Francorp - The Franchising Leader in the Philippines
Francorp - The Franchising Leader in the Philippines

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Franchising Continues To Grow New Industries

Noel Siggaoat
Managing Director
Francorp Philippines

At Francorp, we live and breathe franchises. Day in and day out, we help start-up and established businesses grow from one to many through franchising. In the course of doing franchise consultancy work for close to twenty years now, Francorp has been at the forefront of the latest trends in franchising in the Philippines. Below are the top three trends that will impact the Philippine franchise landscape in the next year or two, and beyond.

1. The Boom in Education Franchises

Education franchises have been around for many years now but in the last year or so, we’ve seen an explosion of education businesses opening their doors to franchising. In this category are pre-schools, math programs (computational or analytical), reading enrichment programs, professional review schools, specialty skills schools, to name a few. The origins of these concepts are both foreign and homegrown.

The demand for education in all its forms is a good sign for a country like the Philippines as it gains momentum towards developed-country status in the next decade or so. Another explanation for the growth in schools is the growing number of parents who don’t mind spending on development programs for their children, believing that these are complementary to formal education and will contribute to the child’s overall development. Of course, the growing young population is an important driver of demand for this segment.

This increasing demand for education makes enterprising Filipinos go into the education business as start-up entrepreneurs or as franchisees. Brands such as the Canadian Tourism and Hospitality Institute (CTHI), Aloha Arithmetic, Readsmart Learning Center (formerly Infant Jesus Montessori), Explorations Pre-School, Mathemagis Singapore Math, and CMA Mental Arithmetic have all started to franchise.

2. Use of franchising to reduce distribution layers

The traditional franchisor is the retail store or restaurant owner who goes into franchising to increase his number of branches. We are seeing a new breed of franchisors: Original manufacturers or master distributors going into franchising to reduce their distribution layers.

The Generics Pharmacy is one of the first to adopt this strategy. Instead of staying with the traditional system of supplying to distributors, who then supply to other distributors, or to stores and retailers, many manufacturers and master distributors are reducing the distribution channel by putting up their own stores directly and making these available through franchising.

Instead of being at the mercy of third-party retailers at the end the channel, these brand owners or master suppliers are controlling their own destiny by specifying how the store will look, how the products are marketed, and even the price at which these products are sold to the end consumer.

By cutting out the middle man, brand owners are able to lower the retail price of their products. Additionally, they are able to increase margins for those that remain in the channel.

Aside from The Generics Pharmacy, Francorp has helped develop brands such as PR Gaz Haus, and Holcim Cement to grow through franchising.

3. More complex franchise formats

For many years, franchise formats in the Philippines were the garden-variety Single Unit franchise. As the franchise industry becomes more mature, more innovative and complex formats are being employed.

Franchisors are now looking to add multi-unit formats like Area Development franchises and Master franchises to their offerings. Area Development franchisees are wholesale multi-unit owners who are given exclusivity for a city or province. Master Franchisees usually own the rights to an entire state or country and also have the option to sub-franchise to third-party investors. This is commonly used for international expansion.

Some franchisors are also offering Conversion Franchises, where independent store owners already in a similar business convert their stores and become part of the franchisor’s brand and network. Some franchisors go into Joint Ventures with their franchisees and are part-owners of the franchise store. In this set-up, they earn as a franchisor and a franchisee at the same time. Some franchisors, on the other hand, intentionally look for passive franchisees who are only interested in putting up the capital for the franchise unit; the franchisor himself will manage the franchise for an additional fee.

As franchising continues to grow in the Philippines, we may see more of these newer and innovative formats to meet the needs, capabilities, and goals of franchisors and franchisees.

Franchise Talk is a content partnership of ABS-CBNNews.com with Francorp Philippines. For more on master franchising & to meet foreign franchise brands, attend the How to Franchise Your Business Seminar on Jun 13 & 14 at Franchise Asia 2015 in SMX Convention Center Mall of Asia. For more information contact franchisetalk@francorp.com.ph or visit www.francorp.com.ph for more information.

Noel Siggaoat is the Managing Director of Francorp Philippines. An MBA graduate of the Carnegie Mellon University of Pennsylvania and a Certified Franchise Executive (CFE), he heads the firm’s consultancy practice. Noel has a diverse background in IT, finance, retailing, and franchising and has worked with companies here and abroad. He is a weekend athlete who has completed marathons, a half-Ironman, and other endurance events.

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The Next Kings (and Queens) of Kiosks

By Sam Christopher Lim
Senior Vice President, Francorp Philippines

There was a time in the not-too-distant past that the concept of a kiosk or food-cart was not considered to be big business. But when brands like Potato Corner, Fruit Magic, Candy Corner, and Andok’s began to gain in popularity, strength, and number, it soon became apparent that it was as valid a way to achieve business success as investing in a full-line store or restaurant. Now, a new wave is on the horizon and up-and-coming brands are aiming to take their place as the new kings of kiosks and carts!

The Lollicake Factory – Question: What looks like a cute lollipop but tastes like a moist and scrumptious cake? Answer: A lollicake from THE LOLLICAKE FACTORY! Actress LJ Moreno Alapag started this previously home-based business back in November 2010 after first tasting a cake lollipop in Long Beach, California while preparing for her wedding. When she returned to the Philippines and got a craving for a cake pop, she was dismayed to discover that no local bakeshops sold the novelty treat. As a skilled cake decorator and pastry chef herself, she decided to make her own, all the while applying her own special and unique style and taste. Word-of-mouth soon spread, and LJ’s “lollicakes” became popular enough that she was able to open her own storefront last September, 2011. Last year, THE LOLLICAKE FACTORY has opened itself to franchising, the better to help spread the love for exciting, fun, and great tasting lollicakes throughout the country!

Inihauz Your Roast Specialist – It is said that the strength of a brand is measured in the loyalty of its customers. If that’s the case, then INIHAUZ YOUR ROAST SPECIALIST is a strong brand indeed. First established in March 2003 as D’Champ (Lechon Manok atbp) by Mr. Conrado Posadas, it grew over a period of ten years into six successful branches around Marikina City. During this time, Mr. Conrado’s son Arthur was an active participant in the business. When Conrado turned over the reigns of the business to his son in 2013, Arthur decided to take the business to the next level. With the help of his wife Lirio and his friends William and Sherielyn Riego, one branch of D’Champ was renovated with a new look, new concepts, but with the same great taste that made D’Champ so popular. Thus the first INIHAUZ YOUR ROAST SPECIALIST was opened, and it stood as a testament to the quality of their product that despite the change in name, they not only retained their previous patrons, but gained whole new ones with their expanded range of product offerings. Soon enough, the inquiries for franchising came in, and after consulting with experts, INIHAUZ YOUR ROAST SPECIALIST is proud to announce that it is now open for franchise!

With their entrepreneurial spirit, unique concepts & ideas and world-class advise from franchise consultants such as Francorp, these home-grown brands are continuing to grown and become the next Kings & Queens of Kiosks.

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The best business defense is a good franchise offense

By Sam Christopher Lim
Senior Vice President, Francorp Philippines

It is a well-known strategy in basketball that the best defense is a good offense. As dozens of global name brands sprout out in Metro Manila – the likes of Uniqlo, Cotton On, Forever 21, Miss Selfridge, Superdry, American Eagle Outfitters, H&M and Sperry Top Sider are taking prime spots high-end and mid-end malls. While a lot of local apparel brands have started to defend their market, some have taken the opportunity to prepare to go on the offense and look to expand into international markets.

The entry of international brands have challenged our local apparel outlets to level up and because Filipino consumers love design and quality which are both present in global and local brands, they are willing to purchase both. And with the growing consumer power and fashion-conscious outlook of the middle class, especially the young professionals, apparel will always enjoy capturing a sizeable chunk of the market.

According to the Euromonitor International Report, though online retailing of clothes is getting to be popular, buyers still want to go to stores and experience fashion for themselves. Department stores or boutiques are still the destination if one wants clothes, sportswear, and footwear.

Retail Franchise, Fashion Franchise, How to Franchise your business

With a rosy outlook in the fashion industry, many Filipino brands are confident about their prospects. One of them is Pois Belly and Kids which houses three fashion-niche brands – Pois, Belly Maternity, and Great Kids . Pois Belly and Kids is committed to building a world-class brand and continuously cater to the dressing needs of fashionable tykes and ‘tweens as well as expecting moms.

From a home business in 1999, selling a maternity line called Great Expectations to friends and family, it gradually expanded into girls’ wear. In 2004, in view of the demand for good quality and stylish fashion clothing for children, the Great Kids brand of apparel was conceived to cater to mini fashionistas aged 2-12 years old who look up to and want to emulate their stylish mothers. Great Kids was a hit for parents and their girls as the brand not only provides an extensive range of choices but also boasts of quality and comfort (clothes are mostly made of imported, high quality, breathable cotton and bottoms have adjustable waist systems).

Rowena Velasco, president, explains that in 2006, the brand Pois was conceptualized after much demand from loyal customers who have “graduated” from the Great Kids children’s sizing. Pois is a play on the English word “Poise”. Without the “e”, the name evokes curiosity and reflects a playful and yet sophisticated touch – apt for ‘tweeners who are enjoying the in-between years of childhood to womanhood. Pois is a range of pretty and fun fashion that reflects the light-hearted mood of the ‘tweens and teens.

Now, with the help of Francorp, Pois Belly and Kids is “poised” for greater growth through franchising. With over 33 stores, a franchise program developed by international experts and world-class franchise operations manuals, Pois Belly and Kids plans to continue expanding locally & internationally through franchising, Pois Belly and Kids will continue delivering a stamp of unique beauty and craftsmanship that only a Filipino apparel boutique can boast about.

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Francorp brings regional flavors national through franchising

It is an exciting time to be an entrepreneur in our provinces. There are many food enterprises today that were once confined to towns but are now tourist destinations. And despite numerous foreign restaurants entering the Philippines, Francorp has been helping provincial concepts go from towns to city centers through franchising.

The Country Store of the Bohol Bee Farm

The first outlet of The Country Store is nestled within the homey and relaxing Bohol Bee Farm, an apiary-cum-agriculture farm resort in Dauis, Panglao Island, Bohol. The resort serves delicious, big portioned meals from organically-grown vegetables and fruits, 100% natural and without preservatives.

After meals, diners do not miss The Country Store of the Bohol Bee Farm for its healthy and mouth-watering array of organic goodies – squash muffins, vegetable lasagna, camote or sweet potato bread served with pesto and honey spread, special coffee from roasted corn and wild berries, organic garden salad (with edible flowers), mustard honey dressing, malunggay or spicy ginger ice cream on cassava cone, lemongrass (tanglad) juice, gumamela hot tea, to name a few.

The owner, Ms. Vicky Wallace, a balikbayan nurse, set up the farm with the cafe and store to advance her advocacy of helping local farmers by marketing the products of the Bohol Bee Farm and other local growers. The organic harvest is used in their cafe which have branches in the Island City Mall and Loboc Tourism Complex in Tagbilaran City, the capital of Bohol.

Franchisees can bring to Manila and all over the Philippines the to-die-for feast of healthy viands and beverages from The Country Store of the Bohol Bee Farm that are all so distinctive, refreshing, and made from organically grown ingredients. The store is a clear signal for other business owners to know that going green, organic, and natural can be very profitable.

Ilaputi

The unusual name of this Asian fusion restaurant, one of the newest top food destinations in Cebu, is actually a phrase in the Visayan dialect. When a Cebuano asks “Asa ta kaon?” or “Where do we eat?,” one answers “Ila Puti” referring to the place of Chef Jan Rodriguez, nicknamed “Puti” because of his fair complexion.

The beginnings of the restaurant and its chef are as amazing the dishes which he serves, all of which have a story behind them. Started in 2002, Ilaputi used to be a humble 35-seat carinderia across the University of San Carlos in Talamban, Cebu. The daily line-up of ready-cooked meals was just four dishes, freshly cooked from the kitchen: Silog Special, Peking Pork, Katsuto, and Teriyakatsu.

Today, 12 years into its existence, Ilaputi has become a favorite dining spot in one of the city’s upscale addresses, Asiatown Cebu IT Park, and is now renowned for its fast casual gourmet comfort food made from the freshest ingredients. The classy interiors and light music add to the cozy ambience – just the right setting for a sumptuous, reasonably priced, and surprising mix of dishes.

Jan started cooking when he was in U.S. as an outlet for his creativity, and coming home, continued to whip up dishes for family and friends. From out of his kitchen came out an eclectic mix of flavours that are pleasant to the palate.

His best sellers are Pasta Puti, Beef Stroganov, Chicken Jambalaya, and many more which only Chef Jan can concoct. Customers crave for Saigon Adobo and Vietcondobo Sandwich, Sakana tempura, Mexcebuano Chicken, Chikari, Kari Kulkarni and more. The appetizers alone are fully satisfying – Skin-On French Fries; Buffalo Chicken Fingers, Beef Mediterranean Salad or Phoenix Mandarin Salad.

Downed with refreshing pink lemonade, iced tea, or fruit shakes, a compleat meal caps the diner’s experience. For those who like to try their signature drinks, Ilaputi serves 22-ounce blended beverages and house cocktails.

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