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Francorp - The Franchising Leader in the Philippines

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Archive for February, 2018

Franchise Talk: Franchising in ASEAN Revisited By Samie Lim, Chairman Francorp

Posted on: February 23rd, 2018 by Francorp No Comments

Franchise Talk: Franchising in ASEAN Revisited

By Samie Lim, Chairman Francorp

It has already been two

years since the launching

of the ASEAN Economic

Community (AEC), which promised a

new era of opportunities for the region.

But like all good opportunities many

have missed it or have failed to see the

possibilities that the AEC is offering.

 

Yes, the facts are clear that

ASEAN is currently the 6th largest

economy in the world and has a market

of about 630 million. Furthermore,

there is a big chance of the ASEAN

economy inching up in the coming

decades because of its annual GDP

growth of 5%.

 

Despite these glowing

statistics, there are still Philippine

businesses who prefer to look beyond

ASEAN for expansion opportunities

because of the notion that ASEAN

countries are so similar that there

are no investment prospects worth

exploring. While it is true that ASEAN

countries have many commonalities,

I have also seen that we differ in

many aspects. These I have seen in

my participation in business missions

organized by the Department of Trade

and Industry (DTI), the Philippine

Franchise Association (PFA) and in my

personal trips across the region.

 

We are not a monolithic market

as many of us would think. We are

diverse economically with Singapore

having a GDP per capita higher even

that that of the United States and

50 times higher than Myanmar and

Cambodia. We differ in our language,

religion and culture. And more than

these, we also differ in our preferences

and tastes.

 

We, Filipinos, love to go

to malls but the Vietnamese still

prefer to spend time outdoors and in

parks. Despite the heat, I have seen

Vietnamese eating in outdoor cafes

and restaurants. Price matters to both

Indonesian and Malaysian consumers

but Malaysians are willing to spend on

well-known brands while Indonesians

spend on products with good quality.

Singaporeans, meanwhile, value

premium, healthy and safe products

and they are very particular on about

customer care and after sales service.

Myanmar consumers love to travel

and this may be due to the fact

thatMyanmar has the highest number

of public holidays in ASEAN. Laotian

consumers like to party and they party

with Beerlao, which they consider the

best beer in the world. I have seen

how Laotians party during one of my

trips and theirs is definitely one for

the books. I remembered observing

one from my hotel. The party started

late Friday afternoon and this lasted

until Saturday dawn. It is not easy to

ignore the revelers because their music

was raging all through the night. But

what was most surprising for me was

that when evening came they were

partying again. All through the night.

These and other experiences

have made me realize that there is more

to the ASEAN market than meets the

eye. There are various nuances to the

ASEAN market. These nuances make

ASEAN an exciting and rewarding

market for Philippine franchises going

international.

 

Recognizing this, we, in

Francorp, have partnered with AS

Louken, a global branding authority,

and Astreem Consultancy, an expert

in internationalizing brands, to better

equip us in helping our clients connect

with their market and prospective

partners in ASEAN.

 

Philippine franchises have

a lot of catching up to do, however.

Based on latest figures from PFA, there

are about 10 Philippine franchises

expanding in ASEAN countries. This

is a far cry, however, from Malaysia’s

77 brands and Singapore’s 50 brands

operating across ASEAN. Our closest

rival would be Indonesia with 12 brands

operating in other ASEAN countries.

 

 

Clearly, the best time to

expand in ASEAN was a few years

back. The next best time is today. So

let us roll our sleeves and start working.

Let us proudly raise the Philippine flag

all over ASEAN.

 

 

 

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.

 

*****

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

Francorp Celebrates 20 Years of Franchise Leadership

Posted on: February 16th, 2018 by Francorp No Comments

Francorp Philippines celebrated its 20th year anniversary by honoring leaders in the franchising industry. Over 300 franchise icons, entrepreneurs and government leaders celebrated 20 Years of Franchise Leadership in the Ibiza Beach Club in BGC. The event highlighted top franchise brands in the country and recognized young, up and coming brands making it big in franchising both locally and internationally.
Seven brands were Inducted into the Francorp Hall of Fame for epitomizing excellence in the franchise industry. Max’s Restaurant, Bench, Goldilocks &Penshoppe were inducted into the Hall of Fame: P10B Club, for achieving systemwide sales of over 10B both locally and across the globe.
Inducted into the Hall of Fame: 1,000 Club were The Generics Pharmacy, for having achieved over 2,000 stores in just 10 years& Potato Corner who grew to over 1,000 stores in the Philippines, Indonesia, Thailand, USA, Panama, and across the world.
Jollibee, one of Francorp’s first clients, was awarded the first ever Double Hall of Fame award for having achieved both P10B in sales and 1,000 stores across the globe.
Samie Lim, Co-Founder & Chairman Francorp shares“This is not just a recognition of their excellence, but also an affirmation to the world that the Philippines is the breeding ground for successful, world class franchise concepts.”

Transforming the Philippines to the Franchise Hub of Asia
From virtually a non-existent franchise player in the 1990’s, the Philippines has transformed itself and has positioned itself not only as the Franchise hub of Asia, but also the Top 5 Franchise market in the world. With over 1,500 franchise brands, and a diverse market that spans across service, retail and food, the Philippines continues to be a thought leader in franchising around the world.
Francorp CEO Bing Limjoco recounts, “Our love affair with franchising began in 1993 when we came across a Philexport USAID-funded study that said “franchising will be the next fastest rising industry”. Back then, not many people in the Philippines were aware of what franchising was. Samie Lim, Manny Siggaoat, and I were already active members of the Philippine Retailers Association and this concept sparked our interest so much that it triggered the groundwork towards franchise-related activities.”
“Because we believed that in order to have a voice and create the infrastructure for franchising, we needed to band together. So we registered the Philippine Franchise Association in 1995 with 15 business owners as incorporators. Today, the association hasover 600 brands who contribute 70-80% of the total franchise sales in the Philippines.” Lim, adds.

A Rocky Start
Beyond creating an association, it was critical that services were created to help transform businesses into professional, world-class franchises. “Since we knew very little about franchising, we searched long and hard for consultancies we can work with, from Europe, Asia and the US. After a long search, we decided to work with the franchise consultancy firm that helped in Jollibee’s expansion – Francorp. Francorp in the U.S. is the oldest and most respected franchise consultancy firm. It has 27 offices worldwide, covering 45 countries.” Limjoco adds.
The industry had a rocky start, as when Francorp Philippines started operating in 1997, the Asian Financial Crisis hit. But as a true testament to the power of franchising, a handful of SMEs trusted and used franchising to come out of the crisis bigger and stronger. “Many mom and pop stores whose hands we held during their baby steps in franchising are now international brands to reckon with. In our own small way, we are thankful that they entrusted us with growing their brands.”
“When we were starting, we strived to learn the best practices in franchising from the more mature franchise markets around the world. It is heartening to note that now, we are the ones teaching and sharing our know how with the world when it comes to franchising. We are now considered as the franchise hub of Asia, with the biggest number of internationally Certified Franchise Executives outside the US, and is top 5 in the number of franchise concepts.” Lim shares with pride.

Growing from One to Many
“When my father and his cofounders established Francorp in the Philippines 20 years ago, reaching a hundred outlets was the lifetime goal of most businesses.” Says Manuel Siggaoat Jr, Managing Director of Francorp. “But today, we are able to welcome more brands into ‘The 100 Club’. Thanks to franchising, these brands have achieved over 100 stores in less than 5 years” adds Siggaoat.
Infitinea (200+ branches), Farron Café (200+ branches), Turks Shawarma (300+ branches), LC BigMak (700+ branches) and Mr. Quickie (300+ branches) were all awarded with the One to Many Award: The 100 Club).
Breaking the stereotype that franchising is only for older, established players, the One to Many: The Millenial Club award recognized young entrepreneurs who were able to achieve double digit branches in less than 3 years. Awardees were Don Cenita (28 years old) of Citrus Zone (52 outlets), Aiza Valencia (25 y.o.) of BenteSilog (50+ outlets), Walther Buenavista (28 y.o) of Shawarma Shack (28 outlets) and KristineLim (32 y.o) of Johann Coffee (10 branches).
International Filipino brands were also recognized in the International trailblazer awards with Crystal Clear for their expansion into Indonesia, Malaysia, and Sierra Leone. Oryspa in Singapore, Myanmar and Vietnam. Mineski Infinity Cyber Café with over 140 global outlets in the Philippines, Malaysia, Thailand and Indonesia. Waffle Time from Iloilo to Indonesia, Pancake House in Malaysia, Brunei & UAE & Bo’s Coffee in Qatar.

What’s Next?
Lim proudly share that as for Francorp, as it celebrates its 20th year in the Philippines, “we are also proud to say that after twenty years, Francorp has become an enabler and multiplier – having served some 500 clients in various stages of their growth, helping generate over 250,000 jobs and being awarded as the “International Master Franchise of the Year” in the Franchise Excellence Awards. More importantly, Francorp is proud to have helped plant Filipino franchise brands in every Asean country and in every continent around the world except Antarctica”
Christopher Lim, Chief Marketing Officer of Francorp shares, “When a company has achieved so much, thinking of what’s next is not an easy task. So to look forward, we had to look back at the founding mission of Francorp – which was to create world class franchise brands that help create thousands of entrepreneurs and millions of jobs. So we decided that to continue fulfilling this mission we had to grow from 1 consulting company to a group of consulting services.”
From a small group of 5 people when it initially opened its doors, Francorp is a consulting group with over 5 brands and 40 people spread across the Philippines. With series ranging from Franchise Sales & Marketing through U-Franchise Sales & Management, Digital Marketing through Zoom Lab Digital, International Branding through AS Louken Sachi and Franchise financing through Franchise Investment Holdings, Inc.
“Beyond creating new services, we’ve also expanded our footprint. We have opened branches in Davao and Cebu and are setting our sights to ASEAN. By the end of the year, we would be expanding our services in Thailand and are in discussions for an entry into Myanmar and Indonesia.” Chris Lim adds.
As to where will the industry move next, Samie Lim shares “Moving forward, we would like to see the day when Filipino franchise brands will become one of the top foreign exchange earners in the country. Exporting a franchise business is more valuable and sustainable than just exporting a few seasonal products. We want the Philippines to be the number one exporter of franchise brands across ASEAN region in terms of number of exported franchise brands.”

6 steps to convert your business into a winning franchise

Posted on: February 9th, 2018 by Francorp No Comments

Francorp used this six-step process to help brands such as Jollibee, Potato Corner, Bench, The Generics Pharmacy, Crystal Clear, Mont Albo Massage and 3,000 other clients to grow from a small business into a success story.  Here are the six proven steps to convert your business into a winning franchise:

  1. Strategic planning

Franchising seeks to create a win-win scenario for the franchisor, the franchisees and the customers. To achieve this scenario, strategic planning is crucial. The business plan and the financial model must be created.   The business plan should explain where and who to sell your franchise to; the price of the franchise and royalty fees; and how to develop your franchise operations and support infrastructure.   Strategic planning intends to maximize the franchise’s revenues to benefit all of the parties involved.

  1. Streamlining operations

The business owner should detail the tasks and activities required to operate your business on a daily basis from opening to closing time.  The operations manual must explain how to run the business, from hiring policies, financial controls and effective audit practices.  The manual must set the benchmark to audit the employees’ quality of work, and it also ensures consistent quality throughout the franchise network.

  1. Legal documentation

The franchisor must prepare the legal documents which will protect its trademark and names.  The franchise agreement must be prepared, and it not only defines the rights and responsibilities of the franchisor and the franchisee, but it also enumerates and imposes the corresponding penalties if there’s a violation thereof. If the franchise agreement is below twenty pages, it is too short, and it will not sufficiently protect the franchisor and/or the franchisee.

  1. Franchise marketing

The business owner may have mastered the art of marketing his product/service, but marketing a franchise is different because it tries to procure franchisees.  It requires a different strategy because you will identify the ideal franchisee, and it will detail how to effectively reach them.   It not only tries to focus on the strengths of your products/services, but it also focuses on people who want to start their own business and be their own boss.

  1. Franchise sales

Selling your franchise is different from selling products/services.   “Franchise selling” is like business matching because it tries to find the right franchisees.   You can’t choose your customers, but you can always choose your franchisees.   You can’t just sell your franchise to anyone.  The success of a franchise depends on an effective franchisee selection process.

  1. After-sales support

One of the key promises of franchising is that people can be in business for themselves but not by themselves.  As a franchisor, you also need to be there for your franchisees even after the contracts have been signed. This usually entails consultations with your franchisees even after the opening of their outlets.  To ensure the success of every franchisee, a franchisor should provide the support and guidance to increase the franchise network.

Franchise Talk: 5 Point Checklist to find the right franchise

Posted on: February 2nd, 2018 by Francorp No Comments

By Sam Christopher Lim

Senior Vice President, Francorp Philippines

A common question that’s asked is: “What’s the best franchise to invest in?” Finding the right franchise is a very personal decision, and the answer may be different for every person. I prepared a 5 point check list that would-be franchisees can ask to 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.