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Francorp - The Franchising Leader in the Philippines

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5 reasons why investing in a foreign brand is better than starting a business from scratch

Sam Christopher Lim
SVP for Marketing and Strategy, Francorp Philippines

Who is not familiar with food giants like McDonald’s or Starbucks? As an entrepreneur, owning a foreign brand such as these two might be one of your goals. After all, foreign brands are not just the playground of the big players anymore—smaller local players can now also join the fray.

Foreign franchisors now believe that smaller local players, as long as they have enough scale to grow the brand in the Philippines, will actually put more time and attention to the brand compared to bigger players with an already diverse portfolio.

“They don’t just want to be one of the many brands under a bigger company’s portfolio,” notes Hans Clifford Yao, managing director of the Adrenaline Group, which brought in Petit Bateau, a children’s apparel retailer from France, and The Paper Stone, a stationery brand from Singapore. “Because, when that happens, the focus is usually not on their brand but on the company’s more established and bigger brands,” adds Yao.

Indeed, any local entrepreneur now has the equal chance of owning a foreign brand. With this, here are five reasons why it is sometimes better to invest in a foreign brand than to start your own business concept from scratch:

1. Clear branding and marketing guidelines

When you buy a foreign brand, you do not have to invest heavily in the development of a new concept, with its own branding and marketing strategies. Foreign brands already have their own clear and established brand guidelines. And not only has the work already been cut out for you, but it is also a branding and marketing strategy that has been proven to work in different markets.

However, foreign franchisors should also have some flexibility to the local market. A foreign franchisor should not only be willing to adapt to the local market, but should also be willing to put its foot down in the event that certain localization efforts might ruin the integrity of the concept. It is all about maintaining the balance between brand integrity and adaptability.


2. World-class operating standards and products

One of the biggest benefits of buying a foreign brand is you get to learn its best practices, while also getting its world-class franchise support—hence, you would not need to learn how to market and operate a business from scratch.

Also, you will not need to invest heavily for product development as the products are already there, and you will also get continuous research and development support from the mother brand. For example, The Paper Stone has in-house designers from South Korea and Singapore, all of whom lend a deft Asian touch to the brand’s modern designs.

“The Paper Stone creates its own designs. It also comes up with new designs every month, and matches it to their bags, notebooks, and pens,” shares Yao, which the mother brand then shares to all its franchisees in different markets.


3. Faster business set-up

Another benefit of buying a foreign brand is that it assures a faster business set-up. A foreign brand is usually backed by a number of trusted suppliers and service providers, which are hard to come by for most startup entrepreneurs.

For example, contemporary French furniture brand Gautier sent a team of three craftsmen and visual designers from France to help with the construction of its flagship store in the Philippines—this team was able to set up the store in Bonifacio Global City in just three days. Had this been done solely by the local partner, it would have taken at least three months just to set up the store.

But the franchise application is another thing. Aside from leveraging your credentials as an entrepreneur, referrals can also help speed up the application process, says Yao. “For The Paper Stone, the process only took six months,” recalls Yao, in part thanks to referrals from local franchise brokers.


4. Better location options

It can be hard for any startup business to secure a spot in prime locations—which is rather unfortunate since success in business largely depends on location, location, location.

But buying a foreign brand can actually ease this problem, as the brand itself can be leveraged to secure a spot in prime locations such as major malls and real estate developments. Also, foreign brands already have prior experience when it comes to negotiating for good locations in different countries, a skill that any startup entrepreneur has yet to learn.

5. Instant brand recognition

Most foreign brands are easily recognized the world over, thus making it easier for them to find success in different markets. As an entrepreneur, it can be said that the biggest advantage of buying a foreign brand is the fact that you can ride on its brand equity and strength.

But aside from focusing on the obvious choices, such as McDonald’s and Starbucks for example, it might be best to look at the different options available in the market which are still in keeping with your strengths and interests as an entrepreneur.

You can talk to your OFW (overseas Filipino worker) friends and their relatives; you can use them as antennae for up and coming foreign brands. You can ask them what foreign brands are already out there in different countries, and which ones can actually work for the Filipino market.

“Yes, it’s worth it to invest in a foreign brand, especially if you are really addressing a gap in the market and bringing in something new that the local market has been demanding for,” stresses Yao.

Top Singaporean Franchise brands such as Burger UP, Maki San, Wing Zone, Xiao Pan, Joe & Dough and Keisuke Ramen are visiting the Philippines on Jun 23 for an exclusive master franchise business matching event in BGC, for more information you can contact U-Franchise Sales and Management at (02) 634-0586, email or visit!international-franchise-matching/u5mn9


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