Francorp - The Franchising Leader in the Philippines
Francorp - The Franchising Leader in the Philippines

Franchise Hotline : (+632) 638.3149 to 50

Archive for October, 2014

Is your business ready to franchise?

Posted on: October 20th, 2014 by Francorp No Comments

By Manuel “Noel” Siggaoat Jr., CFE, MBA

Managing Director, Francorp Philippines

Franchising has made many brands household names, making their founders rich and famous beyond their imagination.

Every week, I meet with entrepreneurs who want to be the next franchise tycoon. They want their business to grow from one to one thousand, from few to many, like Tony Tan Caktiong of Jollibee fame or Benjamin Liuson of the The Generics Pharmacy phenomenon. Unfortunately, not every business can be a franchise. Some are not yet ready and need to work on their concepts before they can become franchisable.

How do you know if your business is ready for franchising? To guide would-be franchisors, I use the following criteria to help entrepreneurs assess the franchisability of their concept:

Differentiation – Is your business unique? Are you offering something different, or are there others already selling the same thing?

Differentiation does not always stem from your product or service as being entirely new. You can be selling the same product or service like the others but differentiated in the sense that your product is better tasting, or has higher quality, or is priced lower, or is delivered more conveniently.

Also, there is the so called Unique Selling Proposition (USP). Are you bringing something of value to the customer? This is not only applicable to franchising but to businesses in general. The best businesses are those whose value proposition to customers is better than any of their competitors.

Continuing value – Can your franchisee do without you in the long run, or will they continue to need you even after they know how to operate the business? If you are able to provide continuing value to your franchisees, then they will continue to depend on you and stay within the system until the end of the franchise agreement.

The easiest way to do this is to be the sole source of proprietary goods and services. Proprietary goods and services are those associated with your intellectual property and are only available from you. Recipes are an example of proprietary items. Franchisors keep recipes and secret ingredients confidential so that they continue to be the sole source of proprietary items. Branded merchandise sold in retail stores are also a good way to provide continuing value through proprietary items. Some franchisors provide continuing value by delivering support unmatched by others in the industry.

Operating prototype – Do you have an operating prototype of the business you want to franchise? Franchising is basically duplicating success stories. If there is no original, there is nothing to duplicate. If you have a successful operating prototype, you can start to think of franchising that business.

Affordability – How much capital will a franchisee need in order to put up a replica of your store? If the required investment is high, the less people will be able to afford your franchise. The smaller the initial investment, the higher your business rates in terms of affordability.

Return on Investment – Are your stores profitable? Since a franchise is an investment, investors would like to know when that investment will pay back. People usually look at return on investment compared to its affordability. Even if a franchise is affordable in terms of initial investment, the return of investment has to be attractive.

Credibility – Does your brand generate confidence among customers or with potential franchisees? One of the reasons why people buy franchises is because the brand is recognizable enough to generate instant customers from Day 1. If customers are not aware of the brand, then the entrepreneur may be better off starting his own business using his own brand name. Some companies achieve credibility through the strength of their organization.

Adaptability – Can your store locate in areas and markets away from your own? Will your business still be relevant in other markets with different tastes, cultures, and conventions? McDonald’s India, though it does not serve Big Macs, is able to cater to the non-beef eating Indians by serving the Maharaja Mac which comes in either chicken or lamb. Can your business thrive in markets different from its origins while still retaining its character?

Teachability – For most franchises, no experience is required of franchisee- applicants. If that’s the case, how long will it take you to teach someone with no background in your business how to operate and manage it? If it will take several months before a franchisee can learn your business, then your business will score low on teachability. The shorter the training time, the higher your teachability score.

Capital – Do you have capital to invest in the development of a franchise program? Although franchising is a low-cost means of expansion, it is not a no-cost means of expansion. You have to spend money to make money. Investment in a franchise program will go to developing a strategic business plan, franchise agreement, operations manual, franchise marketing plan, and a franchise sales plan. These can be done in-house or with the help of professionals.

At some point in your franchise preparation, you may need to beef up your capacity by expanding your commissary or warehouse. You may need to stockpile inventory in anticipation of increased demand, or to take advantage of volume discounts. You may need to add vehicles and equipment to augment your logistics capability.

Long-term commitment – Franchise agreements can last for several years. Do you have the commitment to perform your obligations as franchisor for the long term? It’s easy enough to play the role of franchisor when sales are good. Can you show the same commitment during the downturns in your business when sales are low and franchisees are complaining?

Do you need to score high on all these criteria to be franchisable? Not necessarily. Some concepts score low on a few factors but earn high points on others. The business needs to be looked at holistically. The bottom line is that the franchise program must result in a win-win-win scenario for the franchisor, the franchisee, and the customer.

Business Readiness for the ASEAN Economic Community

Posted on: October 17th, 2014 by Francorp No Comments

Article by Sam Christopher T. Lim

With the ASEAN Economic Community (AEC) integration coming soon in 2015, many business owners are now looking at how to prepare for the arrival of more foreign competitors into the Philippine market. Franchising can help you prepare by solving 3 critical issues:

  1. BUILD YOUR BRANDWith hundreds of foreign brands entering the market, branding and marketing are no longer just the logo and tagline you have. Branding is what you say and do at every touch point that your customer interacts with you. Whether it’s your advertising, how your store looks, how your staff speaks, or even the emails and newsletters you send, every element needs to be aligned to your brand.
    Franchising can help by re-evaluating and documenting your key brand elements to ensure that the total experience is properly replicated by franchisees. In addition, having multiple franchises allows your brand to gain higher awareness and protect you from the new brands that are coming in.
  2. UPGRADE AND MAKE YOUR SYSTEMS AS EFFICIENT AS YOU CANWorld class competitors bring world class systems. Hence, you need to step up your operations to be competitive with your competitors. Local franchise brands such as Magic Melt from Cebu have invested ISO-certified facilities and HACCP certifications to ensure that their products and processes can compete with the best in the market. Also, by upgrading your systems to a franchiseable level and documenting every step in your process, working with international franchise developers can help you gain years of international level operations knowledge in a short time, perfect to prepare you for the AEC 2015.
  3. LOOK BEYOND THE PHILIPPINESThe AEC is an opportunity for every Filipino business to look beyond the 100 M customers in the Philippines to the over 600 M customers across Southeast Asia (SEA). Businesses should look beyond defending their customers in the Philippines, but aggressively pursuing growth strategies in other SEA markets. Franchising is a lower risk entry strategy in foreign markets given the advantage of using the money, time, and organization of local partners who know the market. It allows for a faster growth option than doing it alone and allows you to maximise the AEC integration by entering multiple markets at the same time.The AEC brings many challenges and opportunities for your business. Franchising is one strategy that can help you prepare by solving these 3 critical issues and ensuring that the AEC brings exponential growth to local brands and businesses.

Francorp News Bite: Francorp visits Metro Cebu for the Mandaue Franchise Expo and Seminar

Posted on: October 17th, 2014 by Francorp 1 Comment

Top franchise developer Francorp Philippines was present in the Mandaue Franchise Expo and Seminar last August 28 to 29, 2014, where aspiring entrepreneurs and business owners from all over the Visayan region came to learn, network, and hopefully take a step closer towards being the next big thing in business! During the two-day franchise exhibit, Francorp held a special version of its ‘How to Franchise Your Business Seminar’, the seminar that has served as the first step for many businesses that eventually grew through franchising. In accord with the event’s Free Women Project, Francorp CEO Bing Limjoco delivered a specialized version of Francorp’sHow to Franchise Your Business Seminar that gave focus on the role of women in business and in entrepreneurship. There was also an additional spotlight given on the rise of Metro Cebu as an up-and-coming hotbed of high-potential franchise concepts.

Francorp News Bite: Francorp Philippines Concludes Another Successful Franchise Seminar

Posted on: October 17th, 2014 by Francorp No Comments

Francorp Philippines, the country’s number one franchise developer, recently conducted another successful seminar entitled “How to Franchise Your Business” at the Francorp Franchise Academy, Unit 2807. 28/F, Jollibee Plaza, OrtigasCenter in Pasig. 21 participants from 11 different companies all attended the exclusive seminar that has served as the gateway through which many of Francorp’s clients have gone through and eventually reached great franchise success. The seminar included such topics as understanding the nature of franchising as a business model, knowing whether or not your business is franchiseable, and the latest and most up-to-date trends in the franchising industry in the Philippines and the ASEAN region.

FRUIT MAGIC

Posted on: October 10th, 2014 by Francorp No Comments
Fruit Magic Francorp Franchise Consulting Philippines

Fruit Magic Franchise developed by Francorp Franchise Consulting Philippines

One big mall turned into a fruit paradise as the first ever Fruit Magic store opened there in 1999. It was a big hit since no other fruit juice store allowed their customer to pick their favorite fruits from the basket and blend them, the way Fruit Magic did. In 1999, the Hernandez and Escalona families shifted to healthy living and changed to an all-natural healthy diet, free from preservatives and chemicals. It was difficult since only colas and artificial juice drinks flooded the market back then. To make these healthy juices available, the two families took over RPM Fruit Magic and recreated the store into what is now known as Fruit Magic. Two additional stores followed – the Glorietta and Landmark branches. Dr. Alan Escalona, a doctor and businessman, elevated Fruit Magic from a simple fruit juicing service to a mainstream fresh fruit juice brand. As a testimony to their success, company-owned outlets were slowly and strategically positioned in NCR and Cebu.

To expand further, Fruit Magic decided to work with Francorp Franchise Consultants to create a franchise business that can accelrate growth. The Fruit Magic Franchise Corporation was launched in January 2005 to respond to requests from clients and prospective business partners. Being loyal advocates of the 5-a-day serving of colorful fruits and vegetables program espoused by the World Health Organization (WHO), Fruit Magic guarantees only the freshest, healthiest, and the best fruit juices available in its 60 stores throughout the country. With the health consciousness craze, Fruit Magic’s s FruzionSmoothies, Pure Nectar product line, soy milk, and all-day beverages and shakes keep the crowds coming back.

MONT ALBO SPA

Posted on: October 7th, 2014 by Francorp No Comments

Dr.Nol Montalbo started a distinctive massage business inspired by the centuries old “hilot” tradition. Naming it as MONT ALBO MASSAGE HUT, this is the first ever Filipino-inspired spa with “hilot” as the main offering. With native interiors and quality “hilot” services, MONT ALBO was able to carve a niche that is now a multimillion spa enterprise with global ambitions.

To have a firm foundation for his venture, Dr.Montalbo spent 6 months working with franchise development consultants of Francorp Philippines to upgrade, simplify, and document his system so that he can easily train franchisees to run his business. The core of the franchise is a simple, well documented franchise operations manual that anyone can follow and operate.

Dr.Montalbo gives his two-cents worth: “Since 2010, we had our ups and downs, failures, and successes.But in the middle of it all, as franchisors, we should know how to build and value relationships, not just with franchisees but with everyone around you. Create lasting relationships with sincerity and pure, clean intentions. There will never be a perfect franchise concept, believe me. Your decisions may not be precise and you can miss your target. But when you do franchising with intensity and passion, there’s no way to go but up.” In the years Mont Albo has been franchising, Dr. Nol continues to inspire people to franchise your business and create your own franchise success strories.

MAX’S FRIED CHICKEN

Posted on: October 7th, 2014 by Francorp No Comments

Generations of Filipinos have loved Max’s fried chicken and swear by the goodness of its unique “sarap to the bones” (delicious to the bones) taste. Devoted Max’s fried chicken diners do not only return to savour the delicious menu offerings, families love going back to Max’s because of the wholesome and homey ambiance. The secret recipe of the fried chicken is the concoction of Ruby Sanvictores, whose uncle MaximoGimenez opened up a cafe in their house circa 1945 to cater to the American troops stationed in Quezon City after the war. The G.I.’s came back for the chicken, steak, and drinks and soon, even the locals became loyal patrons.

Many Filipino food favourites have been added to the Max’s restaurant menu since then. Patronage grew and the result is now 140 branches in the Philippines and 15 in locations all throughout the globe, including U.S. and Canada.

Because of the high premium that Max’s puts on close family ties and the Filipino value called “samahan” (sense of belongingness), all franchisees are treated as family. The franchise support is a total-solutions-package so that franchisees are guided in successfully planning, developing, and implementing their own restaurant franchise.

Robert F. Trota, president of Max’s Restaurant, is a strong advocate of franchising, being the incumbent chairman of the Philippine Franchise Association (PFA). He was behind Max’s double digit growth in 2011 and has also been credited for being a major force behind the milestones of PFA. He has actively campaigned for the institution of various PFA programs resulting in the expansion of Filipino business concepts within and outside the Philippines.

To learn more about how to franchise your business both in the Philippines and internationally, attend a How to Franchise Your Business Seminar or take a free franchisability quiz.