Franchise sector still on high growth path
Consultancy, Inc. founder Rudolf Kotik (CDN PHOTO/TONEE DESPOJO)
The Philippine franchising sector is expected to continue growing at double-digit rate as much of the market for possible franchisees remains untapped, a consultant said.
“Filipinos have the capability and an entrepreneurial drive that can help them succeed in franchising. Every year, we have more franchisees,” RK Franchise
Consultancy, Inc. founder Rudolf Kotik said during the recently concluded Cebu Franchise Expo.
He estimated that 10,000 franchises were sold nationwide in 2014. On average, this increases by 10 to 20 percent yearly, Kotik said.
This year, franchises in the Philippines are expected to show similar increases, with 60 percent of franchises being in the food industry, followed by the vanity and health industries.
“Filipinos have been getting more and more educated about franchising. They now know they can get a stable stream of income from it, and that they can do it,” he said.
However, some Filipinos still have several misconceptions about the industry, which dissuade them from entering the lucrative market.
“Sometimes they don’t understand that these also have rules and regulations, that you have to undergo training. Some people expect they can buy a franchise and just collect money. You have to be hands on. That, and there’s also a procurement program that they do not expect,” he said.
Another dissuading factor is the cost of franchises in the Philippines, which range from P250,000 to P15 million.
“The cost is another thing. You have to have that kind of money. But once you have it, and you can do loans, or tap financial institutions, you’re good to go,” he said.
On average, 95 percent of Filipino franchisees are guaranteed to succeed, given proper training and information about how to deal with a franchise business, Kotik added.
He encouraged more people to go into franchising, saying there is an untapped market for foreign businesses in the Philippines.
For companies going into franchise, the only hindrances are in integrating and properly developing franchise systems into their companies.
This means making sure that operation manuals, training programs, and procurement rules and regulations should be securely in place before accepting franchisees.
Around 70 companies from all over the Philippines participated in the 17th Cebu Franchise Expo, which ended yesterday.
Exhibitors included 2Go, 7eleven, Azalea Hotels and Residences, Julie’s Bakeshop, Metrobank, Metrodog, Mindanao Pearl Center, Penong’s Franchise Corp., Red Planet Hotel Cebu Corp., SLT Cafe/ A La Mode, and Ystilo.
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