Franchising Industry In The PhilippinesThe franchising industry in the Philippines has been on a steady rise during the past years, as seen in the number of outlets that seem to open like mushrooms everywhere. The presence of foreign franchises is what triggered the emergence of home brewed franchise. This way, Filipino entrepreneurs are motivated to come up with their franchise businesses and to ensure growth and sustainability. Franchise businesses comes in different sizes, be it a store covering an entire lot (plus the parking space and drive through section), or a small booth found inside malls. The Philippine Franchising industry has been in existence for over 95 years, which originally was known as product distributorship (introduced by Singer Sewing Machine in 1910). Business companies have since embraced the idea of distributing products and services as their means of expanding their business. 15 years later, another form of franchising, known as business format, was introduced through the opening of A&W root beer outlets. The Franchising industry soon grew as more companies decided to adapt the same concept. It is interesting to note that until the mid 1990s, the franchising industry was applied on food items only. It was later that the concept of franchising was eventually applied to services and other non-food products.
The Philippine government has given full recognition and threw its full support to the continuously growing franchising industry in the country for its huge contribution in boosting the economy. This sudden boom actually paved way for the emergence of micro, small and medium enterprises (MSME), which are businesses that operate with low capitalization requirements. MSME encouraged aspiring entrepreneurs to pursue their dreams of owning their own businesses. The franchising industry gave businessmen a better chance of success in their ventures because of the fact that a franchise already has an established name and a better system. This in effect lessens the chance of failure in business operation, plus the opportunity to expand and therefore, more future growth. The franchising industry is governed by the Philippine Franchise Association (PFA), a body composed of member franchise holders. It aims at promoting the growth of franchises in the Philippines by providing guidelines, policies, assistance, training and expositions, and other beneficial aid to its members. To date, the PFA has a listing of 61 food related franchise companies and 64 non-food franchise companies. Member companies are either locally formed, or are holders of foreign brand names. With the benefits brought about by the franchising industry, it is expected to continue its rising trend, and more new franchise are expected to come out over the next coming years. It's no wonder when the time comes that the Philippines would be proclaimed and recognized as the Asia hub for franchising. |