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Archive for May, 2017

5 Secrets to OFW Franchise Success

Posted on: May 26th, 2017 by Francorp No Comments

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

After I delivered a lecture about franchising, I was subsequently approached by an Overseas Filipino Worker (OFW) who was very interested in franchising.   As with most OFWs, he planned to return to Saudi Arabia after the grand opening of his business and he planned to delegate this task to his wife.  This posed a problem as most franchisors expect the owner to be active in the business, but economic factors force OFWs to return back to a different country. From my discussion with him and other OFWs, I wanted to share some insights into secrets to ensure franchise success.

  • Save money to buy a unique franchise that you love, not just one that you can afford – Investing in a franchise is a long term commitment, and you will be faced with the business day in and day out, so you need to ensure that the business you invest in is something you believe in, something you enjoy doing and something that would be proud to represent. Of course, there are some franchises that are just a bit over the savings you may have, and this is where you can explore getting new investors, getting a loan or speaking with the franchisor. What’s important is you don’t settle for a franchise you do not really believe in as this will be detrimental to you in the long term.

 

  • Managing the business is key–Franchisors prefer that you as the owner manage the business, but if you plan to have your wife or children manage, make sure they are part of the process of choosing the franchise. They should be part of searching for a business, applying for the franchise, looking for the location. They need to feel ownership. This is not a condo that can just be passed on, there has to be real interest from the people managing it.

 

  • Leverage technology to help you manage remotely – Although you will not be operating the business day to day, with the improvement in technology, you can still keep an eye on important aspects of the business even if you are abroad. Invest in cloud based POS & accounting systems so you can keep track of sales & expenses while you’re away. CCTVs can be accessed online so you know what’s happening in store. If needed, you can also interview key personnel via Skype before hiring and do regular meetings with your key managers.

 

  • Create a buffer fund –Make the most of your income abroad to create a buffer  fund – save enough to open the business, but also create a fund to manage the ups and downs of the business. Don’t invest all your life savings in 1 business. Franchising has a 90% success rate, but you still need to prepare your buffer fund to manage the ups and downs of any business.

 

  • Trust and work with the franchisor –The franchisor’s success relies on the franchisee’s success. They will train not only you family who will stay to manage the business but also their employees.   In addition, during the grand opening, the Franchisor might even send an “opening team” who are “veteran employees” of the Franchisor.  These tenured employees will actually demonstrate the operations, and the franchisee’s new employees will learn as they go.   The Franchisor will also continually conduct training in order to assist your team so that they will continuously improve.

The OFW who spoke to me a few years ago followed these tips, especially the idea of creating a buffer fund, and he’s been able to create franchise success.  Luckily for him, the OFW did not lose money during the first few months of operation so he subsequently used the savings (which was originally intended as a buffer fund) in order to put up another business.   Now, he has two franchise businesses, and he is planning to put up another one.  Another plus:   he is no longer working in Saudi Arabia.

Finding the right franchise starts with education. U-Franchise conducts regular“How to Invest in the Right Franchise” seminars. For more franchise opportunities visit www.ufranchiseasia.com or call(+632) 6340586 , (+63917) 8816999

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Chris Lim is the Senior Vice President for Marketing and Strategy of Francorp Philippines (francorp.com.ph); President of U-Franchise Sales & Management (www.ufranchiseasia.com); and Chairperson and Director for Special Projects, ASEAN Integration-Philippine Franchise Association.

FranchiseTalk

Posted on: May 19th, 2017 by Francorp No Comments

5 signs your business is ready to franchise

You might be sitting on a goldmine and not realize it yet.

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

If you’re an entrepreneur who’s been running a business for more than a year, chances are you’ve probably heard your fair share of this question from colleagues and customers: “So, will you franchise your business?”

Maybe you haven’t really given franchising much thought, let alone think that now is the right time to franchise your business. For entrepreneurs who are wondering when is the right time to give franchising a shot, here are five signs that your business is actually ready for franchising.

  1. You have at least one operating prototype.

Franchising is about replicating a successful business, so it is essential that you have at least one operating store. But it will actually be even better if you have three or more operating branches prior to franchising. Not only will this allow you to improve and streamline your business operations prior to franchising, but having multiple existing branches will also give you the opportunity and the platform to show your potential franchise buyers how the business operates on a daily basis. This will give them a better glimpse into the business, and will also allow them to buy into the franchise concept with eyes wide open.

  1. Your business has had at least one year of profitable growth.

This is the minimum requirement, but it’s even better if you’ve had a three to five years of profitable growth prior to franchising. A year of profitable growth is enough to determine how your business will fare given the different seasons and movements of the market. Also, this would have given you enough time to further improve business operations and strategies, which will be important once you go into franchising.

  1. People are asking if they can franchise your business.

A person wouldn’t ask if your business is open for franchising unless he is interested to buy a franchise of it himself, especially if he is not even from your local vicinity. These franchise inquiries mean that, not only are more people on the prowl for a franchise business to invest in, but also that your business concept is unique to them and is actually worth replicating in their territory. Of course, franchise inquiries alone are not enough to say that your business is ready for franchising, but they are a strong indicator that people will be interested to invest in your business concept once it opens for franchising.

  1. The business concept and operations can easily be taught.

Franchising is not just about the transfer of rights; it is also about the transfer of proprietary knowledge and technologies. As such, the business’s concepts and operations should have been made simple enough to teach to any potential franchisee prior to franchising.

Understand that most would-be franchisees are also first-time entrepreneurs; most of them have no previous experience when it comes to running a business and have chosen to invest in a franchise business due to the training and the guidance it will provide. With that being said, simplifying and streamlining your business’s operations prior to franchising will make it easier for your potential franchisees to comply and replicate your business’s success in any territory.

  1. People are starting to copy your business concept.

As they say, imitation is the greatest form of flattery. Entrepreneurs are good at spotting up & coming concepts and these enterprising minds usually copy those concepts that are doing well so as to ride on the business’s success and popularity.

With that said, it might be a good time to consider franchising once you see other business owners trying to copy or recreate your business concept. It’s all about beating them to the punch—franchising will give your business the opportunity to evolve and scale up before these copycats even have the time to improve their own systems. These copycats might have copied your basic business concept, but they wouldn’t be able to execute and market a business as effectively as you do.

Take a free franchisability test (http://francorp.com.ph/are-you-franchisable/) and learn whether your business is ready to grow through franchising. For more information on franchising, contact Francorp Philippines at (02) 638-3149, email info@francorp.com.ph, or visit francorp.com.ph.

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Sam Christopher Lim is the senior vice president for marketing and strategy at franchise consultancy Francorp Philippines; president of U-Franchise Sales & Management; and chairperson and director for special projects for Asean integration at the Philippine Franchise Association.

Franchise Talk: Do I need to create a new company before franchising my business?

Posted on: May 12th, 2017 by Francorp No Comments

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

 

Speaking to hundreds of entrepreneurs throughout the years, one question is always asked when it comes to franchising – do I need to create a new company when I decide to franchise my business?

When you decide to franchise your business, there are 2 options that you can take.

The first option is to manage the franchise within your current corporation. This may seem the simplest way but is generally not recommended. First of all, this requires modifyingthe articles of incorporation because the corporation must declare in its primary and/or secondary purposes that it is also engaged in the business of franchising.   Otherwise, one of the board directors may question the legality of the franchise expansion on the ground that it is ultra vires, that is, it is beyond the purposes as declared in the articles of incorporation.   Thus, corporate acts may be invalidated because they are considered ultra vires or beyond the purposes of the corporation.  Thus, there is a need to modify the articles of incorporation in order to ensure that all corporate decisions regarding franchising are in line with the company’s declared purposes.

In addition, combining the franchising company with your corporate owned stores can create issues of management & accounting in that revenues and expenses would be mixed together and there will be less clarity on which part of the business is growing and bringing in profits.

The second option is to create a separate franchise corporation, and its main focus will be the management of the franchisees.  This second option is the one adopted by majority of franchising companies and is considered best practice internationally.

The primary advantages of creating a separate franchise corporation are:

(1)  The franchise corporation will focus on the management of the franchisees.   Its managing director’s main role is to ensure that franchisees are supported and that the franchise business grows. While the employees are focused on recruiting new franchisees and ensuring that franchised stores are being managed and operated to the standards of the brand.

(2) The accounting & management system is simplified and there’s a clearer understanding of where profits & growth come because the books & employees of the franchise corporation are separate and distinct from the mother corporation that runs the corporate owned stores.

(3) In the unlikely event that alawsuit is brought up against the franchise corporation arising from its franchise activities, it will not adversely affect the mother corporation because the franchise corporation has an entity which is separate and distinct from the mother corporation. This provides a firewall that protects your corporate owned stores from issues that may arise from franchising.

Although running 2 separate companies may seem more complicated, in the long run, creating a new franchising corporation gives owners & manager improved focus, more clarity on business performance and improved protection if issues arise.

Francorp helps businesses scale up through franchising by helping entrepreneurs create detailed operations manuals, professional business plans, franchise legal agreements and conducting regular How to Franchise Your Business Seminars.For more information contact Francorp Philippines at (02) 638-3149,(+63917) 835.55.30, email info@francorp.com.ph, or visit francorp.com.ph.

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Chris Lim is the Senior Vice President for Marketing and Strategy of Francorp Philippines (francorp.com.ph); President of U-Franchise Sales & Management (www.ufranchiseasia.com); and Chairperson and Director for Special Projects, ASEAN Integration-Philippine Franchise Association.

Franchise Talk: 5 Point Checklist to find the right franchise

Posted on: May 5th, 2017 by Francorp No Comments

By Sam Christopher Lim

Senior Vice President, Francorp Philippines

As I speak and talk with hundreds of entrepreneurs across the Philippines, a common question that’s asked is “what’s the best franchise to invest in?” I wish there were a simple answer to this, but finding the right franchise for you is a very personal decision and the answer may be different for every person. So instead, I prepared a 5 point check list that would-be franchisees can ask as they find the right franchise

Unique Brand & Concept that you Love

As with most things in business and life, finding the right franchise starts with something that you love. A business that you would be proud to call your own, a brand that you believe in and a product & service that you are excited by.

Financially profitable & stable

Franchising is about duplicating a successful business, so make sure that you find a franchise that has the right profitability for the investment that you put in. Understand the payback period – the length of time that it will take to recover your investment. And understand the monthly profitability so you can decide whether to give up a job for this franchise or if the cash flow is right for your lifestyle.

Rigorously developed franchise program

Not all franchise programs are created equal. Some entrepreneurs wake up one day and decide to franchise their business out and do so by downloading agreements and manuals online and just decide on fees and royalties based on just looking at the rest of the brands. Others, however, take the time to work with franchise consultants to rigorously develop every aspect of the program from the business planning, to operations manuals, legal agreements down to marketing and sales strategies. So when finding your perfect franchise, make sure you understand how the team prepared the franchise program.

Aggressive marketing & innovation program

Franchisors typically charge franchisees a monthly marketing fee. Understanding where these fees go and how the franchisor uses it to build the brand is important so you understand how the brand owners are taking care of, and growing the brand. As the brand grows, so does your store. Equally important is how often they innovate on their products, foods or services. Imagine owning a food franchise that only serves 1 item and never introduces something new… it would be very difficult to keep on attracting customers over the long term.

Non-stop support

Franchising has a 90% success rate because of the continues support that franchisors give franchisees. So understand the type of support you will get and who will support you from the head office. This is crucial as you continue to learn the business and leverage on the experience of the franchisor so you don’t have to make the same mistakes as them.

With over 1,600 franchise brands to choose from, Filipinos have never been more spoilt with choices. This 5 point checklist should help guide you as you narrow down and choose the right one for you.

Finding the right franchise starts with education. U-Franchise conducts regular“How to Invest in the Right Franchise” seminars. For more information visit www.ufranchiseasia.com or call(+632) 6340586 , (+63917) 8816999


Chris Lim is the Senior Vice President for Marketing and Strategy of Francorp Philippines (francorp.com.ph); President of U-Franchise Sales & Management (www.ufranchiseasia.com); and Chairperson and Director for Special Projects, ASEAN Integration-Philippine Franchise Association.