial slowdown. In fact, many franchise companies are still pushing through with their expansion program despite the times.

To fully grasp the reason why franchising continues to grow despite the bad economy, we should revisit the meaning of franchising.

Franchising is replicating a successful business. A successful business means it excels in all areas – branding, products, systematization and most importantly, business ethics. All these will make a business tide through any storm. And all these make it an ideal business investment.

That is why, when the economy goes south, a franchise can still afford to expand because it will continue to attract franchisees. These are people who have either lost their jobs or can’t find a good job. There are also those who have realized that going into business is the best way to invest their hard-earned money.

Furthermore, the global economic downturn offers a valuable lesson for all of us – that is, we must learn to reorient our investment priorities.

The global financial meltdown happened because investors put priority on hifalutin, get rich quick schemes, when money should rather be channeled to endeavors that create enterprises and generate employment. I hope that banks will now prioritize lending to brick and mortar businesses – especially franchises, which has a high success rate.

3. What do you think are the pros and cons of franchising?

The advantages and disadvantages of franchising stems from the unique feature of franchising, which puts prime concern on the partnership between the franchisor and the franchisee.

The franchisor-franchisee relationship is an evolving relationship which starts as a sort of parent-child relationship and which culminates to a bond comparable to that of marriage.

It is important, therefore, for both parties to play their part. A franchisor must guide, mentor and take care of its franchisee, especially during the early years. Similarly, the franchisee must allow itself to be guided by its franchisor. He cannot just implement his own plans but rather follow the rules laid down by his franchisor.

For this reason, perhaps, franchising can be quite constricting and limiting for some individuals.

4. Would you know how many franchise industry players—both foreign- and Filipino-owned—in the country today?

According to a study commissioned by the PFA, there are about 680 Filipino franchises and 320 foreign concepts in the country today.

The Philippine Franchise Association (PFA) is an internationally recognized association of franchisors. It is the voluntary self-regulating governing body for franchising in the country and is the country’s pioneer and largest franchise association with members ranging from micro to large – homegrown and international – involved in food, retail, service and other types of business.

PFA members – numbering presently at 196 – are bound by the Fair Franchising Standards (FFS). By adhering to this Code of Ethics, the PFA members commit themselves to respect and to apply fair set of provisions in the conduct of the sale of their franchises.

5. As a self-regulating body for franchising in the country, how do you help professionalize and standardize the Philippine franchise sector?
Fra
PFA members are bound by the Fair Franchising Standards (FFS). By adhering to this Code of Ethics, the PFA members commit themselves to respect and to apply fair set of provisions in the conduct of the sale of their franchises.

The Global Financial Crisis: How and Why Franchising can Help

2011-04-01T17:43:00.000+08:00

by Samie Lim, CFE

The world economy in turmoil

Things are getting worse for the Philippine economy. This is what anyone can surmise if you look at the GDP growths forecasts from various groups. Early in the year we got low but encouraging forecasts averaging 2.7%. The latest forecast by Fitch Ratings, though, pegs the country’s GDP growth at 0.5%.

The OFW remittance, the economy’s knight in shining armor, on the other hand, is already showing chinks in its armor with the global economic crisis still cutting down jobs relentlessly. And since remittances contribute more than 10% to the GDP and sustain many Filipinos since OFWs support their extended families as well, the effects of the global financial crisis can be quite staggering.
There is no denying that the world economy is in turmoil and the Philippines is not immune to it. The earlier we accept it the better for us so that we can act accordingly and move forward.

Why this happened?

But before we move on, it is also good to know why the world economy took a nosedive. The complexities of the modern economy compel many pundits to simplify things by pointing to greed as the culprit; but to clarify and simplify things even more, it is because our economic system it encourages and rewards greed instead of hard work and innovation.

If the system promotes greed, then investments will always go to high yielding yet high-risk schemes, which are not really sustainable. Money is poured on a piece of paper that promises big returns rather than on brick and mortar businesses that open opportunities to many. How can you make money by lending more to people who cannot pay their debt? But this was what US banks did which resulted into the subprime mortgage crisis and eventually led to the global financial meltdown.

Time to get real

What we need, therefore, is a reorientation of investment priorities. And this means investing or funding concrete businesses that produce real goods and employ real people. It’s time to get real, folks!

Of course, going into business during difficult times goes against common sense. When the economy goes south, instinct will tell you to hold on to your money and wait things out. But that is only because instinct’s main task is survival, which may not be enough in today’s cutthroat business environment. What a businessman needs to do is not just to survive but to triumph. To survive means finishing a marathon; to triumph means winning the race.

Franchising will help you win the race because it is recession resistant. In fact, an economic downturn might even help franchising.

The franchise advantage

How? In these times of downsizing and layoffs, many people with management experience are looking for new careers. These are the perfect candidates for franchisees that can make a franchise grow.

Using the time, resources and network of the franchisee, the franchisor can expand his business. The franchisee, in turn, is given a means of livelihood. It is basically a win-win situation.

That is why the government is encouraging entrepreneurship in this time of crisis. The drawback here is that not everyone is cut out to be an entrepreneur. But being a franchisee is not strictly being an entrepreneur. It is more of being a manager, which is what he was before getting retrenched. But this time, he is his own boss. It’s basically being an entrepreneur without the major headaches.

Kick-starting the economy via franchising

Franchising can help create thousands of businesses and millions of jobs. It already has despite limited support from government and financing sectors. Imagine what it can do if it is given the environment where it can reach its full potentials.

Malaysia, with its franchise-friendly policy, is using franchising as an instrument for SME development and to broaden its middle class (bumiputra). A strong middle, after all, helps in the stability of the nation. Malaysia is also seen as an attractive destination for foreign investors because of this policy.

Now this is where the government can really help. If the government is encouraging entrepreneurship to fight the crisis, it should put its money where its mouth is. We do not need a stimulus package here; just the wise implementation of present laws.

The Magna Carta for MSMEs provides that banks should allocate 2% and 8% of its loan portfolio to micro and small and medium enterprises respectively. If I may put forward a proposition, I would like to see banks allot part of this 10% portfolio for a window dedicated to franchise financing. This can help the Philippines get out of the woods quicker than the rest.

This can be done

Understandably, banks may be hesitant to let go of their cash after being burned with the crisis. Let me say, however, that franchising is worth investing.

This already happened in the US during the 1950s when many companies started franchising, many of which became well-loved global brands like 7-Eleven, Burger King, Holiday Inn, Dunkin Donuts, McDonald’s, Wendy’s and many others. But what made the franchising boom were the returning GIs, who used their GI loans to invest on a franchise. From only 100 franchise companies in 1950, these grew to more than 900 franchise companies producing 200,000 businesses by the end of the decade. This was the time when the US became the global leader in the world economy. In the latest survey, franchising in the US is producing more than 900,000 businesses, generating more than 11,000,000 jobs.

In the ASEAN region, the Philippines leads in the number of franchise concepts and outlets. We have what it takes to bring the country to unprecedented growth. All we need is a little push.

The possibilities

There are about 1,000 franchise concepts creating about 100,000 outlets and generating about 1,000,000 jobs in the country today – and there is still much room for us to grow. We must remember that we are strategically placed as the gateway to Asia. Coupled with our natural flair for the service industry, we have what it takes to become the franchise hub of Asia, serving the 600 million ASEAN market – and even the 1.6 billion and 1.8 billion South Asian and East Asian markets, respectively.

Back in the 50s up to the early 70s, the Philippines led its neighbors in virtually every aspect – agriculture, aquaculture, education, infrastructure and even the economy. All of these have slipped from our hands, except in the area of franchising… for now.

The future is in our hands.