Franchise Business In The Philippines
Franchising is arguably the hottest business buzzword in the Philippines. Proof of this is the proliferation of foreign and local brands franchise options ranging from food cart, water refilling, convenience store, fast food restaurant to ink refilling businesses. Franchising allows the business owner (franchisee) to operate the business using a proven system or model that works, giving him the edge over the competitors who still has to discover for themselves what methods would work and what wouldn't. The franchisee also uses a recognized brand or business name that has a strong recall.
Some of the pioneering franchise businesses that have successfully penetrated the Philippine market are the American fast food restaurant chains Mc Donald's, Wendy's, Burger King, Pizza Hut and Kentucky Fried Chicken which are ubiquitous in all major cities all over the country, sometimes located in close proximity to each other. The thriving of the call center industry in the Philippines, in which employees work at the graveyard shift, opens an opportunity for 24-hour convenience stores like 7-Eleven and Ministop. In the Philippines, the biggest number of franchise outlets belongs to the food business as the Filipinos really love eating out. The big shopping malls are a hub of the most number of food carts selling various snacks, cocktail foods and refreshments, like French fries, sandwiches, ice creams, fruit shakes, pizza, waffles, donuts, dimsum, siopao and many others. Locally owned franchises dominate the food cart business. Some of the prominent names are: Potato King, Potato Cuddler, Rice-in-a-box, Sonyda, Pinoy Waffle, Waffle Time, Popoy's Grill, and Pinoy Pao. A food cart business requires a small start-up capital ranging from Php 30,000 (around $ 673) to Php 300,000 (around $ 6729). Another popular franchise business concept in the Philippines is ink refilling. Due to economic reasons, people may opt to refill rather than buy new cartridges to cutback on ink costs. For just a minimum franchise package fee of Php 35,000 one can start an ink refilling station. Franchise package usually includes ink refilling kiosk, extensive training of personnel, refilling tools, initial supplies and marketing materials. Return on investment is 3 to 6 months depending on location. Ink Man, Ink-all-you-can and Ink for Less are some of the companies which offer franchises to interested individuals. Due to the emergence of lots of successful franchise businesses, a myth has arises that franchising is a sure-fire formula for success. Truth is: just like any other business operations, it may have its own share of failures. In franchising, success is never guaranteed but the chance of failure can be much smaller. While a great number of franchise businesses attain financial success, some of them encountered major challenges which threaten the stability of the partnership and the business as a whole. Problems arise when the franchisee has an idea or point of view that clashes with the business system and he decides to follow his system rather than the agreed-upon franchise system. In franchise systems, there is little room for independent decisions and innovation. The franchise agreement cannot be disregarded and should be followed all the time. Unrealized expectations also wreak havoc to the business partnership of the franchisor and franchisee. The situation is even aggravated when they failed to communicate their predicaments with one another. Failure to properly adjust to demands of the business may also mean disaster as the standard of service to customers may suffer. Customers may be very intolerant of businesses that do not meet their expectations. |