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

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Archive for August, 2015

 FRANCORP CLIENTS LAUNCH DIVERSE CONCEPTS

Posted on: August 25th, 2015 by Francorp No Comments

By  Ma. Alegria S. Limjoco

CEO, Francorp

The franchise industry is poised for another exciting year as more and more retail, food, and service concepts begin their expansion.

Through the years, Francorp was witness to the birth and success of its clients’ brands that chose the franchising route to growth.  Some of them have already reached IPO status.

This year, the market will enjoy the offerings of these new breed of franchisors. We are proud of how the franchising industry continues to flourish with the rise and triumph of world class Pinoy brands. We would like to see these fresh brands make a name for themselves abroad in due time.

FOOD:

FaBurrito

FaBurrito offers an array of Mexican dishes such as burritos, tacos, salsas, all healthy fare with no greasy aftertaste. They guarantee only the finest freshest ingredients prepared daily with no MSG and no artificial sugar. The iced tea is unique. The service is above reproach. Christian music fills the venue. Truly,  good food enjoyed in the right atmosphere.

Chefs and Bakers

Your baking needs and more can be supplied by a Chefs and Bakers outlet.  This is a wholesale / retail specialty store carrying local and imported baking products for professionals and baking enthusiasts alike.

Roy’s Bistro

Based in Cagayan de Oro City, it offers budget meals from breakfast to dinner. They live up to their motto of “Good Food, Tastes Good” because of the rave reviews they have been receiving so far.

Caffe La Tea

A  Cabanatuan City, Nueva Ecija, brand known for its quality coffees and teas, signature dishes, and desserts. This business was founded by 4 friends in their desire to create a lively place for family and friends to gather and chitchat over delicious food and beverages.

Caffé La Tea also offers complimentary Wi-Fi connection, allowing customers to make the most out of high-speed internet, for leisure, study or work. These thoughtful details make Caffé La Tea a homey retreat, a place where people find “Zen and Happiness in One Cup!”

 

LC Big Mak

Established in 1984 – years before foreign fast food giants made it to the shores of the country. L.C. Big Mak started to provide their community in Lucena City, Quezon province, with a taste of the American hamburger – albeit suited to Pinoy taste buds. With 12 branches nationwide, the brand is growing stronger.  The couple behind the brand is Francis and Edna Dy who are now opening up for franchising to bring their LC (Lucena City) Big Mak burgers to different parts of the Philippines.

Mr. Potato

The premium fries of Mr. Potato quickly captured the tastebuds of the Cebuanos and those from neighboring provinces as well as from Cagayan de Oro City, Dumaguete City ,  Hilongos in Leyte, and from Bohol. It is now becoming a household name because of its quality fries. Launched on June 21, 2014, MR. POTATO is bent on bringing Cebu’s flavored-fries to the entire archipelago and the world. Its quality potato fries are imported from Belgium. MR. POTATO also takes pride in being an affiliate of M. Lhullier Group of Companies, one of the reputable companies in the country today that continues to provide quality products and unparalleled services to the Filipinos. Through franchising, MR. POTATO is bent on bringing Cebu’s flavored-fries to the entire archipelago and the world!

Sans Rival

True to its name, the cakes and pastries of Sans Rival of Dumaguete City really have no rival when it comes to quality and taste. Starting out in the lot of the Sagarbarria home, the store is now a local icon, with tourists and locals frequenting the area for nice ”pasalubong” items.  Their to-die-for sans rival cake and silvanas pastries are now complemented by other mouth watering menu offerings.

Eduardo’s

This restaurant has been an Antipolo food destination for the longest time! If you are looking for a homey feeling when having lunch or dinner with your family, Eduardo’s is the place to be! Capiz windows give the warm ambiance.  Steaks and grilled specialties beckon the foodie.

RETAIL:

Sitsirya

A kiosk of Sitsirya offers the best and quality pasalubong treats for loved ones, guests, and are also perfect for gift giving.  They carry the best products from various provinces which use their store as a distribution outlet thus their slogan – Food specialties of the islands to the world. Desserts, chicharon, coco sugar, native delicacies, bottled specialties from different parts of the Philippines are in every Sitsirya outlet for everyone to enjoy at reasonable prices.

 

 

 

HuBB Builders Center

This is the first modern community hardware store in the country which sells topnotch building materials, including cements and specialty products at the best price. Backed up the Holcim name, a symbol of quality, it is operated by a subsidiary – the HuBB Stores and Services Inc. With 21 outlets, at present, franchisees are now invited to own a HuBB Builders Center in their locality.

Paperstone

Not just any quality stationery or paper product is in a Paperstone.  The different artful designs are one of a kind making customers come back for more. Whether for scribbling school notes, work notes, drawing art, writing for fun, and most of all gift giving, Papersone products deliver. Enjoy the ancillary products like writing implements, scrapbooking materials, mugs, bags, greeting cards, knick knacks, gift boxes, and desk equipment.

SERVICE:

The Good Barber

Opened in 2012, The Good Barber brings back good old traditional barber shop experience that is characterized by warm, cozy, retro music filled atmosphere. Its services offerings do not hurt the pocket.  To add to its wonderful haircut, massage, and pampering services, there are promo discounts every Tuesdays, Wednesdays and Thursdays for facials and other hair treatment services.

Mathemagis

Mathemagis is an after school Maths enrichment  program for kids 4 to 12 years old based on the internationally acclaimed and proven mathematics curriculum of Singapore. The program focuses on developing problem-solving skills thorough conceptual understanding of math principles, visualization using bar models and a well articulated sequence of topics for preschool up to the primary grades. It is one of the schools aggressive in franchising.

Beauty and Beyond

Known for its facials and non-invasive slimming services, Beauty and Beyond is another homegrown Cebu brand ready to flex its wings via franchising. Its products for head to toe beauty are reasonably within the reach of ordinary men and women who want a new lease on their beauty regimen.

Beauty and Beyond Skin Clinic has highly trained staff to cater to all skin and body care needs. It caters to everyone who would like to enhance their natural beauty and look Beyond Beautiful.

360⁰ Fitness Club

360⁰ Fitness Club focus ison exercises that simulate natural movements and work out muscle groups; exercises that prepare the body for daily movements that will lead to strength, leanness, and functional fitness. The core program is compact so that members can complete the circuit in just 30 minutes. Preferring the non-traditional, 360⁰ Fitness Clubconstantly reinvents exercises to help members develop healthy lifestyles.  It is now in key cities of the country. With franchising, it wants to reach Asian markets.

Yoga Plus Express

The founders of Yoga Plus aim to promote yoga as a fitness activity for anyone regardless of gender, age, weight and level of flexibility. Yoga+ is to be their first step on their journey to achieve balance in mind, body, and spirit. Under the guidance of certified instructors who will focus on students’ individual needs, participants can discover more about themselves and push past their limitations. There are now 4 branches of Yoga Plus Express.

Explorations Pre-School

Explorations Pre-School is a progressive preschool that employs the Bank Street or Developmental-Interaction Approachespoused by the Bank Street College of Education in New York City. It utilizes quality educational materials and hands-on experiences that support and develop the child’s unique interests and multiple intelligences. Such a system considers the child’s development level. For optimal learning, children are made to actively interact with people and materials in their environment and reflect upon these. There is an interaction between thinking and feeling – giving attention to teaching skills and knowledge and attitude. On top of ensuring a child’s holistic development and an abiding respect for each child’s unique qualities, the school has harnessed parents in becoming their partners who recognize commitment to excellence.

Paras Alter Station

Paras Alter Station has been the service provider for repair and alteration of all types of garments and apparel  for 7 years already. Its branches are strategically located within malls all over Metro Manila.  As it plans to put up more outlets in the Visayas and Mindanao, it is opening its doors to franchising. Their fast expansion is largely due to clamor from clients who have experienced the best service from their competent staff who give their best quality workmanship, and therefore, value for money for the customer.

Lifecare

Lifecare is a new addition to the retirement and senior care industry in the Philippines that is based right in the heart of Cebu. Lifecare espouses independent living and assisted living for the elderly. It duplicates a home setting where everything is sufficiently provided for. The ultimate goal is to help the elderly live life easier, safer, and more enjoyable. With professionally trained staff, Lifecare is after every resident’s well being 24 hours a day.

Most of these businesses are proudly run by women. Women entrepreneurship being my advocacy, the Franchising Regional Enterprises by Women (FREE) Project of the Philippine Franchise Association (PFA) continues. These free seminars for women entrepreneurs have gone the rounds of different regions. We have been to Tagaytay, Davao, Cebu, Manila, Cagayan de Oro and we have slated 6 seminars every year. Many have partnered with us regarding this such as the Bank of the Philippine Islands, the Department of Trade and Industry, and the Department of Science and Technology. The International Labor Organization (ILO) has recognized its importance in women empowerment.

Franchisor Concern: Will My Franchisee Compete With Me?

Posted on: August 15th, 2015 by Francorp No Comments

By Manuel V. Siggaoat, CFE

Managing Director, Francorp

As a consultant, I talk to several people a week who are thinking about expanding their business through franchising. For sure, there are many advantages if done correctly. After all, franchising has already helped many companies grow. However, one of the most common fears would-be franchisors have is whether or not they are just teaching franchisees the business know-how that will eventually be used to compete with them.

“What if I train my franchisee and he uses that knowledge to put up his own business and compete with me? Am I digging my own grave with franchising?”

This is a valid concern. To be honest, I have seen cases where this has happened. I have seen franchisees, disgruntled and disillusioned with their franchise investment, put up a competing business and go head-to-head with their franchisor.

However, this is something that is preventable. Here are some safety nets to discourage franchisees from turning against their franchisor.

 

1. Include a Non-Compete clause in the Franchise Agreement

A Franchise Agreement should include non-compete provisions within the contract. Basically, this provision states that the franchisee should not put up or invest in a business that competes with the franchisor’s business. The franchisee is bound from doing so (a) while the franchise agreement is in effect, and (b) some years after the franchise agreement has expired.

 

While including a non-compete provision will help, it is not enough. I will not go into details but there are several ways a franchisee can circumvent this provision. So in other words, a non-compete clause is a necessary but insufficient provision – it should be found in a franchise agreement, but by itself will not prevent franchisees from competing with a franchisor.

Besides, non-competition provisions are not in effect forever. They expire a few years after the end of the agreement.

 

2. Give Continuing Value

A better way to keep franchisees from competing with a franchisor is by providing continuing value. This means that aside from use of the name, the franchisee benefits from products and services that the franchisor provides during the course of the business.

 

2.1 Proprietary Products

Not teaching franchisees everything about the business is one way to keep them from using what they learn against you. The franchisee is dependent on the franchisor to supply proprietary products and services. Proprietary means those relating to the ownership of the brand or business. These are usually related to the franchisor’s intellectual property, like recipes and branded merchandise.

Instead of giving the entire recipe to the franchisee, franchisors may provide ready-to-use sauces, mixes, marinades, etc. to the franchisee. For retail concepts, franchisors provide branded merchandise, meaning those products that contain the brand’s logo.

Since these are proprietary items, they are available only from the franchisor and cannot be bought in the open market.

 

2.2 Killer Support Services

Franchisors are supposed to provide ongoing support to franchisees. For the purposes of this discussion, killer support services are those that are so outstanding and very critical to the franchisee’s business, yet very expensive or difficult to do on his own (in the computer industry, a killer app is a software so compelling it makes consumers want to get the hardware just to be able to use the software).

For example, a topnotch business intelligence software that provides data for making critical business decisions at the unit level can be a source of competitive advantage. Since it may be very expensive to install on his own, a franchisee would be discouraged from scaling this high barrier to entry.

A world-class marketing program is another example of a killer support service. Especially if the program is highly effective and brings business to all units on a consistent basis.

If franchisees rely on these killer support services for their business but find it difficult or very expensive to replicate on their own, then a franchisee will stay within the fold.

 

3. Keep Franchisees Happy

There are several legal and structural ways to keep franchisees in the system. But I’ve seen that the best way to keep franchisees from competing with their franchisors is by keeping them profitable and happy. If a franchisee is profitable and is happy with the relationship with the franchisor, he would not think about bolting the system and putting up a competing business. He may, in fact, even invest in an additional unit, become an area franchisee, or encourage other investors to become franchisees themselves.

Financial and strategic planning for the franchise business is therefore very crucial. The franchisee fees, royalties, markups, advertising contribution and other fees charged by the franchisor should be well within reason. Considering expected sales and relevant expenses, the profits and return on the franchisee’s investment should be attractive. The way a franchise is structured should result in a win-win arrangement, where both franchisor and franchisee benefit.

Sometimes, not all plans come to fruition, though. As the saying goes, the best-laid schemes of mice and men often go awry. The most well-thought-out business plan may not work because of unforeseen circumstances. What is important when that happens is how the franchisor will go the extra mile to help the franchisee cope with the crisis, or how fair his exit strategy for the franchisee is.

To summarize, a franchisee can be a franchisor’s worst enemy or best business partner. It depends on how the franchisor structures his franchise and how he manages the relationship with the franchisee.

 

Franchise Na Ta! – Francorp conducts franchise seminars in Bacolod

Posted on: August 14th, 2015 by Francorp No Comments

Franchise Kapihan Negros 2

Franchise Na Ta!

Dumaguete, Iloilo and Bacolod

Franchise Kapihan Negros!

August 22, 2015

Saturday 9am – 12nn

L’Fisher Hotel, Lacson St. Bacolod City

BENCH

Posted on: August 5th, 2015 by Francorp No Comments

Beginning in 1987 with a small store selling men’s t-shirts, Bench has grown to include a ladies’ line, underwear, fragrances, house wares, snacks, and a wide array of other lifestyle products, with the distinction of being present in virtually every retail space in the Philippines, and with a worldwide network of stores and outlets, reaching as far as the United States, the Middle East, and China. There are a total of 678 stores nationwide. Spreading out its wings has been continuous owning to the viable franchise partners they choose – people who really understand business and are knowledgeable about the same industry. “It was Francorp,” according to Mr. Chan, “who legitimized and gave credibility to the business concept of the Bench franchise. Francorp & its team of franchise consultants also helped professionalize the franchising industry.”

To boost Bench’s growth, it pioneered in the use of celebrity endorsers, television and giant billboards to create awareness for a fashion brand that offers premium quality products at affordable prices.

Ben Chan is the man behind the Bench brand, founder of what is now the Philippines’ largest clothing chain, under Suyen Corporation. His style is world class fashion and his work ethics impeccable, after learning the definition of “hardworking” from his Chinese forebears.

Because of his vision and aggressive but strategic moves, he has expanded the Philippine clothing chain into international markets. Bench is in Al Khobar, Saudi Arabia; Shanghai, Guangzhou, and Xian, China; Kuwait; Bahrain; and Los Angeles, California.

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.

 

Top Franchising Trends in 2015

Posted on: August 4th, 2015 by Francorp No Comments

TOP FRANCHISING TRENDS in the Philippines 2015
Noel Siggaoat
Managing Director
Francorp Philippines

At Francorp, we live and breathe franchises. Day in and day out, we help start-up and established businesses grow from one to many through franchising. In the course of doing franchise consultancy work for close to twenty years now, Francorp has been at the forefront of the latest trends in franchising in the Philippines. Below are the top three trends that will impact the Philippine franchise landscape in the next year or two, and beyond.

1. The Boom in Education Franchises

Education franchises have been around for many years now but in the last year or so, we’ve seen an explosion of education businesses opening their doors to franchising. In this category are pre-schools, math programs (computational or analytical), reading enrichment programs, professional review schools, specialty skills schools, to name a few. The origins of these concepts are both foreign and homegrown.

The demand for education in all its forms is a good sign for a country like the Philippines as it gains momentum towards developed-country status in the next decade or so. Another explanation for the growth in schools is the growing number of parents who don’t mind spending on development programs for their children, believing that these are complementary to formal education and will contribute to the child’s overall development. Of course, the growing young population is an important driver of demand for this segment.

This increasing demand for education makes enterprising Filipinos go into the education business as start-up entrepreneurs or as franchisees.

Recent Francorp clients in this category are the Canadian Tourism and Hospitality Institute (CTHI), Aloha Arithmetic, Readsmart Learning Center (formerly Infant Jesus Montessori), Explorations Pre-School, Mathemagis Singapore Math, and CMA Mental Arithmetic.

2. Use of franchising to reduce distribution layers

The traditional franchisor is the retail store or restaurant owner who goes into franchising to increase his number of branches. We are seeing a new breed of franchisors: Original manufacturers or master distributors going into franchising to reduce their distribution layers.

The Generics Pharmacy is one of the first to adopt this strategy. Instead of staying with the traditional system of supplying to distributors, who then supply to other distributors, or to stores and retailers, many manufacturers and master distributors are reducing the distribution channel by putting up their own stores directly and making these available through franchising.

Instead of being at the mercy of third-party retailers at the end the channel, these brand owners or master suppliers are controlling their own destiny by specifying how the store will look, how the products are marketed, and even the price at which these products are sold to the end consumer.

By cutting out the middle man, brand owners are able to lower the retail price of their products. Additionally, they are able to increase margins for those that remain in the channel.

Francorp clients who have adopted this strategy aside from The Generics Pharmacy are PR Gaz Haus, and Holcim Cement.

3. More complex franchise formats

For many years, franchise formats in the Philippines were the garden-variety Single Unit franchise. As the franchise industry becomes more mature, more innovative and complex formats are being employed.

Franchisors are now looking to add multi-unit formats like Area Development franchises and Master franchises to their offerings. Area Development franchisees are wholesale multi-unit owners who are given exclusivity for a city or province. Master Franchisees usually own the rights to an entire state or country and also have the option to sub-franchise to third-party investors. This is commonly used for international expansion.

Some franchisors are also offering Conversion Franchises, where independent store owners already in a similar business convert their stores and become part of the franchisor’s brand and network. Some franchisors go into Joint Ventures with their franchisees and are part-owners of the franchise store. In this set-up, they earn as a franchisor and a franchisee at the same time. Some franchisors, on the other hand, intentionally look for passive franchisees who are only interested in putting up the capital for the franchise unit; the franchisor himself will manage the franchise for an additional fee.

As franchising continues to grow in the Philippines, we may see more of these newer and innovative formats to meet the needs, capabilities, and goals of franchisors and franchisees.

Noel Siggaoat is the Managing Director of Francorp Philippines. An MBA graduate of the Carnegie Mellon University of Pennsylvania and a Certified Franchise Executive (CFE), he heads the firm’s consultancy practice. Noel has a diverse background in IT, finance, retailing, and franchising and has worked with companies here and abroad. He is a weekend athlete who has completed marathons, a half-Ironman, and other endurance events.