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

Franchise Hotline : (+632) 638.3149 to 50

Join “HOW TO FRANCHISE YOUR BUSINESS” Seminar 2016!

 

Franchise Consultant, How to Franchise your business, Franchise Seminar, Business Franchise Guide

HOW TO FRANCHISE YOUR BUSINESS SEMINAR 2016:

  • Apr 13 (Ortigas Center)
  • May 18 (Alabang)

Every journey begins with a single step – and for entrepreneurs looking to become the “Next Big Thing”, that first step is Francorp’s exclusive “Franchise Your Business” seminar. Francorp’s seminar is set in two parts. The first serves as an introduction to the franchising model of business expansion, and will answer the basic and most important questions like what franchising is and the pros and cons of turning your business into a franchise, how to franchise your business and how to create a franchise business. The second introduces the advantages of franchising and what you need to know before you franchise. Both talks are comprehensive, in-depth, and feature concrete examples of businesses from both here and abroad.

Delivered by the top franchise experts, respected franchise consultants and certified franchise executives in the country, Francorp’s “How to Franchise Your Business” seminar is an invaluable investment for anyone looking to expand their business through franchising. In addition, seminar attendees are invited to a one-on-one business consultation after the event with Francorp’s business consultants. The consultation is for free, and serves as an opportunity for you to get real franchising advice for your business from the industry experts.

Francorp’s clients include some of the country’s biggest brands in food, retail, and services, who have become the benchmark that other businesses aspire to reach. But they all started small. So what are you waiting for? Take the first step towards the road to ultimate franchise success and register for Francorp’s “How to Franchise Your Business” Seminar now!

 

 

 

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2 Francorp Philippine Clients Win Global NextGen in Franchising Award

“What sets the next generation apart is their ambition & purpose.” With these words, the Philippine Franchise Association started its search for the next generation franchise leaders in 2015, and has culminated with 2 Pinoys being recognized as the Next Generation Global Franchise Leaders. In a franchise convention attended by over 3,000 delegates from around the world, Hans Yao, Owner & President of the Paper Stone and Joseph Calata, Owner & CEO of Calata Corporation were both awarded during the International Franchise Association Franchise Convention in San Antonio, Texas last Feb 20. Each winner was flown into the US to rub shoulders with top CEO’s and executives of the franchise world and participate in a franchise acceleration program that will help both companies grow locally and internationally.

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L-R: Franklin Go (Philippine Franchise Association Chairman), Hans Yao (President, the Paper Stone), David McKinnon (Chair, NextGen), Joseph Calata (CEO, Calata Corp), Chris Lim (Director Special Projects, PFA)

With over 100 stores, Joseph Calata’sAgri retail franchise aims to upgrade and professionalize the Agri retail industry and provide farmers with lower cost materials, and better knowledge of how to maximize their yield. With professional Agri technicians visiting various provinces and a call center that can answer any questions about the product & the business, the Agri franchise aims to be “be the 7-11 of the Agri-Retail industry,” says Joseph Calata in his pitch to franchise leaders and venture capitalists from around the world.

Franchise Consultant Philippines | Franchise Success Stories

Joseph Calata presents Agri to a group of international franchise leaders & entrepreneurs

Franchise Consultant Philippines | How to Franchise in the Philippines

The Paper Stone franchise, developed by Francorp Philippines Franchise Consultants

Hans Yao and the Paper Stone franchise, on the other hand, aims to bring back the joy & beauty into writing. “Remember the days when we actually wrote on notebooks, and collected pictures and memorabilia in a scrapbook?” he asks the audience as he presents the brand. The Paper Stone won the global award for its efforts in targeting millennials with constantly changing designs, a strong social media presence, and keen understanding of the youth market. With over 50% of Filipinos under 24, the Paper Stone has already grown to 9 stores in less than a year, and aims to reach 100 stores in just 5 years. With a strong franchise program developed by Francorp and a franchise market that continues to grow, both entrepreneurs continue to use the power of franchising to grow their businesses using other people’s time, money and people. And both entrepreneurs have once again proven that the Fiilipino entrepreneurs have what it takes to make it big in the global franchise stage!

 

For more information on franchising, Francorp is organizing “How to Franchise Your Business” seminars for entrepreneurs on March 15 and April 13, 2016. For inquiries, please contact 638.3149, email info@francorp.com.ph or visit www.francorp.com.ph .

Proudly developed by Francorp Philippines & its team of Franchise Consultants and Certified Franchise Executives. To learn more about how to franchise your business both in the Philippines and internationally, contact a Francorp franchise consultant or take a free franchisability quiz.

 

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360° Fitness Club: Beyond Working Out |Francorp Philippines Franchise Consultant

Four years ago, 360° Fitness Club revolutionized the local fitness industry by introducing and promoting a no-machine, total circuit body workout in thirty minutes. Efficiency was the key message: you can reap the benefits of a full body, complete workout in just half an hour and without the use of machines. It changed the ballgame because it challenged the traditional gym workout which was several hours working with weights and various machines just to achieve the level of fitness desired.

Over twenty five thousand individuals have tried 360° Fitness Club’s unique style of training since it introduced functional fitness regimens to the country. Now, other gyms have adopted this training method. 360° Fitness Club has paved the way and is constantly innovating on its fitness philosophy. Being fit and healthy is not the end goal; it is the means by aspirations are attained. It prepares people for something more important– life outside the gym. That’s what it means to Get360Fit.

Franchise Consultant Philippines | Franchise Success Stories | How to Create a Franchise Business | How to Franchise in the Philippines

360 Fitness Club, one of the most exciting fitness franchises in the Philippines

Building on the philosophy of an efficient workout, this was pushed even further. The training one gets at 360° Fitness Club is best suited for everyday living – simulating natural movements and addressing all muscle groups –preparing one physically, mentally, and emotionally for an active life.

Beginning with Efficiency, modules are short but effective, giving a full workout in half an hour for more time to pursue other activities. It mimics natural movements and engages the body the same way as everyday movements like climbing stairs, playing with kids, or lifting heavy items like a briefcase or backpack.

A Holistic approach is also taken so it’s not just bodies getting healthy, but minds and spirit as well. The programs aim not just to improve the body, but also to instill discipline and focus. Group classes and wellness talks create a fun atmosphere that encourages members to push themselves further while the programs adjust to each one’s fitness level as they get stronger. Coaches help members set goals for themselves that prepare them for life’s challenges– to be physically, mentally, and emotionally equipped to face them head on.

Dynamic comes in because the circuit program changes every three months to accommodate the growth of the individual. New group classes are also introduced periodically. For a program to be effective, it has to change as body and mind change.

How ready are you for life?”” That’s the question the club is preparing all members to answer confidently. As training programs progress and evolve with the individual, the fitness philosophy evolves as well. As we say at 360°: “We are in love with fitness. We believe in setting goals and constantly beating our personal records. We need to keep challenging ourselves and maximizing our potentials. Continuously trying to become the best version of ourselves is our never-ending goal. We are in love with fitness, because fitness is our way of life.”

Franchise inquiries are entertained at franchise360inc@gmail.com

 

Proudly developed by Francorp Philippines & its team of Franchise Consultants and Certified Franchise Executives. To learn more about how to franchise your business both in the Philippines and internationally, contact a Francorp franchise consultant or take a free franchisability quiz.

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From 1 Burger Stand in a Lucena Street to over 850 Outlets in Luzon

From 1 Burger Stand in a Lucena Street to over 850 Outlets in Luzon

L.C. BIG MAK MAKES MAJOR INROADS IN FRANCHISING

Someone once said, “The journey of a thousand pounds begins with a single burger.” For a couple in Lucena, a single burger took them to a journey of almost a thousand vans that has reached millions of happy customers to date.

Francis and Edna Dy sold their first burger 31 years ago, from a mobile van along Quezon Avenue corner Rizal Street, in Lucena City. Edna smilingly recalls the long line up of people along the avenue, queuing for a P3.00 burger to satisfy both hunger and “curiosity”.

The hamburger mobile van was just a simple idea that one day crossed Francis’s mind. Never did he know that that day, their success story is about to unfold.

Not a cook himself, Francis admits his big love for food (and eating) was the inspiration in giving birth to LC Big Mak. He took a chance in bringing his brand and concept alive during the era when American comfort food was running its course in the Philippine market.

Edna, a natural business woman and the hands behind Big Mak’s burger patty, recalls supporting the entire crazy yet exciting idea of the Hamburger Mobile Van.

The name LC BIG MAK INC. has a lot of history to it. LC is Lucena City where it all started. Big buns and big patties is the BIG in the brand name. MAK came from the initials of Mr. Dy’s parents, Maxima and Kimsuy.

For the couple, it should not just be about “good burgers”. LC Big Mak Burger is about satisfying Juan’s taste for real American burger but made more delectable with a mix of Pinoy flavors.

The journey isn’t as smooth at it seemed. But perseverance prevailed. LC Big Mak has come a long way since the time they only had one grinder and used margarine caps as pattern for making patties. It took a lot of hard work, patience, strength and faith in God to grow LC BIG MAK INC. to its present strength of more than 850 burger vans and 12 stand-alone branches, all grilling nationwide.

The fast food sector in the Philippine is on a rapid growth spree with demand for fast-and-easy-to-eat food such as burgers and sandwiches also expanding.  With this, the market’s expansion potential is hungry which is why LC Big Mak is steadfast on its move to wider expansion of its brand, products and services.

Thus, after 30 years of dominating South Luzon’s food scene, Francis and Edna, brought in a new breed of LC Big Mak managers – their children, Mark Francis, Dave Francis, Margaret Ley and daughter-in-law, Charmaine. Together , they thought of franchising this year, to bring forth LC Big Mak into the national landscape.

With their children at the helm, a new image for LC Big Mak was introduced that reflected their modern take on the business,  while honoring the values and attitude they learned from their parents.

Partnering with the world class Francorp Philippines, to infuse the needed franchise expertise, the Dy family have big hopes that LC Big Mak will penetrate larger territories, including Metro Manila, and key cities in Luzon, Visayas and Mindanao.

Big burgers, as its core product, make the LC Big Mak franchise business simple, and easy to operate. Aspiring franchisees can easily own a franchise at a very cost-friendly franchise fee of P150,000 only.

For Francis and Edna, LC Big Mak burgers are made famous with this success equation: FAST SERVICE + GREAT TASTE + AFFORDABILTY. It’s not just about good food or service per se. Standards should always be kept in mind and best practices fulfilled at a constant.

With years of proven expertise as a family in the field of business, food, manufacturing, hotel management, manpower, trucking, and trading, the Dys are well on its way to taking off LC Big Mak from that street in Quezon corner Rizal Street in Lucena, not just nationwide fame but even international.

For franchise inquiries call Ms Rachelle Canuto, # 0998-842-2454 or email bigmak.marketing@yahoo.com.

Proudly developed by Francorp Philippines & its team of Franchise Consultants and Certified Franchise Executives. To learn more about how to franchise your business both in the Philippines and internationally, contact a Francorp franchise consultant or take a free franchisability quiz.

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NxtGen entrepreneurs bring new levels of ambition and purpose to franchise industry

“What sets these next generation apart is their ambition and purpose.” With this, Sam Christopher Lim, project lead for NxtGen, opened the night for the first ever “NxtGen in Franchising Award.”

Led by the Philippine Franchise Association (PFA), the “NxtGen in Franchising Award” seeks to promote franchising as a tool to accelerate business growth and recognize the brands and businesses that can scale up through franchising. It seeks to recognize young entrepreneurs who can be the next franchise leaders in the industry.
“When you look at businesses today, they look at hundreds to thousands of stores, and look at their market not in terms of the hundred million in the Philippines, but the hundreds of millions in ASEAN and internationally,” Lim said.

This ambition was seen in the night’s overall winner, Agri, a one-stop agriculture shop, represented by its owner, Mr. Joseph Calata. With over 100 stores, it continues to use franchising as a tool to accelerate their growth nationally. 360⁰ Fitness Club, a locally developed fitness club concept aims to conquer Southeast Asia through its fun, fast and effective fitness work outs. “We’ve started to join international shows and events and plan to expand first into Thailand and then to the rest of Southeast Asia,” said Joanna Pinon, co-owner of 360⁰ Fitness. While Homer Alvarez, owner of BluNektar, started as a bartender on a cruise ship and used his experience in creating concoctions to offer unique cake shakes. He dreams of catapulting his brand to be a recognized and respected beverage chain in the country.

But what sets these next generationentrepreneurs apart is their sense of purpose, of truly doing something to improve their customers’ lives and the community where they operate. They have a social mission that is integral to their business, and is not just embarking on another CSR project. Happy Helpers is a social enterprise that provides reliable and quality home cleaning services and at the same time, provides livelihood opportunities to women in living in Gawad Kalinga communities. The Paper Stone uses eco-friendly materials with the cheeriest, liveliest, and cutest designs for stationeries, journals, pens, and other quirky items. Another finalist, a high quality, but affordable skin andbeauty service center, aims to ensure that “that feeling and becoming beautiful is not a privilege but a right,” saysJasmine Sarmiento, owner of Beauty & Beyond from Cebu.

With the next generation’s continued sense of ambition and purpose, the Philippine Franchise Association hopes to continue to inspire more entrepreneurs to use franchising a tool to expand both nationally and internationally, and to follow the footsteps of Jollibee, Max’s, Bench, Goldilocks, and put more Filipino brands on the global map.

The NxtGen in Franchising Award is the first phase of the global search for the next generation of franchisors. To join the international contest and get a chance to win a trip to the United States together with an opportunity to network, make a pitch, and promote their ideas and concepts at the Next Gen in Franchising Summit to be held in the U.S., apply at http://nextgenfranchising.org/. Deadline is on October 30, 2015.

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Franchising Tip: Read your franchise agreement

By  Noel Siggaoat, Managing Director, Francorp Philippines

Buying a franchise, especially for the first time, is a major life decision for most people. It requires a huge commitment of time and money and often results to a major change in lifestyle. Although it requires a leap of faith in order to execute, it also requires a lot of careful thought and deliberation.

Surprisingly, many would be franchisees do not exercise the necessary diligence in studying their franchise agreement before signing. Yes, they read the major provisions like royalties, franchise fees, contract terms, and others but they never really go beyond those or at least scrutinize the relevant provisions as deeply as they should.  Sometimes, they are intimidated by the sheer volume of legalese found in a franchise agreement. Some just put their blind trust in the franchisor. The naivete comes back to haunt them later on when they realize they have agreed to something that becomes difficult for them to comply with.

These are some of the provisions in franchise agreements that franchisees take lightly or tend to underestimate the significance of:

Supply arrangements. Franchisors usually require franchisees to buy products from them or from approved vendors only. This is to ensure the quality and consistency of the products or services being sold in the stores. Franchisees should look more closely into these provisions because their margins and, therefore, their profitability could be compromised if these are not priced fairly. While it is normal for a franchisor to require certain items to be purchased from them, the prices at which franchisees buy these items should be competitive with sources outside the system.  The transfer price at which these items are purchased should give the franchisee adequate margins. Since the franchisee is legally bound by the franchise agreement to buy these items from the franchisor, he will not be able to buy from other cheaper sources; otherwise, he will then be in violation of the franchise agreement.

Renewal and related fees. In considering a franchise investment, would-be franchisees look very closely at how much money they would have to raise in the beginning for the initial investment. They scrutinize this figure and compute when they will get a return on their investment. What they fail to take into account is that later on, they may have to spend additionally to renew the franchise after so many years. A renewal fee might be required to continue the business past the initial term of the agreement. The franchisor may also mandate that the store be renovated as a condition for renewal.

While it is normal for businesses to renovate their stores to keep it looking fresh after so many years, would-be franchisees should try to get an idea to what extent the future renovations will be. Would this entail merely repainting and replacing worn-out fixtures, or does this entail a complete redesign of the store and installing major equipment?

Will the Franchisor charge a renewal fee? At Francorp, we usually recommend to our franchisor-clients not to charge renewal fees since there are very little costs associated with renewing an ongoing franchise unlike in the beginning where a franchisor incurs substantial costs in evaluating, training, and marketing to a new franchisee. A would-be franchisee should find out whether or not a renewal fee will be charged.

Territory provisions. Is the franchisor giving exclusivity to a location, or is he giving rights of first refusal? Exclusivity means no other store – franchisee or franchisor-owned – will be allowed to open in the franchisee’s territory. Rights of first refusal to the territory mean that the existing franchisee will be given the option to invest in an expansion store in the territory. If he foregoes that option, the expansion store may be offered to another franchisee or may be owned by the franchisor. This new store may cannibalize some of the first store’s sales and even some of its customers. A would-be franchisee should look closely as to what his rights and privileges are with respect to the territory he is operating in.

Return of Investment. While the Return of Investment figure is not indicated in the franchise agreement per se, it is a figure that would-be franchisees tend to misunderstand.  When marketing their franchise, companies usually quote an estimate of when the investment in the franchise will be recovered by the franchisee. Many franchisees believe that these figures will happen with certainty. However, these are based on certain assumptions happening.  Ideally, these figures are a historical average of what other stores in their system have experienced. Sometimes though, these could be projections based on ideal situations, or in worst cases, they are merely numbers based on wishful thinking. Would-be franchisees should find out what the basis of these numbers are and make their expectations accordingly. In Francorp, we use historical sales data in projecting future sales and consequently, return of investment figures. This way, clients’ franchisees will have realistic expectations regarding the viability of their investment.

In general, franchisees should do their due diligence before entering into a franchise agreement. They should look into all aspects of the franchise. They should not be afraid to ask questions. The only stupid questions are those that are not asked. If they are not comfortable with reviewing legal or business plans, they should get legal or business advice from those able to guide them. If there are any provisions or policies that they are uncomfortable with, they should discuss these with the franchisor or try to negotiate before signing the franchise agreement. Once the franchise agreement has been signed – or any agreement for that matter – the franchisee will not have a lot of leverage to negotiate with. They should not accept as gospel truths the numbers quoted them but use their judgment in assessing the soundness of those figures.

Would-be franchisees should also try to talk to current franchisees of the company. Find out if they are happy with their investment. Knowing what they know now, will they invest in the same franchise all over again?

Reviewing the franchise agreement with due diligence does not always guarantee a happy ever after in franchising. But instead of a leap of faith, going into a franchise becomes a careful, calculated step.

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Franchisor Concern: Will My Franchisee Compete With Me?

By Manuel V. Siggaoat, CFE

Managing Director, Francorp

As a consultant, I talk to several people a week who are thinking about expanding their business through franchising. For sure, there are many advantages if done correctly. After all, franchising has already helped many companies grow. However, one of the most common fears would-be franchisors have is whether or not they are just teaching franchisees the business know-how that will eventually be used to compete with them.

“What if I train my franchisee and he uses that knowledge to put up his own business and compete with me? Am I digging my own grave with franchising?”

This is a valid concern. To be honest, I have seen cases where this has happened. I have seen franchisees, disgruntled and disillusioned with their franchise investment, put up a competing business and go head-to-head with their franchisor.

However, this is something that is preventable. Here are some safety nets to discourage franchisees from turning against their franchisor.

 

1. Include a Non-Compete clause in the Franchise Agreement

A Franchise Agreement should include non-compete provisions within the contract. Basically, this provision states that the franchisee should not put up or invest in a business that competes with the franchisor’s business. The franchisee is bound from doing so (a) while the franchise agreement is in effect, and (b) some years after the franchise agreement has expired.

 

While including a non-compete provision will help, it is not enough. I will not go into details but there are several ways a franchisee can circumvent this provision. So in other words, a non-compete clause is a necessary but insufficient provision – it should be found in a franchise agreement, but by itself will not prevent franchisees from competing with a franchisor.

Besides, non-competition provisions are not in effect forever. They expire a few years after the end of the agreement.

 

2. Give Continuing Value

A better way to keep franchisees from competing with a franchisor is by providing continuing value. This means that aside from use of the name, the franchisee benefits from products and services that the franchisor provides during the course of the business.

 

2.1 Proprietary Products

Not teaching franchisees everything about the business is one way to keep them from using what they learn against you. The franchisee is dependent on the franchisor to supply proprietary products and services. Proprietary means those relating to the ownership of the brand or business. These are usually related to the franchisor’s intellectual property, like recipes and branded merchandise.

Instead of giving the entire recipe to the franchisee, franchisors may provide ready-to-use sauces, mixes, marinades, etc. to the franchisee. For retail concepts, franchisors provide branded merchandise, meaning those products that contain the brand’s logo.

Since these are proprietary items, they are available only from the franchisor and cannot be bought in the open market.

 

2.2 Killer Support Services

Franchisors are supposed to provide ongoing support to franchisees. For the purposes of this discussion, killer support services are those that are so outstanding and very critical to the franchisee’s business, yet very expensive or difficult to do on his own (in the computer industry, a killer app is a software so compelling it makes consumers want to get the hardware just to be able to use the software).

For example, a topnotch business intelligence software that provides data for making critical business decisions at the unit level can be a source of competitive advantage. Since it may be very expensive to install on his own, a franchisee would be discouraged from scaling this high barrier to entry.

A world-class marketing program is another example of a killer support service. Especially if the program is highly effective and brings business to all units on a consistent basis.

If franchisees rely on these killer support services for their business but find it difficult or very expensive to replicate on their own, then a franchisee will stay within the fold.

 

3. Keep Franchisees Happy

There are several legal and structural ways to keep franchisees in the system. But I’ve seen that the best way to keep franchisees from competing with their franchisors is by keeping them profitable and happy. If a franchisee is profitable and is happy with the relationship with the franchisor, he would not think about bolting the system and putting up a competing business. He may, in fact, even invest in an additional unit, become an area franchisee, or encourage other investors to become franchisees themselves.

Financial and strategic planning for the franchise business is therefore very crucial. The franchisee fees, royalties, markups, advertising contribution and other fees charged by the franchisor should be well within reason. Considering expected sales and relevant expenses, the profits and return on the franchisee’s investment should be attractive. The way a franchise is structured should result in a win-win arrangement, where both franchisor and franchisee benefit.

Sometimes, not all plans come to fruition, though. As the saying goes, the best-laid schemes of mice and men often go awry. The most well-thought-out business plan may not work because of unforeseen circumstances. What is important when that happens is how the franchisor will go the extra mile to help the franchisee cope with the crisis, or how fair his exit strategy for the franchisee is.

To summarize, a franchisee can be a franchisor’s worst enemy or best business partner. It depends on how the franchisor structures his franchise and how he manages the relationship with the franchisee.

 

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Franchise Na Ta! – Francorp conducts franchise seminars in Bacolod

Franchise Kapihan Negros 2

Franchise Na Ta!

Dumaguete, Iloilo and Bacolod

Franchise Kapihan Negros!

August 22, 2015

Saturday 9am – 12nn

L’Fisher Hotel, Lacson St. Bacolod City

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Top Franchising Trends in 2015

TOP FRANCHISING TRENDS in the Philippines 2015
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.

Recent Francorp clients in this category are 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.

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.

Francorp clients who have adopted this strategy aside from The Generics Pharmacy are PR Gaz Haus, and Holcim Cement.

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.

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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New Scenery in Franchise Retail

Local retailers are bracing themselves because with the dawn of the ASEAN Economic Community (AEC), our local consumers will eventually be exposed to heretofore unseen products, marketing schemes, promotional gimmickry, payment modes and many others that have already taken place in our sophisticated neighbours’ retail domains and which they may bring here.

Pretty soon, there may be consumer experiences like what the Financial Times describes as “pop-up stores to satisfy demands for immediacy and surprise.”  According to Spire Research, to create instant buzz using short-term leased space and cost-effective ways for new products, a theme is created for each floor display which is sponsored by a brand.  

Crowd funding is also getting to be popular among start-ups because people with good business ideas can get funding to launch their concepts. The crowd funding research firm, Masssolution, said 600 global crowd funding platforms raised US$5.1 billion in funds in 2013, up from the 308 made in 2012 which raised US $2.7 billion.

The Financial Times also cites the trends towards more regional trade hubs where there will be reshoring or production close to markets, as well as more intra-regional investment flows and trade that will shift economic power from West to East and North to South.  With its huge potential for economic power, the ASEAN will eventually be a testament to this.

Traditional retail models in the Philippines has not yet broken down because Filipinos still prefer to go to stores, especially in malls, to feel the thrill that go with canvassing, window shopping, and ultimately, buying. Although online marketing and consumption have gained popularity in the last decade, we still enjoy the mall ambience, perhaps make our senses enjoy the sights and sounds, and then buy what we need or don’t need. The middle class, with its burgeoning consumption power and young demographics, are at the forefront of the buying frenzy. Brands which have benefitted from this growing base are the following:

 

YOUR OWN TIME (Y.O.T.), ITS FRANCHISING TIME HAS COME

 

Those mechanical gadgets called wrist watches or pocket watches used to be just functional time pieces. Through centuries, these watches have evolved to become objects of desire, necessity, and fashion. There are now a variety of commercial watches, leisure and fashion watches, and sports watches. If these are not on everybody’s wrists, they also appear as pocket watches, in pendants, in the car dashboard, in one’s personal computer and lately, as an ubiquitous feature of smart phones.

Most of the important players in the global watch industry are in Switzerland, Japan, Hong Kong, and Mainland China. New names have come in and are starting to create buzz such as the number one selling brand in Brazil.

Your Own Time (Y.O.T.) arrived in the Philippines in 2009, glowing with youthful, bright, and cheerful appeal. The young especially fall for its interchangeability, making it perfect for fashion and easy on the yuppies pockets.  One Y.O.T. kit contains one watch and 5 different cases, bracelets, and bezels. Imagine getting 125 watches for the price of one, to match any personality or style.

Y.O.T. is designed to be worn by both men and women, making it an accessory that can be shared. It is presently enjoyed by fashionistas in Latin America, Europe, North America, the Middle East, and in the Philippines, where 10 outlets have been opened.  It is now a franchise business beckoning entrepreneurs who want to join the global watch revolution. The Y.O.T. franchise is a turn-key package for a kiosk inclusive of franchise fee, construction of its signature kiosk, and initial inventory. With the enormous youth population, the market potential for Y.O.T. is as huge. Franchisees In Luzon, Visayas, and Mindanao are invited to bank on this franchise and their time starts now.

 

POIS BELLY AND KIDS

 

The race is on between homegrown brands and international apparel brands who are now competing on a level playing field because of the entry of well-known clothing lines from all over the world into the Philippines.  Since 2012, global name brands have started sprouting in Metro Manila– the likes of Uniqlo, Cotton On, Forever 21, Miss Selfridge, Superdry, American Eagle Outfitters, and Sperry Top Sider are in high-end and mid-end malls.

The situation has 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 July 2013 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.

With a rosy outlook in the fashion industry, many Filipino brands are confident about their prospects. One of them is Pois Belly and Kidswhich housesthree 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 that Pois Belly and Kids is “poised” for greater growth through franchising, expect more stores that would reflect the stamp of unique beauty and craftsmanship that only a Filipino apparel boutique can boast about.

 

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