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Archive for June, 2017

Finding the Right Franchise Starts with Knowing Yourself

Posted on: June 30th, 2017 by Francorp No Comments

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

During my seminars, I am asked why some franchises fail, and though franchising has a 90% success rate, one key cause of failure is neglect.I often tell my attendees that in order to find the right franchise, you can be inspired bythe Greek aphorism: “Know thyself.”   Some businessmen jump straight into searching for the right franchise brand, but the first and most important step is to understand yourself, your personal preferences, strengths, weaknesses and motivations.

Whenever you are choosing a franchise, you must dig within your psyche, and you must really “know yourself”.  You must know your likes and your dislikes.   For example, you may hate beauty salons, and you prefer barber shops.  If you will choose a beauty salon franchise, then you will neglect its day-to-day operations because you cannot even entertain the idea of visiting it.

“Knowing yourself” means a clear understanding of what your likes and dislikes are, and you will apply this knowledge in the selection of a franchise.   You must only select a franchise that you inherently like because if you will violate this basic rule, you will end up neglecting your business.  You will avoid your business because it seems like a chore to you.  If you find a franchise that you love, then you will enjoy managing your business because you are passionate about it.  But if you can’t find a franchise that you truly love, at least, you should find something that you’ve tried.  Some people jump into businesses because they heard it was profitable, but unless you’ve tried it, you’ll never know if you would like it enough to be enthusiastic to manage it.  Remember, you will be managing this business every day for years to come, so make sure it’s something that excites you when you wake up.

You also need to judge your relevant previous experiences.Though skills and experience in a specific business can help, there are also drawbacks especially if it’s from a business you or your family owns.   Your family may have previous experience with a specific kind of business, and you can exploit this experience to manage your franchise.  However, you need to walk a tight balance to avoid conflicts of interest because your franchise has the same nature as your family’s business and sharing trade secrets would go against the franchise agreement.

Finally, “knowing yourself” means you must be prepared to psychologically accept the inherent limitations of your franchise.   Some people hate to work at nights, but if you chose a franchise with a 24-hours operation, then you have to learn to adjust.   If you cannot adjust and you cannot compromise, then another franchise may be more suited to you.

Once the franchise is in operation, you should then be able to balance your “entrepreneurial spirit” with the requirement to comply with the franchisor’s systems.  You should not try to change everything, and you should follow the tried and tested success formula developed by the franchisor.

In choosing a franchise, it all starts with “knowing yourself”, and you may have certain limitations which you must learn to recognize; otherwise, you will end up “neglecting the management of your business”.   However, if you choose the right franchise, and it is a perfect fit, you will not only enjoy the management of your business but also reap its financial fruits.

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

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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 GROWING THE FRANCHISING INDUSTRY: THE PHILIPPINE EXPERIENCE

Posted on: June 23rd, 2017 by Francorp No Comments

By Samie Lim, Chairman Francorp

Speech delivered at the Myanmar Franchise Association Conference

I come from a family of retailers and by natural progression ended up working for the family business. Our appliance retailing business was founded in 1948 making us a pioneer in the industry. When I was given the opportunity to manage our family business, I transformed it into a chain of lifestyle stores selling appliances, furniture, and other home accessories.

Majority of Philippine retailing, however, at the time was characterized by traditional shop-houses.

With my background and track record in the retail industry, I was elected President of the Philippine Retailers Association (PRA), which I co-founded with the objective of modernizing Philippine retailing.

This goal of modernizing Philippine retailing was given the stimulus when I championed the hosting of the Asia Pacific Retailers Conference and Expo (APRCE) in 1993. During that time, we invited the best retailers in the world and learned from what they shared that there was still much room for improvement for Philippine retailing.

I am proud to say that because of that pioneering effort to steer a new direction for the Philippine retailing industry, our country now boasts of a sophisticated retail network with 4 Philippine malls included in the top 10 biggest malls in the world.

But not the type to rest on my laurels, I continued to look for other ways to revolutionize the retailing industry in our country. Then, in several conferences I attended abroad, I discovered that as much as 50% of small , yet successful, retail stores are under the franchising model.

This discovery inspired me to promote franchising as a strategy to create thousands of small enterprises and millions of jobs and thus stimulate economic growth. And so in 1995, I co-founded the Philippine Franchise Association (PFA) together with my colleagues in Francorp Philippines, Bing Sibal-Limjoco and Manny Siggaoat.

Before the founding of PFA, there were only 45 franchises in the Philippines. But with the founding of PFA, franchising grew at a rapid rate that today, we already have 1,500 franchise brands – both homegrown and foreign – making us the leading franchise industry in the ASEAN region. How did this happen?

At this point, please allow me to share our strategy in growing the Philippine franchise industry. We are sharing this because we consider Myanmar a brother and we want you to make the most of franchising and make it work for your economy and your people. This is, after all, the vision of the ASEAN Economic Community – to have an ASEAN where there is equitable economic growth for all member nations.

Earlier, I said that the Philippines was second only to Japan in terms of economic growth. Not only that, there was a time when the Philippines was one of the most respected nations in Asia and even the world. In fact, we have produced some of the world’s greatest statesmen just like your very own U Thant.

That was back in my youth and whenever I’m in other countries, I was amazed at how people would go out of their way to speak to me just because I am a Filipino. This was the time when many of our Asian neighbors would go to the Philippines to study and learn from the best schools.

But then we became the sick man of Asia and I dreamt of making my country retrieve its pride and give it a fighting chance in a fast changing world. Then I saw that franchising can help achieve this vision because of its ability to create businesses and jobs; because of its ability to create wealth. But then a dream will continue to remain a dream unless there is a plan.

SUCCESS SECRET #1: CREATE A ROADMAP

The first thing we did was to prepare a 300 plus-page master plan to unleash the power of franchising. This master plan conceptualized a 15-year, 3-phase agenda to grow the food, retail, and service sectors of the industry. The first 5 years was allocated to developing the food sector, followed by the retail sector for another 5 years, and capped by another 5-year growth program for the service sector. Having successfully finished our 15-year plan, we are now on our 2nd cycle of franchise development for the next 15 yrs. I can discuss this with you in some future conference, if you are interested.

SUCCESS SECRET #2:

LEARN FROM FRANCHISE LEADERS

Yes, we had a plan but we also realized that we need help from those who were more advanced or ahead of us. So we invited the best minds in the industry to give talks during our annual conferences. We organized business missions and visited the best franchise shows in the world to benchmark with and draw inspiration from them.

SUCCESS SECRET #3: FORGE INTERNATIONAL LINKAGES

Closely related to this, we forged international linkages to sustain our intentions to learn the latest best practices in global franchising as well as help open opportunities for the international expansion of Philippine franchise brands. We became a member of the World Franchise Council (WFC) and a founding member of the Asia Pacific Franchise Confederation (APFC).

Today, we are a key player in global franchising. We are proud that PFA, represented by myself and Ms. Limjoco, has been elected to be part of the WFC working committee tasked to create programs that will further advance the agenda of global franchising. On top of this, PFA was also appointed to be the Secretariat of APFC as it intensifies its efforts to bring franchising in Asia Pacific to new horizons.

SUCCESS SECRET #4:

PROFESSIONALIZE THE INDUSTRY

Another important thing we did was to professionalize the industry by bringing in the Certified Franchise Executive (CFE) program to the Philippines in September 2001. The CFE program, which is a mini- MBA course, is the only internationally-recognized development program for franchise executives. We are proud to say that the Philippines has the most number of CFE graduates in Asia. But we are more proud that this program has been instrumental in growing the franchising industry in the Philippines.

This is also the reason why it has been attracting enrollees from other countries in Asia and even the Middle East.

We must have done something right because I, or my fellow founding trustees of PFA like Ms. Limjoco and Mr. Siggaoat, have been invited to represent the Philippines or Asia in various conferences, forums, symposiums across the globe to talk about the Philippine experience in franchising.

SUCCESS SECRET #4: INTRODUCE FRANCHISING TO SMALL-MEDIUM ENTERPRISES (SMES)

Lastly, but definitely not the least, a very important key in growing the Philippine franchise industry was introducing franchising to SMEs. We all know that SMEs are the backbone of every economy. There is a concern, however, that most SMEs – especially in less advanced economies – provide very little or even no value added services. Because of this, SMEs remain SMEs forever.

Franchising, however, has the power to upgrade the capacities of SMEs – whether in branding, business methods, marketing and others. Franchising has the capability to make SMEs grow big. Before PFA introduced franchising to SMEs, franchising was a business model reserved for multi-national and large corporations. This is the reason why franchising hardly made a dent in the economy. Things started to change when PFA encouraged SMEs to use franchising as a strategy to grow. Since then, growing big was no longer an impossible dream for SMEs.

We will be more than happy to share in detail with our Myanmar brothers our experience in growing the Philippine franchising sector. Before I end my speech, I would like to share with you an ideal which I have nurtured since my youth. I realize that in order to have a meaningful life, one must seek one’s higher calling. This higher calling for me is to be of service to the most number of people. Franchising, which has created about 140,000 franchise outlets and generated more than a million jobs in our country, has helped fulfill this ideal. It is my sincere wish that this will also happen to your country.

Francorp is the world’s leader in franchising. 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,(+63917) 835.55.30, email info@francorp.com.ph, or visit francorp.com.ph.

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Samie Lim is the acknowledged “Father of Philippine Franchising.” He is currently Chairman of franchise consultancy Francorp Philippines, Chairman Emeritus of the Philippine Franchise Associationand Chariman of the Blims Lifestyle Group

FranchiseTalk

Posted on: June 16th, 2017 by Francorp No Comments

10 franchise brands you didn’t know are from Cebu

These brands are king in the “Queen City of the South.”

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

The island province of Cebu is known for many things: sumptuous lechon, sweet ripe mangoes, white sand beaches, ingenious furniture design, and fiesta-loving Cebuanos, among other things.

But don’t let their laid-back and fiesta-loving lifestyle fool you; Cebuanos are a hardworking and entrepreneurial lot. It’s no wonder then that the “Queen City of the South” has seen massive economic growth and infrastructure development over the past couple of decades.

Another testament to the entrepreneurial spirit of Cebuanos is the number of franchise brands that have come out of Cebu. Some of these franchise brands have not only achieved nationwide success, they are also setting their sights on the international market.

Penshoppe

Before Gigi Hadid and Kendall Jenner ruled the city, Penshoppe already ruled fashion retail in the Philippines. Founded in Cebu in 1986, Penshoppe is the flagship brand of Golden ABC Inc., the apparel manufacturing company owned by Bernie Liu. As one of the early franchise players, Penshoppe expanded to a network of more than 300 stores here and abroad, with presence in Dubai, Indonesia, Vietnam, Cambodia, and soon in Australia.

Island Souvenirs

Founded in Cebu in 1992, Island Souvenirs took the idea of pasalubong to a whole new level. Its founder Jay Aldeguer wanted to elevate Cebu’s souvenirs industry from a cottage industry to a full-pledged retail powerhouse that can compete in the major malls. Today, Island Souvenirs uses franchising to manage a network of more than 80 stores all over the Philippines, and has paved the way for an island-hopping experience called Islands Banca and a chain of budget hotels called Islands Stay.

Bo’s Coffee

Before Starbucks came to the Philippines in 1997, there was already Bo’s Coffee. Founded by Steve Benitez in Cebu in 1996, Bo’s Coffee has since grown into one of the country’s leading specialty coffee shops. It also advocates for the promotion of Philippine coffee, and helps local coffee farmers by choosing to strictly source its coffee beans locally. Today, Bo’s Coffee is spreading homegrown coffee goodness through its network of more than 60 stores.

Hukad sa Golden Cowrie

Hukad is the latest restaurant concept by the people behind the Golden Cowrie Restaurant, which first opened in Cebu in 1982 as a hole-in-the-wall made out of bamboo and sawali. True to the Golden Cowrie tradition, Hukad’s menu and ambiance screams Filipino fiesta: huge servings of food, big tables with lots of seating room, and cheerful servers and waiters. It’s always a feast in Hukad sa Golden Cowrie’s more than 40 restaurants all over the Philippines and has recently opened its first franchise in Metro Manila.

La Vie Parisienne

As the name suggests, this quaint bakery from Cebu wants to give Filipinos a taste of the French capital, without the travel expenses. French entrepreneur Louis Thevenin partnered with Cebuano business magnate Michel Lhuillier of the Lhuillier Group of Companies to bring this bakery to life in 2013. Aside from breads and pastries, La Vie Parisienne also boasts of an extensive wine list.

Mr. Potato

Speaking of Michel Lhuillier, Mr. Potato is his latest business offering. Founded in Cebu City in 2013, Mr. Potato sells gourmet-quality flavored French fries made from imported potatoes from Belgium. These premium French fries come in cheese, barbecue, and sour cream flavors, and are served in cups for easier handling. Mr. Potato now has a network of more than 60 stores in the Visayas, and is looking for franchisees for its nationwide growth.

Dimsum Break

A modern take on the Chinese teahouse, Dimsum Break was founded in Cebu in 1996. It came as the company’s response to a mall operator’s desire to cater to late-night customers in bowling alleys and movie cinemas. Its self-service, interactive restaurant environment makes it easy for on-the-go customers to customize their meal items. Affordable Chinese fare can now be enjoyed in Dimsum Break’s 16 branches nationwide.

Beauty & Beyond

The brainchild of twins Jennifer and Jasmin Weigel-Sarmiento, Beauty & Beyond was launched in Cebu in 2012 to meet the demand for affordable, high-quality facial beauty and body sculpting services in the island province. Since then, it has been awarded multiple times as the best aesthetic center in Cebu. Beauty & Beyond opened for franchising in 2014 to jump-start its nationwide growth.

Tablea Chocolate Cafe

The star at this cafe is, well, tablea, those pressed rounds of roasted cacao beans. Founded by Aya Garcia Shlachter in 2010, Tablea offers both traditional and more modern takes on the tablea such as hot chocolate, ice-blended chocolate drinks, and tablea-based desserts such as crepes and cakes. Tablea opened for franchising in 2014 to spread its chocolatey goodness all over the Philippines.

Valeñ Antoine

This family-owned business wants to put a spring in your every step with its hand-crafted, bejeweled sandals and accessories. Operating mostly out of Cebu City, Valeñ Antoine manufactures and distributes high-quality hand-crafted sandals and accessories made out of natural gemstones, semi-precious stones, acrylic beads, Swarovski crystals, and pearls, among other materials. Valeñ Antoine opened for franchising this year so that it can better distribute its wares all over the country.

Ready to expand your business nationwide through franchising? Francorp has developed professional franchise programs for hundreds of brands to help accelerate their expansion. To know if you’re ready to franchise, take a free franchisability test, visit francorp.com.ph or call (+63917) 835.55.30 /  (+632) 638.3149

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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.

Photos from official company websites and Facebook pages.

Should I open new stores or expand through franchising?

Posted on: June 9th, 2017 by Francorp No Comments

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

There comes a time in the life of a company that an inevitable question comes – with the success of my business, how can I expand to new branches and locations? There are 2 main expansion routes that corporations take. The first is through funding their new corporate owned stores and the second is through franchising.

Expanding through corporate owned stores gives the owner more control over every aspect of the business. It gives the business flexibility to change directions and quickly adopt new policies by issuing new orders to store managers. Given that the store staff are your employees, you have the freedom to instruct them with new policies, new operations as well as reassign them as you wish. In addition, it gives you the predictability of being able to plan out when and where to open your new stores.

This strategy, however, also comes with risks and limitations. First, it is more capital intensive. Whether through savings or new loans, you will need to invest in building new branches and funding it’s operational expenses. In addition, it requires more operational management.   Additional expenses are incurred if the corporation has provincial branches.  More staff is required in order to efficiently manage these branches, and more employees will increase overhead costs.

The second option for entrepreneurs is franchising. Franchising gives owners access to unlimited capital and time to expand their business. It allows owner to expand using other people’s time, money and people.

(1) Using Other People’s Money   If the corporation adopts a franchising business model, then it will expand by using the money of other entrepreneurs.  The corporation does not need to enter into a financial arrangement with the bank and/or operate its shares of stock to the public.

(2) Using Other People’s Time.  The franchisor works with franchisees who are owners and entrepreneurs in their own right. These owners will run the business just like the franchisor and will manage the operational staff, thus freeing the franchisor from direct operational responsibilities of the franchised stores.

(3) Using Other People’s Network.  Business is about relationships, and franchising allows entrepreneurs to tap other people’s network to not only run the business, but create stronger local relationships in their specific localities.

Franchising for all its advantages, however, does also come with disadvantages. Firstly, franchising requires a deliberate investment of the owner’s time and money to develop professional franchise systems. From operations manuals, franchise business plans, legal agreements and franchise marketing plans. Secondly, because franchisors are working with franchisee owners, they cannot always just dictate new directions as they would to employees, but instead should work with these entrepreneurs as partners when implementing new ideas & systems. Lastly, franchisors need to invest time and resources in finding the right franchisee partners to ensure long term success.

Successful companies have usually tried to combine both corporate owned store expansion and franchising to achieve their success. The Generics Pharmacy, for example, wanted to focus on supplying quality products, creating a strong trusted brand and giving value added services in store such as free doctor’s consultations and check ups, so they heavily adopted the franchising model. They were able to grow to 1,800+ stores in just 8 years with over 99% of the stores franchised. Bench, for example, has bene highly successful  with their strategy of opening majority company owned stores, while offering key provincial stores as franchises. Many fast food chains on the other hand try to balance with about half corporate and half franchised stores.

There is no one size fit all solution to expansion, the important factor is that entrepreneurs know the advantages and disadvantages of various routes, and understand that healthy growth requires a mix of corporate owned stores and franchised stores. Corporate owned stores help you understand and continuously improve systems and operations and can be used as a test bed for new product introductions and a prototype for new systems you plan to implement. While franchised stores allow for rapid expansion and deeper reach into other cities and provinces. It also brings in top quality ideas as your franchisees are entrepreneurs like yourself, and will continuously look for ways to improve the business.

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.

Franchising a business starts with strong, replicable systems

Posted on: June 2nd, 2017 by Francorp No Comments

Written by

Sam Christopher Lim

SVP for Marketing and Strategy, Francorp Philippines

Franchising requires designing strong, proven & replicable systems

Customers get frustrated when you order a hamburger and someone forgets to put the patty or miss key ingredients such as tomatoes or lettuce. As a franchisor, missed royalty payments or stock payments can sometimes pile up and have significant impact on your business. Some of these issues arise not because of malicious intent, but sometimes due to simple human error.

When most entrepreneurs have 1 branch, they solve minor errors through ad hoc solutions. Whether it’s having someone re-type hand written sales reports in an excel file to double check the totals, or hiring extra people to plug in various operational issue. But when you start to expand through franchising, these small errors add up and create inefficiencies that impact everyone’s bottom line. And trying to fix systems when you already have 100 branches is much more difficult than when you only have a handful.

A good system is one which tries to minimize or totally eliminate the possibility of human error. It is not about hiring a legion of auditors or problem solvers to check compliance or fight fires. It’s about creating a system that avoids or prevents mistakes before they happen. A good system does not let you take the next step unless you complete the first step correctly.

We see this everyday as we fill in forms online. Companies mark required cells and does not allow you to submit an application without first entering certain information (usually your name, mobile and email). As an additional safety measure, they also ensure that you enter a proper email address and will automatically prompt if you fill in an invalid email. Lastly, when you’re asked to create a password, they always make you fill it in twice, just to minimize the problem of mistyping your password.

In product design, you can see this in the humble toilet stalls malls.A mall owner had noticed that a lot of people accidentally left their bag in the or belongings in the toilet. Typically there is a shelf at the back to put your bags, but this is the worst design since the bag is not in view so can easily be forgotten. Some put a hook in the door so the person always sees the bag and remembers it. But this can also fail when the person turns their back and opens the door, thus missing it. The solution that a designer created was to create toilet stalls that have a table on the side, near the door. Once you fold it down it blocks that door so you can’t open the door without pushing the table up. Hence totally eliminating the possibility of leaving your bag as you can’t leave without pushing the table up.

Supermarkets with self check out counters that are popular in the US and Europe, employ design to ensure customers scan the right items. Every time you scan an item, you put it in a bag that’s on a weighing scale. If the item code does not match the additional weight, then it prompts you or does not allow you to scan the next item. This avoids customers accidentally scanning the same product twice, or scanning a product once but then putting 2 of the same item in the bag.

In franchising, these design principles are used by various brands as they scale to hundreds of stores. To avoid late payment of stock deliveries, some companies only release stocks once payments have been made and a proof of payment is shown. To prevent issues on royalty payments, most retail companies insert the royalty costs as part of the product cost thus avoiding the need to audit sales and royalties. In certain kitchens, kitchen printers are linked to cash registers to minimize errors in preparation, Commissaries deliver products in premixed, pre-measured single serve packs to ensure that every store always deliver the right portions and also to help track sales of each store.

Whatever your industry or whatever size your company is, thinking and investing in strong, replicable systems will help you avoid bigger issues in the future and ensure that your company can scale up quicker, faster and more efficiently.

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.