The Rise of Franchising Industry in the Philippines

Businessmen who are in search of franchise opportunities in the Philippines have greater chances of succeeding than going bust. According to leading news website, Philstar.com, the domestic franchising industry grew by 17% from $9.4 billion in 2010 and $11 billion in sales in 2011.

Franchising in the Philippines poses lower risks than starting an entirely new business for franchisees and franchisors.  The Philippine government implements specific laws on franchising intended to protect both small-scale and large-scale entrepreneurs such as laws on trademark and intellectual property rights (Republic Act No. 8293, Section 147.1).

Franchising opportunities for small and medium enterprises (SMEs)

Depending on the amount of available capital, a potential franchisee can choose from a wide array of franchise opportunities in the country.  For SMEs, investing in a food cart business appears to be the most popular. Other popular ventures are beauty shops, water refilling stations and laundry/dry cleaning services.

The following statistics provided on the website of business website, Entrepreneur.com.ph, show how the sector significantly contributes to economic growth:

  • In 2010, franchise businesses in the Philippines accounted for US$9.45 billion, or 30% of total retail output in the country in the previous year.
  • More than 1.02 million jobs were generated by the franchise industry.
  • There were more than 125,000 outlets of 1,300 brands and concepts being offered. Fifteen years ago, when the concept of franchising was first introduced in the Philippines, there were only about 50 franchisors, 80% of which were foreign brands from the United States like McDonald’s and KFC.

Franchising tips

Many franchisors fail to make it in the market because they give up too soon on crises that are but just normal in running a business. Franchising can be a stellar idea in the early days, but just like venturing in any type of business, one can never get rid of the eventual downers. As such, seeking out franchising tips before venturing in the industry is imperative.

Here are some tips and practical guides to franchising based on articles published by news website, Philstar.com, and business website, 121 Business Consulting.com:

1.       Research. Going into business should not be rushed. Exploring multiple sources of information about a business idea or concept is imperative.

2.       Have a vision. It is very important for one to have a vision and a goal to achieve which will motivate you to succeed in business.

3.       Be hands on. Make sure to guide your staff on the day-to-day operations of the store. Oversee and ensure smooth running of the store. Manage all aspects of store operations in order to ensure maximum sales and profit.

4.       Invest in a proven franchise business. When choosing a franchise business, make sure that it is successful and committed to help and provide continuous support to its franchisees.

5.       Embrace the challenge. Creativity and patience are two important things in business.  If you do not have the patience, your business will ultimately fail. “It is a matter of investing time and effort in  planning and building a successful business. In order to succeed in business, one must be patient, smart-working and strategic,” Wu Fang Ling, General Manager of Eazy Shop (http://ph.shop.88db.com/eazyfashion), said.

Failures should also not hinder an entrepreneur’s passion to succeed. As Ms. Wu puts it: “the best way to be successful in a reselling/franchising business is to have the heart for your resellers/franchisees. Be honest, be patient, and stay reliable. Provide them with highly sale-able items and bring them the best service you can give. If you love your customers and partners, they will love you back in return. Show them that you value them and you’ll get back what you deserve. Like what we always say to our customers, “Let’s grow together.” It’s always better when you see them improve their lives too.”

Aside from patience, one must be able to draw ideas from different experiences to be successful in the business field. “When I was still working in a call center, I was looking for things to sell.  I knew that  most of my colleagues were interested in gadgets so I started getting gadgets from direct importers and sold them to my colleagues. And it sold like hotcakes! So my husband and I decided that we just concentrate on retailing. We then set up an online store,” Aina Tortor, owner of Ira’s Gadgets (http://www.irasgadgets.com/) said.  Ms. Tortor believes that the top three skills needed to be a successful entrepreneur are passion for the trade, desire to get rich, and acknowledging the presence of a higher being.

Related: How to Start a Franchise

Sources: