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Archive for April, 2016

3 lessons from next-generation franchises

Posted on: April 18th, 2016 by Francorp No Comments

“This article first appeared on www.entrepreneur.com.ph What we can learn from the Filipino winners in the global NextGen in Franchising awards.

NEXT GEN. From left: Philippine Franchise Association's (PFA) Franklin Go, The Paper Stone's Hans Yao, NextGen's David McKinnon, Calata Corp.'s Joseph Calata, and PFA's Sam Christopher Lim. Photo from Francorp Philippines

NEXT GEN. From left: Philippine Franchise Association’s (PFA) Franklin Go, The Paper Stone’s Hans Yao, NextGen’s David McKinnon, Calata Corp.’s Joseph Calata, and PFA’s Sam Christopher Lim. Photo from Francorp Philippines

Showcasing once again the talent and creativity of Filipino entrepreneurs, two Filipino companies bested over 300 entries from around the world to win in the global NextGen in Franchising award, given to next-generation franchise leaders and recognizes the brands that can further scale up through franchising. Joseph Calata, the president and CEO of Calata Corporation, and Hans Yao, the president and CEO of The Paper Stone, were both awarded during the International Franchise Association (IFA) Franchise Convention in San Antonio, Texas on February 20, 2016. Each winner was flown to the US to attend and participate in the NextGen Franchise Accelerator program, while also meeting top franchise executives from around the world. What advice do these global winners have for would-be franchisors?

ON PAPER. Hans Yao brought The Paper Stone stationery brand to the Philippines, with a vision of “bringing back the joy and beauty of writing.” Photo from Francorp Philippines

ON PAPER. Hans Yao brought The Paper Stone stationery brand to the Philippines, with a vision of “bringing back the joy and beauty of writing.” Photo from Francorp Philippines

1. Believe in the concept “You must first learn to love your business to effectively franchise and manage it,” advised Yao. The passion you put into the business and concept will show at every layer of your business, so you need to make sure you energize everyone with your passion. Yao, a third-generation retailer, brought in The Paper Stone stationery brand to the Philippines. With a vision of “bringing back the joy and beauty of writing,” The Paper Stone offers cute and lively designs of stationery, pens, and other novelty items. With over 50% of the Philippine population under 24-years-old, Yao sees a big opportunity in letting them experience writing on a piece of paper instead of an iPad, and putting photos and memorable items in a scrapbook instead of just posting on Facebook. The Philippine market seems to agree with Yao as the company has grown to over 9 stores within a year. And with his recent win in NextGen, he plans to open more in the coming years. “Our initial goal was to open 60 franchise units within five years. After attending the NextGen, we can easily make it to 100 now,” Yao said.

GLOBAL REACH. Joseph Calata, standing, presents the concept of Agri to a group of international franchise leaders and entrepreneurs in San Antonio, Texas. Photo from Francorp Philippines

GLOBAL REACH. Joseph Calata, standing, presents the concept of Agri to a group of international franchise leaders and entrepreneurs in San Antonio, Texas. Photo from Francorp Philippines

2. Get the entire company on board A shift from being an operator or distributor into a franchisor is a big change for both the owners and the team. Calata advises franchise owners that “as the leader, it is important to have the entire organization on board, from senior leaders down to the sales and operations teams.” With over 100 stores, Calata’s Agri retail franchise continues to use franchising as a tool to accelerate their growth nationally. “We will be the ‘7-Eleven of the agri-retail industry,’” said Calata as he shares his vision for the company. Starting out as a small retail operation, Calata has grown the company into a multi-billion peso corporation that spans retail, distributorship, and food and beverages, pushing forward the farm-to-table model. By offering strong support to farmers, premium quality products, and a professional retail experience, Calata plans to continue entering new provinces and eventually grow internationally. “Our company is growing and, with the right help, we will continue to accelerate our growth in the coming years.”

3. Seek the right mentors “What I know about franchising, I learned from other people who knew more than me,” said Yao. “The experience of rubbing shoulders with and being mentored by franchise leaders and CEOs, and sharing notes with fellow emerging entrepreneurs worldwide, is something that I will forever cherish.”

 

For more information on franchising, Francorp Philippines is organizing “How to Franchise Your Business” seminars for entrepreneurs on March 15 and April 13, 2016. For inquiries, please contact (+632) 638-3149, email info[at]francorp.com.ph or visit www.francorp.com.ph.

 

The changing landscape of retail franchising in the Philippines

Posted on: April 15th, 2016 by Francorp No Comments

“This article first appeared on www.entrepreneur.com.ph

Constant innovation drives the retail franchise segment’s relentless growth.

INNOVATORS. (From top): Penshoppe, Bench, Plains & Prints brands have not stopped innovating and steadily disrupting the way of doing business to stay ahead of the consumers’ ever changing behavior and preferences.

INNOVATORS. (From top): Penshoppe, Bench, Plains & Prints brands have not stopped innovating and steadily disrupting the way of doing business to stay ahead of the consumers’ ever changing behavior and preferences.

Based on a recent investment guide by a trusted business magazine, 19 of the 50 biggest franchisors in the Philippines come from retail. One of the major factors that continue to drive these businesses to stronger positions, both locally and internationally, is innovation.

Innovative retailing
Despite the consistent inflow of international retail brands, local brands have not stopped innovating and steadily disrupting the way of doing business to stay ahead of the consumers’ ever changing behavior and preferences.

Bench started as a small boutique in Park Square in Makati City. Now, it is recognized for introducing industry firsts—celebrity endorsement, large scale billboards, foreign brand ambassadors, as well as venturing into other industries such as cosmetic line and fragrances, furniture (Dimensione), beauty salon, snacks, personal care needs, and bringing top international brands to the country.

Golden ABC’s biggest Penshoppe outlet in SM Seaside City in Cebu not only marks a feat for the retail giant but also showcases interactive digital screens that customers can use to skim through current collections.

Plains & Prints continues to makes waves with its collaborations with top local designers and most recently with photographers, Wig Tysmans and Mark Nicdao, embossing their awe-inspiring photos of Baguio and India through digital printing technology in their new collection, Photographic Memories.

There is also Folded & Hung with its Famous Salon, with an in-house snack bar Famous Kitchen serving light snacks and drinks; Bayo’s tribute to San Fernando, Pampanga lantern artisans by having unique designs imprinted in their Style Harvest collection; and Marithe + Francois Girbaud’s introduction of laser blading and techno fusion in modern sewing.

Experience retailing
“Not just fashion, but an entire lifestyle,” that is the phrase made popular by Bench. With experience retailing, consumers are not only buying products but also experiencing that spark their imaginations, their emotions, as well as inform and involve them.

When Bench opened SuperBench, a 3,000 square meter space in Market! Market! Mall in Taguig City, it introduced a one-of-a-kind shopping experience to Filipinos, offering more diverse choices and everything-in-one-shop including Bench Body, HerBench, Bench scents and cosmetics, KinderBench, Bench Bytes, Bench and Bath, and Bench Fix. It is also visually eye-catching with its store design featuring Filipino comic superheroes displayed in Lichtenstein-esque panels, images of Bench’s iconic ambassadors like Richard Gomez and Jerry Yan, and even its essentially Filipino Superbench bayongs (native, carry-all bag).

Golden ABC’s Oxygen has that store design creating a unique atmosphere for its fashion-forward and independent young professionals market; MEMO with its modern-luxe design with rich texture and lifestyle setting for that upscale look; ForMe on its designs that celebrate the many beautiful differences of women—from body shape, personality, preferences, and art of dressing up; and Tyler with its work-to-weekend look that is perfect for this generation’s working adults.

Travel retailing
When people travel, shopping tags along. Travelers love to discover great and unique finds they can bring home that will always make them remember that special place.

Retailers can use this opportunity to introduce and engage consumers with value offerings and a wider range of products and services not found in their home countries or home cities. And with the help of travel retail sales, retailers are also given on-hand data on consumer profiles to guide them on where to open future stores. Whether it’s international travel or domestic travel, retailers would do well in working with their franchisees to tap their local knowledge and help develop products that can target and excite the travel retail market.

Mobile and digital retailing
Phones are everyone’s necessity and with the entry of smartphones, more and more people are using their handheld devices to purchase products online. This growth is also supported by the rise of e-commerce websites such as Lazada, OLX, Zalora, ebay.ph, and AyosDito.

Top franchise retailers such as Bench, Penshoppe, Plains & Prints, Folded & Hung, and Marithe + Francois Girbaud are leveraging this channel with each of their own mobile-friend web stores. And with Facebook exploring online shopping integration, this segment is expected to continue its exponential growth.

Indeed, retail franchising is poised to continue growing and innovating in the coming years.

*****
Chris is the senior vice president for marketing and strategy of Francorp Philippines; president of U-Franchise Sales & Management; and chairperson and director for special projects, ASEAN integration-Philippine Franchise Association.

Retail Franchising Q&A

Posted on: April 6th, 2016 by Francorp No Comments

Francorp Consultants share their insights into Retail Franchising Trends for 2016

  1. Based on industry statistics, why are retail franchises lagging behind food and service franchises?
  • In majority of countries, food franchises have always been a large part of the industry as Food concepts tend to adopt franchising earlier. In addition, franchisees tend to gravitate first towards food, partly because of the continuous demand for food, but also the pride of having your own restaurant or F&B establishment.
  • Retail and service franchises tend to be adopted as the 2nd wave once franchising is established in the market. In the Philippines, Retail is actually a large part of the industry at 34%, and is the 2nd largest. This has increased from just 28% in 2011. Although franchising in terms of apparel is slowing down due to the large influx of foreign concepts that enter through JVs or wholly owned subsidiaries, the retail segment  continues to grow due to the entrance of new convenience store players and pharmacy concepts. In fact, new concepts in retailing such as the Agri franchise focused on retailing to farmers and Holcim Hubb Builders Center focused on people constructing homes have also been entering the market and growing.
How to Franchise Your business | Franchise Seminar 2016

Retail brands continue to expand through franchising.

  1. What are the biggest benefits, opportunities, and challenges of going into retail franchising?
  • Retail franchising has the advantage that inventory does not spoil. Even in fashion where seasons change, you would still be able to sell your products even after a few years (albeit at a discount). In addition, retail franchises tend to have fewer staff vs. food franchises allowing you to focus your training and really focus on building a few key people in the organization.

 

  1. What would be the financial and physical requirements for going into retail? How about manpower requirements?
  • Financial requirements range widely from kiosks that can be opened at around Php 300k, to  small scale Pharmacies at Php 700k to bigger retail stores that range from 2M upwards. The manpower requirements also range from 2 people up to dozens depending on the size.

 

  1. Is retail franchising still worth getting into 2016 and beyond?
    • With increasing competition in food from both big local and international players, franchisees should look into retail franchises as a good opportunity in 2016 and beyond. The secret is in choosing the right categories to enter. Pharmacy franchises still have a lot of room for growth, but with a lot of competition, franchisees need to choose the right locations, most likely in provinces and 2nd tier cities where the density may not yet be as high. There is also the Agri Franchise that serves an underserved segment in the market – farmers.
    • In fact, I have personally invested in a retail franchise called the Paper Stone from Singapore, focusing on selling the cutest, liveliest and trendiest stationary and paper goods. The competitive advantage of the store is that new designs are developed every week to help customers keep coming back. We are very optimistic with the growth of the retail franchise segment as we aim to have 9 stores by the end of the year, after only 1 year of operations, and more in 2016.
  1. What would it take for its number to grow? Meaning, how can we further boost retail franchising as a segment?
  • Retail franchising is very robust and continues to grow. But to further grow the segment, new players and retail categories have to enter. In recent times, we have noticed that a lot of manufacturers & distributors have been entering retail – from Agri, Holcim and The Generics Pharmacy. We see this trend continuing with more manufacturers using franchising to gain scale in the retail space.
  • In addition, with more competition coming in, retailers have to raise our global competitiveness in terms of branding, quality of products and support in national and international expansion efforts

 

  1. What are the retail trends for 2016 and beyond? And how can existing and would-be retailers better cash in on these trends?
  • On an operational side, there will be more Technology-driven developments: Mobile payment solutions (Beep card), POS technology – POS leads to better conversion rates due to less queuing in stores; Apps, 3D printing – to help customers try out custom-made items before purchasing; shift to opening new online channels with players such as lazada, pocketmarket and tackatack making it much easier to open online stores.
  • Good corporate citizenship – consumers will patronize businesses with sustainable CSR programs or are known for ethical business practices
  • Further beyond 2016, I foresee online merchants expanding into offline selling.  Majority of retails sales, after all, are still offline. Zalora has started to experiment with this with their pop up stores in HK, Singapore and recently in Shangrila Mall. 

To learn more about how to franchise your business both in the Philippines and internationally, contact a Francorp franchise consultant or take a free franchisability quiz.

 

 

 

Branding or Franchising: Which should come first?

Posted on: April 5th, 2016 by Francorp No Comments

This age old question plagues many of today’s small business owners especially those who are looking to grow their business quickly and reach out to more consumers in the most cost-efficient way possible. So they rush headlong into franchising without laying the groundwork for solid branding strategies. The truth is, it is hardly a chicken and egg question. Without a doubt branding should come first.

Your brand is your best asset as a franchisor. Branding is what reels in franchisees, it’s what franchisees pay a franchise fee for. A lot of entrepreneurs are on the look out for franchise options that allow them to maximize the equity of a well-known, trusted and established brands. Branding is what attracts customers. Their purchase decision is based on what they think, know and feel about your brand. A well-branded business makes for a stable and viable candidate for franchising.

Franchise Consultant Philippines | Franchise Marketing

 

Before we get into the nuts and bolts of it all, let us first define what branding is. Typical business owners view branding as their logo, graphic elements and their store design. It is true that these are part of your brand, but true branding goes much deeper than that. Branding is also about how people perceive you, what they tell friends and family about you, it’s the purpose your brand exists. Branding is your personality, your values and your vision. Branding is what keeps your business not just successful but also sustainable.

“Your brand is the single most important investment you can make in your business”.
Steve Forbes Author/Editor-in-Chief, Forbes Magazine

Branding creates a strong foundation for franchise success

Getting into branding at early stage allows you to establish systems as your business expands. As your business grows, so does the number of people involved in developing marketing and communications materials. This increases the likelihood of your communications and brand experiences being disjointed if guidelines are not in place. When this happens, brand management become all the more indispensable.

Brand recognition mixed with consistency is key
Confusion using different brand colors, fonts and logos have a negative impact on consumer recognition. Consistency, on the otherhand allows for immediate brand recognition.

Consistency also means that your consumers should be able to expect the same brand experience wherever they are, whether they’re in a different city, province or country – from the logo, to appearance, offerings, quality of products all the way to customer service.
When you find yourself in a Starbucks in Singapore, you expect to enjoy the same Caramel Macchiato you enjoyed in Seattle. You count on experiencing the same sights, sounds and smells that you’ve enjoyed in Sydney as you have in Manila. You go to a Starbucks in Vietnam and you simply take it for granted that they will call out your name when your coffee is ready as they will in Johannesberg.

Francorp Franchise Consultant Philippines

 

Postive perceptions = positive results
A lot of people realize McDonald’s does not exactly offer the healthiest food option out there, but why do we still see long queues in the fastfood franchise during lunch hour? Why do you think people still go to the stores to order Big Mac? That’s because over the years, the brand has created goodwill that has helped the company deal with sticky situations.
They have implemented several programs that support the youths and communities that generate a lot of positive feels among consumers. Ever heard of Ronald McDonald House?

Remember the line they made famous a couple of years back, “I’m loving it”? People across the world fell for it hook, line and sinker. They would often quote it to say it in their own language.

All of these factors coming into play is what branding is all about. This simply further underlines why there’s a need to evaluate where things stand in your company as far as branding is concerned before even considering franchising. So before you branch out, look from within. Take a step back for a moment, work towards strengthening your branding strategies and soon you will be moving ahead by leaps and bounds.

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Take that first step to elevating your business into a brand. Be there when international brand strategist Melvin Ong talks about the transformative powers of branding on April 26, 2016 at the Ascott Bonifacio Global City Manila in a seminar aptly called “Branding for Global Success”. Mark it on your calendars. For details call 634-3717, 634-0586 or 638-3149 to 50 or email cheech.santos@aslouken.com

 

This article originally appeared on entrepreneur.com.ph

 

 

 

 

Branding for Global Success Seminar

Posted on: April 4th, 2016 by Francorp No Comments

Date: April 26, 1 to 5pm

Venue: Ascott Hotel, 28th Street corner 5th Avenue, Bonifacio Global City

Are you a small business with big dreams? Now is the time to live large.  Learn the secrets to conquering the global business arena through the transformative power of branding in a seminar entitled “Branding for Global Success”.  Melvin Ong, international brand consultant of A.S. Louken, one of Singapore’s leading brand consultancy agencies, will let you in on breakthrough branding strategies that will help you leave a mark on a crowded and competitive marketplace. Also get the inside scoop on how branding can help amplify your digital marketing efforts.

EARLY BIRD RATE until APRIL 19!

Register Today

Branding Seminar, AS Louken Philippines, Seminar 2016

Register Today

Harnessing the Power of Digital Marketing Seminar

Posted on: April 4th, 2016 by Francorp No Comments

Date: May 18, 2016, 1 to 530pm, Ascott BGC

Listen to world-class digital marketing experts and practitioners in PFA’s Harnessing the Power of Digital Marketing Seminar. With Lianne Dehaye, Regional Manager of Facebook HQ Singapore, Cheech Santos Country Manager of AS Louken, Piccina Alvarez, CEO of Purple Click and Paul Rivera CEO Kalibrr. Free one on one consultations available after the seminar to help you get tailored advise to grow your digital presence.

REGISTER TODAY

 

Digital Marketing, Facebook Marketing, Marketing Seminar Philippines, Franchise Seminar 2016

CLICK TO REGISTER

 

Avoid these 3 pitfalls when investing in a franchise

Posted on: April 4th, 2016 by Francorp No Comments

“This article first appeared on www.entrepreneur.com.ph200451597-001 Figuring out the business you want to get into is finding out the things you are passionate about.

One of our greatest successes as a country is having over a 150,000 franchise outlets with thousands of happy franchisees. With its high-acceptability and 90% success rate over traditional do-it-yourself businesses, it has been a pretty typical case that a franchisee can own two or more franchise stores. Another great story is that a franchisee can actually own two franchise concepts, differing in category, because of the great business experience with the first. Although there are a lot of success stories, there have still been a few that have failed, and it almost always starts with their mindset. Here are the three common pitfalls you have to avoid when plunging into franchising:

 

1. Wanting fast returns.  In starting up a business, most Filipinos are more enticed on how fast the returns can get. The mindset is “I don’t care about the brand and products, I just need fast returns.” Some are frenzied by one to two months return on investment, without thinking about long-term sustainability. We tend to generally think that it is safer to get your capital back 100%, the fastest way possible, than thinking about how long the business can compete in its industry and its potential to be a market leader. When thinking about the franchise business you have been waiting to have, it is a good exercise to do a long-term, big picture way of seeing things. It may not necessarily protect you from a whole list of failures, but it will surely give you the morale to just keep going and be more equipped as a franchisee. Returns may took a longer time to come back, but would not it be a lot better to have a sustainable business for five to 10 years versus six months?

 

2. Dispassionate about the franchise.  Every time we dive into franchise consultations, we often tell aspiring franchisees to franchise a brand or industry that they love. If they have that zeal for food, then try not to invest into a car parts retail or a salon business concept. Your brand should be something that makes you your first and last customer. Figuring out the business you want to get into is finding out the things you are passionate about. Thinking of it as a hobby that you soon do and soon forget will make things more perplexed for your franchise. Your passion for the business will supply you with more reasons to work harder, bring up your a-game, makes you a better employer, as well as you share the passion with your people.

 

3. Lacking understanding on franchising.  One question we always get asked with our inquiries is if the franchise fee is all they have to pay to start the business. The franchise fee is the upfront fee paid to the franchisor for the use and privilege of using the former’s business name, system, and support. Capital is the total amount of money to be invested for putting up the physical store and making it operational, which may sometime already include the franchise fee. More often than not, aspiring franchisees get a little uncomfortable once they see the numbers towering higher than they expected. And they will soon get uninterested to the entire business structure of the franchise concept they are inquiring about. But the franchise would be more than just about the initial numbers. It is appreciating the professional system model, financial structure, and how it contributes to grow the business exponentially. If you really plan to get a franchise—or any business for that matter, it is indeed important to be aptly educated about your planned venture. Meet with franchise consultants to help match the right franchise concept for you. They should be able to unlock more insights, the pros and cons, financial and market feasibility studies, among related matters, to boot your confidence to engage in the business.

 

For more information on investing in the right franchise, U-Franchise is organizing “How to Invest in the Right Franchise” seminar on Tuesday, March 15, 2016. U-Franchise also offers free franchise matching consultations. For inquiries, please contact (02) 634-0586, e-mail franchising[at]ufranchiseasia.com, or visit www.ufranchiseasia.com.

***** Chris is the senior vice president for marketing and strategy of Francorp Philippines; president of U-Franchise Sales & Management; and chairperson and director for special projects, ASEAN integration-Philippine Franchise Association.