Franchisees told: Innovate to cope with competition

Philippine Franchise Association (PFA) chairman emeritus Samie Lim (left) and president Alan Escalona stress that a franchisee must have money, time and be hands-on to succeed. (CDN PHOTO/MARITES VILLAMOR-ILANO)

The franchising industry may continue to thrive in bad times or even when the policy landscape is uncertain in an election year, but franchisees should not be complacent.

Officials of the Philippine Franchise Association (PFA) said having a reputable brand or being in business for several years doesn’t guarantee the success of a franchise concept.

The success of a franchise lies with the franchisee, PFA president Alan Escalona said in a press conference at the sidelines of the Franchise Visayas 2016 over the weekend.

“What is very important nowadays is innovation. (There should be) continuing study on how to improve the brand and keep it interesting compared to the competition,” Escalona said.

“Our studies show it’s not enough to have a reputable brand, or several branches. It doesn’t matter whether you’ve been in the business long. What’s important is how you deal with the changing times,” he added.

Escalona said a franchisee must not only have the funds to start and run the business, but must also devote time for the business and must be hands-on to ensure that the business succeeds. He or she must also be aggressive and compliant to the franchising guidelines.

The Philippine franchising industry was worth more than $11 billion as of 2012. It has about 1,500 franchisors with 134,000 franchised outlets and 1.2 million employees, said PFA chairman emeritus Samie Lim.

He said the Philippines is already recognized as the franchise development hub of Asia, a goal that the PFA set a few years back, as indicated by the number of international brands that will be featured during the Franchise Asia Philippines 2016 on July 20-24 exhibit at the SMX Convention Center in Manila.

The exhibit, which is the biggest in Asia, will feature about 600 brands, including about 50 international companies that are looking for master franchisees in the Philippines.

“The fact that there are more than 500 people coming here to exhibit shows that they really recognize us now as the franchise hub of Asia,” Lim said.

He said Korea is sending a delegation who will look for a mall where they can bring in around 30 Korean food franchises.

“They’re no longer selling a single franchise, but a pool of 30 franchises,” he added.

Escalona, who is also president and chief executive officer (CEO) of Fruit Magic and CEO of Quicklean Franchise Solutions, Inc., said the franchise industry usually expands by 10 percent to 12 percent yearly.

“For me, I’ve never seen a slowdown in the franchise industry even in bad times or during elections. Maybe, for those businesses whose operations will be affected if policies change, investments might be deferred in an election year. But the industry does well in both good and bad times,” he said.

A regular part of Franchise Asia, the innovation booth, will also be featured this year to help brands that want to test the market in Metro Manila.

“PFA intends to mentor or guide start-ups which are afraid to venture to bigger cities,” Escalona said.

More than 20 Cebuano brands have already gone national, with some even going international. Among those with national presence are Penshoppe,

Bo’s Coffee, Islands Souvenirs, Dimsum Break, Golden Cowrie, Dessert Factory, Tablea, Magic Melt, La Vie Parisienne, and Body and Sole.