Month: January 2019

7-Eleven opens store in Samal

Philippine Seven Corp., the exclusive local licensee of convenience store chain 7-Eleven, continues to expand its franchise operations in the Mindanao region with the opening of its first store in Samal Island.  The new outlet, franchised by Jonathan Santos, is located along Babak-Camudmud Rd., Igacos, Davao del Norte.

PSC said that apart from the Samal Babak outlet, it was also eyeing to open two more stores in other trade areas in Samal this year, namely Wharf and Peñaplata.

Samal is part of the Metropolitan Davao area and is two kilometers away from Davao City, the largest city and the primary economic center of Mindanao.  PSC operates a total of 220 stores in Mindanao, with 144 franchise-owned and 76 corporate-owned outlets. 7-Eleven offers suitable partners two ways to benefit from a proven system: Regular New Store Franchise (open a new 7-Eleven store), and Property Conversion (convert an established business or properties into a 7-Eleven franchise).

*this article was copied and originally published in Manila Standard , last January 26, 2019  and can also be found at  http://manilastandard.net/business/biz-plus/286258/7-eleven-opens-store-in-samal.html

Franchising 201

PFA chair emeritus Samie Lim talks about the nuts and bolts of the thriving sector
/ 05:06 AM January 25, 2019

Samie Lim is the cofounder and chair emeritus of the Philippine Franchising Association (PFA) and the Philippine Retailers Association.

He is also the chair of Francorp Philippines and U-Franchise, the largest franchise consulting company and franchise brokerage company, respectively, in the Philippines.

Here, he talks about the franchising sector and ways to meet the income potential.

Q: What common traits should franchisors look for in leaders within their franchisee’s organizations? What are no noes?

A: Leaders of franchisees need a good balance of entrepreneurial ability and a willingness to listen and follow best practices. Strong franchises are built on franchisees who are able to execute best practices while adapting to their local contexts. Franchisee leaders cannot just rely on the franchisor or their team to do everything for them, they need to be the ones leading from the front line, motivating and monitoring their team.

As strong leaders and entrepreneurs, franchisee leaders tend to have a lot of new ideas and innovations, and it is critical that they have a strong relationship with the franchisors so these ideas can be evaluated and discussed. In fact, one of the biggest innovations of McDonald’s, the Fillet-o-Fish, was developed by a franchisee.

A big no-no is for franchisees to implement major changes in the products or systems without having proper discussions with the franchisor as this leads to inconsistencies in the brand experience for consumers, thus affecting the brand as a whole.

Q: What would be the ideal minimum time a franchisee should spend in their franchise before sales and profit starts to deteriorate? Can you share the top five key tasks they should do routinely as good business practice?

A: Although franchising has a 90 percent success rate, it is still critical that franchisees spend time managing the business. This does not mean being in the store ever single day, but being present to take charge of key aspects of the business. Depending on the size of scale of the business, franchisees can spend a few hours a day to a few hours a week on the business. Key tasks they need to do are to:

Set targets and evaluate the financial performance monthly

Regularly visit the stores to do quality and procedural audits

Speak to customers to get first hand insights and observations about the business

Hire and motivate the right team to run the business

Regularly discuss with franchisors and fellow franchisees on new best practices

Q: Some franchisors, like the Potato Corner, are starting to allow employees or busy individuals to be franchisees but management remains with the franchisor. Will you see more franchisees like this? Why or why not?

A: Franchising is about using other people’s money, time and networks and this has been the success formula of franchising over the past 20 years. As franchising has matured in the Philippines, there have been a combination of innovative franchise management practices.

For organizations that lack capital but have an abundance of talent, franchising can be used to gain scale using other people’s funds to build new stores and set up presence in new markets while franchisors retain management control.

But for most large organizations, the key resource they lack is not capital, but hiring the right people. This is where franchising has a large advantage, as franchisors get access to owners who manage their stores, instead of salaried managers. So a lot of brands such as petrol stations and convenience stores have adopted company owned-dealer operated models where franchisors invest in capital, but franchisees operate the stores.

This gives exponential scale as it allows anyone, no matter what capital level they have, to be a franchisee as long as they exhibit strong leadership and management potential.

Q: For new franchisors, what are some of the most often neglected parts of a franchise contract and why are these important?

A: When getting into a business, entrepreneurs tend to be quite optimistic so rightly focus on establishing and growing the business. Because of this optimism, they often neglect an important part of the contract, namely the termination, renewal and relocation clauses. Strong franchise agreements should not only define the obligations of the franchisees and franchisors, but also the right processes and procedures in case the business does not do as well as initially planned.

Franchises can close because of many factors—from changes in the competitive landscape, changes in the foot traffic of the location or changes in the circumstances of the franchisees—so franchisees should know the correct remedies for these situations to avoid misunderstanding down the road.

Q: What do you think will be the effect of ease of doing online business on franchising?

A: Although online platforms will continue to rapidly grow, the trend globally is to have a hybrid of offline and online presence to maximize the business opportunities. Traditional brick and mortar franchisors have already started utilizing online channels to improve their reach.

What’s more interesting though is that we see online businesses tapping the power of franchising to create an offline store network. With brands such as Amazon and Zalora experimenting with brick and mortar stores, it’s only a matter of time for online retailers to realize that offline retailing can be done better and faster using other people’s money, time and networks. Franchising would allow online players to focus on their core competence in brand and product development, while their franchisees focus on store operational excellence that give the brand a good offline footprint.

Q: You and your colleagues are planning for the annual Franchise Asia Conference on March 27 to 28 and Franchise Asia Expo on March 29 to 31 in SMX MOA, what new things can people expect this year?

A: This year’s Franchise Asia will be the biggest one we’ve ever staged. Because of the tremendous success of the Franchise Food Park and Innovation Hub, we’ve increased the exhibit area by over 22 percent in the 2nd floor. This will allow attendees to see and experience more of the newest and freshest food franchise concepts. To keep the expo exciting, over 35 percent of the exhibitors will be new exhibitors and concepts. And to make it easier for people to attend, this year’s Expo was moved to March 29 to 31 instead of July so that more favorable weather conditions would allow more people from around the Philippines and from other countries to visit Asia’s largest franchise expo.

As for the International Franchise Conference (March 27 and 28), delegates can expect to hear from over 50 world-class international and local experts from Potato Corner, 7-11, McDonald’s, Jollibee, Happy Skin, Sunnies Studios, SM, Kantar World Group and more.  —CONTRIBUTED

Note: This article is copied from the Philippine Daily Inquirer published in the newspaper on Jan. 25, page B6 and is available online at https://business.inquirer.net/264106/franchising-201

Business beyond profit

By Bernie Cahiles-Magkilat

Young entrepreneur Beejay D. Burog entered the food business while still in college and left the business to her sister while he migrated to the US. Once again, his entrepreneurial spirit led him back to Manila to pursue the business hands-on.

Upscaled Foods, Inc., the mother firm, is among the pioneers in the Shawarma food business and one of the few that remain among the many specializing in the Mediterranean cuisine. They offer more Mediterranean food products now as they open new concepts and expand the business via franchising to share business opportunities to others.

KHALEB

According to Beejay, he went into business while still in third year college at UP Diliman where he was taking up hotel and restaurant management to augment her mother’s sari-sari store income.
Beejay was looking for an alternative to burgers and hotdogs, which were popularized by the two major fastfood chains, when he saw the emerging trend for Shawarma, a Mediterranean cuisine. Beejay decided to join the fray.

Beejay started his Khaleb Shawarma food cart in 2003 with his sister Marlene Varquez with P150,000 borrowed from his grandmother. Beejay serves as chairman and general manager while Marlene is president and CEO.

Beejay believes in the marketability of Shawarma because of the sheer number of Filipinos working in the Middle East and are familiar with the Mediterranean food. Besides, Shawarma is a complete meal with vegetables, meat and bread and it is for the individuals in a hurry.

“You don’t need to sit down, it is grab and go and suitable for students and working individuals,” says Beejay.

“Shawarma was like a mushroom at that time,” recalls Beejay. Shawarma became the town’s craze. They were among the pioneers, but most of their peers have scaled down while Beejay expanded his business nationwide.

As soon as Beejay was able to pay for the first outlet in Metro Manila, he expanded into his second outlet, until he came up with multiple stores. He also hired his professor to help run the business.

“It was tough but it was good because it helped when my mother was diagnosed with cancer,” says Beejay stressing that his mother’s illness has made them more determined to make the business work and grow.

Beejay, however, left for the US in 2008 to join his wife Mary Lyn. While there, he joined the corporate world and even ventured into a food business in LA and at times dabbled as Uber driver, but the business back in Manila beckoned. After spending eight years in the US, they finally decided to come back to Manila in 2015 because the expanding business needs his full attention.

They are back for good and Beejay is determined to establish himself in the business. They reorganized and created five corporations each working independently, but with specific functions to help the business grow under the parent company Upscaled Foods, Inc. One of these entities is Dynamic Entrepreneurs, Inc., the franchising arm of the group.

“We wanted to focus on the distribution, marketing and manufacturing so we went out of the box,” says Beejay.

Now, they have 60 branches in various formats – cart, kiosk, pop-up, in-line, counter, restaurant – and now a good mix of company and franchise-owned outlets.

The company, too, has expanded into various cuisines to Kebab and garlic sauces to offer variety but still in line with the Mediterranean food. They opened bigger stalls and space, evolving into its full menu dining restaurant called Khaleb Resto in 2017. Now, they have five Khaleb Resto in strategic locations in the metropolis.

FRANCHISE

“There is a good market here because it not hard to educate the people with so many OFWs working in the Middle East and Filipinos are already exposed and tried different kinds of cuisine,” says Beejay, who treats every food establishment as their competitors.

“We are doing great,” declares Beejay.

“Growth in sales last year already hit triple-digit,” adds Beejay.

The company has franchise inquiries from abroad, but Beejay said they cannot entertain them yet because they have to focus in the Philippines where they have more room for growth especially in the Visayas and Mindanao before they jump into a different world.

From the current 60 Khaleb outlets and 5 Khaleb Resto, they plan to reach 100 by March this year and as much as 200 by yearend as they opened more franchises in the south and Mindanao. A turnkey franchise range from P850,000 to P3.2 million.

Perhaps, Beejay said, in the next five years they may start to go international with Asia as the next sight.

This means most of the expansion will be through the franchises. These means also that they have to be selective in granting franchises.

Franchising is necessary and more practical especially for the far away sites. They also found out that franchises are able to post higher sales. This makes them more determined to offer sites to interested enterprises so they can concentrate as volume supplier for the requirements of their franchises.

But the couple sees franchising as more of sharing their blessings to others. “It is different to start a franchise because you help entrepreneurs roll out a business. We have the network, system and are all connected so we’ve opened a different world so they can grow,” he adds.

Franchising is tried and tested business model so this provides certainty to investors that they will grow as well.

“The direction is franchise as the key for our expansion,” says Beejay, who now employs 150 people.

PROFESSIONALS

To further improve the business, the company also got the services of Francorp Philippines, the country’s franchising authority, to perfect its franchise system, which made them all the more confident of sustained growth.

To further promote the business, the couple got the celebrity sisters Tony and Alex as brand ambassadors, who go out of their way beyond what the contract specifies to promote the brand.

To preserve its quality, they are more picky when it comes to supplies. They only use quality imported meat from Australia and Brazil and some spices overseas because they want to ensure they come up with the traditional Arabic flavor masala by using authentic spices.

In fact, he said, foreigners who have tried their products always thought of them as foreign brand or foreign owned. OFWs also said their food tastes like the Dubai shawarma. But Beejay also tweaks the taste a little bit to suit to the Filipino taste buds for salt with a hint of sweetness.

“That makes us different from other players,” he adds.

Beejay is not stopping from improving their services. “We will be launching our delivery service in February initially in Quezon City,” he adds as they have to perfect its system in partnerships with some logistics provider. The next target is Makati and Ortigas. With the delivery service, they may not need to open more outlets.

CHALLENGES

But there have been challenges along the way in the business, like the increases in food prices. To avoid this, Beejay said they have to ensure sufficient supplies good for six months to maintain stable cost for their franchises and ensure quality of products.

Thus, despite the rise in prices, they have maintained their own. They have P59 product as they also have P600 roasted chicken.

They also ventured into farming so they have steady vegetable supply at much better farmgate prices. They consumed a lot of carrots, tomatoes, onions and cucumber. Soon, they may venture into rice farming in partnership with some farmers as their food offerings come with rice.

Beejay said that this backward integration is going to shield them from inflation upticks as increase in prices can be alienating.

They also continue to train staff, especially that people get to move on in their careers although they have retained some of their employees, who started with them 15 years ago.

“Our mission has become to share our blessing to other entrepreneurs via franchising, we are creating employment even involving farmers. In a way, we are helping the government in terms of taxes and jobs creation,” says Beejay.

JOYS

Having a business of their own also allows Beejay to spend more quality time with family and their three kids.

In addition, “We can now help more people,” says Beejay as they collaborate with charitable organizations where they provide food. They supported a recent concert that raised funds for cancer patients.

“It is easier to reach out if you have your own business,” says Beejay.

The couple has learned a lot since coming home because the business has taught them beyond monetary rewards.

The couple has also become more agile and flexible as they deal with different kinds of people in their franchising business. They share the fears of risks of first-time franchises even as they try to explain and manage the expectations of the more excited and aggressive ones. Now, most of their franchises have multiple outlets.

“I think I learned a lot more than in my previous job. I learned about dealing with people, self-control, time management, and family relations,” says Mary Lyn.

For Beejay, “I’ve overcome being shy and how to deal with different types of people.” He learned the art of negotiating professionally, not outsmarting the other party but appropriately, by becoming more accommodating and being able to reach out easily.

“I’ve learned to be more adoptive whoever you may be because all inputs count. However small input that maybe but very specific input that means a lot because it could change our whole system,” says Beejay citing surprisingly very good inputs from their employees.

“We are very open to ideas, it is like am the eldest but even if I am the ‘kuya’ I still have to give way to suggestions,” he adds.

“Being in a family corporation, we are not just after profit for ourselves but we share with Filipinos our systems and thoughts and everything is a learning process. So, we are continuously improving not just for our own benefit but for everyone,” said Mary Lyn.

Business has become part and parcel of their family activities that even if they go malling or watch movie, it is automatic for them to drop by their outlets with the kids in tow.

“We’re working 24/7 as we answer emails and side calls even if we’re out of town to maximize time,” adds Mary Lyn.

Beejay has also learned that it is different when you are hands-on with your business. He has also learned to do the work of other people in the organization so that when an employee is absent, he can do the chore himself.

It has become a family ownership as family members come to help run the business aside from the professionals that they hired.

HOME

It has been four years since they came home from the US.

“We miss the weather and the environment but overall we are doing great. The opportunity does not come often so we have to grab this,” says Mary Lyn, who is now acting as the company’s official food technologist.

So far, so good, no regrets.

The Shawarma business has turned beyond profit.

*this article was copied and originally published in Manila Bulletin , last January 15, 2019  and can also be found at  https://business.mb.com.ph/2019/01/15/business-beyond-profit/

Shakey’s to deliver 20 new stores

By Arra B. Francia, Reporter

SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) plans to open 20 new stores this year, pushing its expansion outside Metro Manila as it sees more opportunities for growth in the provinces.

In a statement issued Wednesday, the casual dining restaurant operator said this will bring its total store network to 248 by 2019.

The listed firm is banking on higher consumer spending to support its expansion.

“We continue to see consumer spending fueling the Philippine economy, which is still one of Southeast Asia’s fastest-growing markets,” SPAVI President and Chief Executive Officer Vicente L. Gregorio said in a statement.

The target for store expansion this year matches the net openings the company had in 2018, 80% of which are located outside the National Capital Region.

“We are focused on expanding outside Metro Manila where we see great potential in terms of demand for the premium yet affordable dining experience we provide. We also tapped more local partners this year to run our provincial operations and to ensure that we have on-the-ground accountability even in farther-flung areas,” Mr. Gregorio said.

The company also noted that 75% of the newly-opened stores were franchised. Franchising a Shakey’s store entails an investment of about P18-24 million, depending on the size and location. SPAVI earlier said that the total investment can be recovered in three to five years’ time, with the franchise contract running for a minimum of 10 years.

In 2017, SPAVI said it looks to have a network of 300 stores within three years, further ramping it up to 500 within five years.

Aside from expanding its store network, SPAVI also redesigned interiors for the newer branches and launched new products to attract more millennials into their outlets.

“The brand has been able to stay relevant; it has gone through a lot of adaptations in response to the changing times, and our ability to touch lives has formed the foundation of our fiercely loyal base of guests,” Mr. Gregorio said.

SPAVI also owns the perpetual rights to franchise the Shakey’s brand in the Middle East, Asia excluding Japan and Malaysia, China, Australia, and Oceania. The company has at least 18 outlets in the pipeline in these locations over the next few years.

The company’s net income attributable to the parent went up six percent to P534.64 million in the first nine months of 2018, compared to P503.61 million in the same period a year ago. This followed a 10% uptick in gross revenues to P5.49 billion in the same period a year ago.

Shares in SPAVI jumped 1.95% or 24 centavos to close at P12.54 each at the stock exchange on Wednesday.

*this article was copied and originally published in BusinessWorld , last January 10,2019  and can also be found at  https://www.bworldonline.com/shakeys-to-deliver-20-new-stores/

The driving force behind Peri-Peri resto brand success

Bryan Tiu, president and chief executive officer of IFoods Group Inc. and also the man behind the success of Peri-Peri, tells entrepreneurs to embrace flexibility to weather challenges that come their way due to rising competition, changing market demands or increasing operations costs.

Tiu, who failed in his first entrepreneurial venture, has established 23 branches of the charcoal grilled chicken restaurant, his own brand name, all over the country and looks forward to adding more.

But before reaping success, Tui experienced failures. In 1996, Tiu, who was then 18 years old, opened a sub franchise with a major pizza brand. However, his small business ran right into the center of the Asian financial crisis.

“My first business venture ran into a bad timing,” Tiu said in a recent interview with the media during the opening of Peri-Peri’s 23rd branch in McKinley Hill.

After his initial setback, Tiu picked up the pieces and opened a Teriyaki Boy franchise in 2001 until 2005, when he had to discontinue the business since Pancake House has acquired Teriyaki Boy.

In 2006, Tiu established IFoods Group because he saw an opportunity in the Filipino consumers wanting for more options and that their purchasing power keep on increasing. So, he explored the casual restaurant segment. Tiu said he wanted to give the local market more options in the segment

IFoods is a 14-year-old company that develops local food brands for the mainstream market. Peri-Peri is the flagship of the group.

Starting with a single store at the Podium in 2005, Peri-Peri has a total of 23 stores in 2018. He added that 2018 has been an awesome year for the brand.

“Right now, we are 23 and growing. We have grown so much as a brand, and we will only keep growing in the coming years. Our success story is a strong testament to the trust and love the public has for Peri-Peri,” Tiu said.

“We will be aiming for the opening of 10 more stores in 2019. When we hit 23, the mall owners invited us,” Tiu added.

Tiu said the ideal ratio is 50-50 between company and franchise owned.

Since opening its doors in 2005, the restaurant has enjoyed consistent growth as it established itself as the go-to place for Charcoal Grilled Chicken, BBQ Back Ribs, and unique, character-filled sauces.

ABS-CBN talent Enchong Dee is one of the franchisees of Peri-Peri. He is also the endorser.

“Peri-Peri is such an easy place to get lost in. There’s the satisfaction of eating great-tasting food, the upbeat energy that grabs you the moment you step inside and the passionate colors that entice you—these things create such a distinct atmosphere,” he said.

“I hope that in the coming years, we will continue to grow and excite more taste buds, the way only Peri-Peri can,” he added.

Moreover, Dee’s love for the brand truly runs deep, as the actor is also a Peri-Peri franchisee of UP Town Center, Market Market and SM Megamall branches.

Tiu said the mall boom is also a growth driver for Peri-Peri as some of them expressed interest to invite Peri-Peri to open a store there.

Despite the entry of foreign players in the country, Tiu remains confident that Peri-Peri can withstand the competition. “I guess being a local brand, it is easier to understand the market,” Tiu pointed out.

The price points, according to Tiu, is not a big issue to Filipinos as they are now more capable to purchase products and, at the same time, are value conscious, especially the
millennials.

“The millennials are very conscious on the price and become picky in their hangouts,” he said.

Peri-Peri currently has branches in Nuvali Solenad 3; Alabang Town Center; Uptown Mall BGC; Greenbelt 3; Eastwood Mall; Capitol Commons; Megamall B; Promenade Greenhills; Evia Lifestyle Center, Las Piñas; Gateway Araneta Center; UP Town Center; Trinoma Mall; SM City Bacolod; Meerea High Street Mandaue, Cebu; Robinsons Manila, Brittany Square, Fairview; Ayala Feliz, Marikina; SM Marikina; Festival Mall, Alabang; Market Market, BGC; Banaue, Quezon City and Resorts World Manila.

The franchise fee is P1.2 million. Total cost for the construction of the store is P12 million.

 

*this article was copied and originally published in Business Mirror  last January 9, 2019 and can be also found at  https://businessmirror.com.ph/the-driving-force-behind-peri-peri-resto-brand-success/

Toby’s Sports opens flagship store in BGC

TOBY’S SPORTS has opened a new, innovative flagship store that highlights its long-standing commitment to elevating its retail experience to world-class standards.

Toby’s Sports held a special preview party of the new flagship store situated in the heart of the bustling Bonifacio Global City (BGC) last Nov. 28. The event, called “Pinnacle of Sports,” gathered celebrities, athletes, sports enthusiasts, and members of the media who had a first look at the new flagship store.

The 1,000 sqm, two-storey space houses a premium assortment of footwear, sports apparel and equipment from the world’s best brands. According to Toby Claudio, President of Toby’s Sports, “we wanted to create an iconic store, a pinnacle shopping experience in the heart of Metro Manila.” To achieve that, the store utilizes cutting-edge technology, such as stunning LED displays towering over 5th Avenue and multiple interactive touch screens that uses RFID technology to show information on its latest products. It also features various zones that create an experiential shopping experience:

PLAYZone. The flagship store features an interactive PLAYZone to host events and sports clinics on a regular basis. It also doubles as a basketball court, which utilizes a professional-grade basketball shooting machine, where people can hone their shooting skills. Prizes will be given out regularly to top scorers in the Toby’s Shoout game.

LAUNCHZone. As its names suggests, the LAUNCHZone will host product launches that feature the latest innovations from the top sports brands. Toby’s Sports also plans to use this area for curated installations, special VIP events and athlete appearances.

Toby’s Custom Lab. The Toby’s Custom Lab, located on the 2nd level, offers apparel customization services. With the capability to create full custom uniforms and jerseys, it will include express customization via sublimation, making a more personalized customer experience.

Run Signature Analysis. The flagship store offers Run Signature gait and running form analysis, from Brooks. It is a radical new approach to gait analysis that takes an in-depth look at the body’s natural running characteristics so that the store personnel can offer the ideal shoes to every customer.

 

*this article was copied and originally published in BusinessWorld last Dec 6, 2018 and can be also found at https://www.bworldonline.com/tobys-sports-opens-flagship-store-in-bgc/

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