Tag: Philippine Franchise Association

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

Expo seen to spur franchise investment opportunities

THE Philippine Franchise Association (PFA) is optimistic that the just-opened franchise exposition in Bacolod City will spur franchise investment opportunities especially for food, retail and service sectors in Negros Occidental.

PFA officials headed by their founding president and chairman emeritus Samie Lim and vice chairman Bing Sibal-Limjoco led the opening of the two-day Franchise Expo at L’Fisher Hotel.

Dubbed “Franchise Negosyo para sa Bacolod,” it will run until today, August 31.

Participated by 18 exhibitors in the country, the activity is part of the ongoing 27th Visayas Area Business Conference and Agriculture and Livestock Expo hosted by the Metro Bacolod Chamber of Commerce and Industry (MBCCI) and the Provincial Government of Negros Occidental.

PFA president Richard Sanz, in a statement, said the expo forms part of the association’s Franchise Negosyo Roadshow that aims to contribute to the economic development by providing business opportunities to the people in the regional areas.

“We are excited with our franchise expo in Bacolod City because it is one of the most progressive cities in the country,” he added.

PFA cited that in the Cities and Municipalities Competitiveness Index 2018 recently released by the National Competitive Council, Bacolod ranked first among highly urbanized cities in the Visayas and number eight most competitive city nationwide.

It is also this year that the city was awarded as “Most Business-Friendly City” by The Manila Times, the association said.

“It is a perfect time for Bacoleños to ride on the growth momentum. It will impact not only to their local economy but to the entire nation as well,” Johnny Que, PFA director for Western Visayas, said.

For his part, Bacolod City Vice Mayor El Cid Familiaran, who was also present during the opening rites, said the local government is optimistic that the expo will create new businesses and employment for the locals.

“This is a perfect timing since Bacolod is moving towards the direction of being the most competitive city in the country,” Familiaran said.

Also present during the opening ceremony were MBCCI president Roberto Montelibano, Department of Trade and Industry–Negros Occidental Director Lea Gonzales, Provincial Administrator Lucille Gelvolea and Silay City Mayor Mark Andrew Arthur Golez.

Still part of the “Franchise Negosyo para sa Bacolod,” PFA and MBCCI also conducted a seminar of franchising on Wednesday.

At least 40 local enterprises were taught on how to franchise business and how to invest in the right franchise.

Sibal-Limjoco earlier said current opportunities in franchising industry are growing, which small and medium enterprises (SMEs) in the province may take advantage of.

“The Philippines is now considered as the franchise hub in Asia,” she told SunStar Bacolod, adding that “Negrenses are really into entrepreneurship thus, franchising potentials are still huge here.”

Also part of the three-day 27th Visayas Area Business Conference and Agriculture and Livestock Expo running until today, MBCCI conducted the Aspire (Agribusiness Support for Promotion and Investment in Regional Expositions) Forum and Business Matching still at L’Fisher Hotel yesterday.

Aspire is aimed at integrating marketing development support services to farmers, fisherfolk, micro-small and medium enterprises (MSMEs) and other stakeholders.

National and local chamber officials also opened the two-day Agriculture and Livestock Expo at SM City Bacolod Activity Center yesterday.

The business conference proper is scheduled today at the said hotel, where Governor Alfredo Marañon Jr. will be the keynote speaker during the opening rites.

Plenary session topics include Philippine Constitutional Review: Proposals Affecting Economy and the Federated Regions, Neda Briefs: Information Needed by Business and Government Planners, Tourism Sustainability: The Boracay Experience, and Investing in Sustainable Tourism.

Senate committee on agriculture and food chair Senator Cynthia Villar will talk on Food Security and Government Interventions in Agriculture this afternoon.

*this article was copied and originally published in SunStar Bacolod, last Aug. 31, 2018 and can also be found at https://www.sunstar.com.ph/article/1761983/Bacolod/Business/Expo-seen-to-spur-franchise-investment-opportunities

PBB supports ‘Be the Boss’ at Franchise Asia Philippines 2018

Philippine Business Bank strengthens its thrust in supporting the small and medium enterprises by partnering anew with the Philippine Franchise Association in the recently concluded Franchise Asia Philippines 2018 held at the SMX Convention Center. The biggest franchise show’s theme — “Be the Boss” – reflects the contribution of the annual four-in-one franchise event to the efforts of the government and the private sector to generate more jobs and speed up inclusive economic growth through entrepreneurship. SMEs, PBB particularly provides support the fran- to chisees seeking to boost their businesses. As PFA promotes and sustains the growth of franchising as a tool for national development, PBB on the other hand, helps small companies make the most out of business opportunities as a one-stop-shop for all their financial needs. PBB currently has 154 branches, nationwide. Their newest branches in Ormoc City, Leyte and in Solano, Nueva Vizcaya opened today.

The event is joined by PBB’s Mindanao Region Head, Chief Marketing Officer and Business Managers

 

*this article is copied and originally published by Philippine Daily Inquirer on August 2, 2018 and is also available  at http://philippinedailyinquirer.newspaperdirect.com/epaper/viewer.aspx

PHL franchise industry seen to grow by 15-20% this year

July 5, 2018 | 12:08 am

By Janina C. Lim, Reporter

THE LOCAL franchise industry is confident of breaching the P1-trillion revenue mark this year as it aggressively positions the Philippines as the “franchise hub of Asia.”

“In 2017, the contribution of the franchise sector is $18.1 billion or almost P1 trillion,” Philippine Franchise Association (PFA) President Richard V. Sanz said during a press briefing in Makati City on Wednesday.

“Internally, we’re looking at 15 to 20% (growth)… I’m optimistic in a 20% growth” he told reporters separately, when asked for the growth forecast for 2018.

If realized, the sector’s 2018 revenues will reach $21.72 billion or P1.15 trillion.

The growth will be driven by the $3-billion investment it expects to generate solely from the Franchise Asia Philippines 2018 Conference and Expo, touted as Asia’s biggest franchising exhibit. The week-long event, which starts on July 18, expects to draw 60,000 visitors.

However, basing projections on a conservative 10% annual growth, the PFA said revenues will hit $24 billion or roughly P1.3 trillion by 2020.

At present, there are about 2,000 local and international franchise brands in the country, with 200,000 stores and employing 1.2 million.

PFA Chairman Emeritus Samie C. Lim noted the growing foreign investments in the franchising sector, describing the Philippines as “the apple of the eye of foreign brands.”

To further position the Philippines as an international franchise development center, Mr. Sanz laid down the PFA’s agenda for the next two years, with the globalization of homegrown brands as its number one priority.

“We have noticed that a lot of Filipino brands are ripe to be in the global arena. We have more than 50 Filipino brands globally. We want this to increase so this is something we are pushing for,” Mr. Sanz said.

He added PFA is looking to concentrate the expansion within the Association of Southeast Asian Nations (ASEAN) due to its close proximity to the Philippines.

Mr. Sanz said the group will also be supporting micro, small, and medium entrepreneurs through mentoring programs and regional trade shows.

“The small and medium agri-businesses, the farmers, can integrate their products into the value chains of the PFA members,” Mr. Sanz added

 

*This article is copied and originally  published by Business World  on July 5, 2018 and is also available online at http://bworldonline.com/phl-franchise-industry-seen-to-grow-by-15-20-this-year/

New PFA president sets 5-point mega plan

Jennylei Caberte (The Philippine Star) – July 9, 2018 – 12:00am

MANILA, Philippines — The Philippine Franchise Association (PFA) has set in motion a grand plan to help transform the country from a labor exporter to an economy that not only has enough employment opportunities for its citizens, but also would require foreign talents to fill up job vacancies.

Richard V. Sanz, PFA’s newly elected president, has laid out a five-point agenda which he  recently presented to the association’s members to boost the performance of the country’s franchising brands in the fastest-growing regions in the world.

The plan includes innovative initiatives toward national inclusive growth through job creation, further strengthening the competitiveness of Filipino brands, establishment and firming up of Filipino brands in overseas markets, enhanced  capability of micro, small and medium enterprises; and preparedness for full development of e-commerce.

Sanz wants the country’s  franchising industry to be an active player in the public-private efforts to achieve economic inclusivity, specifically by producing jobs for millions of Filipinos through entrepreneurship.

“I envision that one day, all Filipinos will be entrepreneurs and we will have to hire from other countries to fill up job vacancies. When that day comes, we will truly be a prosperous and developed nation,” Sanz said.

The CEO of FoodAsia Group and the founder of popular brands Bibingkinitan!, Lava Cheese Tarts, Papas Potato Chips, The BBQ Shack, Sanz aims to make Philippine brands stronger in the global market. “We also want to develop stronger presence for Philippine brands, not only in the ASEAN region, but also in the Asia Pacific area,” he said.

The 2017 World Franchise Council Comparison Data Survey report on franchise brands per country, indicates that the Philippines has about 1,500 brands, surpassing Japan (1,329), Russia (1,300) and Spain (1,232). South Korea has the biggest number of franchise brands with 4,844 followed by India (3,992) and USA (3,472).

Sanz also wants Philippine franchise brands to develop a global presence in other areas, such as Asia, North America, and Middle East where millions of Filipinos work, making them a rich market for Philippine products. He likewise noted the need for the country to step up and build more global franchise brands.

The US has the biggest number of international brands at 1,000, followed by South Korea, Japan and the European Union. At present, the Philippines has only about 50 plus brands operating in foreign soil. “The figures show we were still far away from becoming a major player in the global arena,” he said.

Sanz stressed it is logical for the PFA to give strong emphasis on Asia Pacific region since the country is strategically located in the area.

Philippine brands are world-class

Even before he assumed the reins of the PFA, Sanz already believed that Philippine brands are world-class, and can be at par with their global counterparts. “Given the right strategy, support and aggressive initiative, I think it is just a matter of time before we penetrate the international market,” he said.

The PFA president noted that the strategy of most local companies of focusing first in the local market also seems to have affected their competitive edge, and proved costly in the long run, or once they decide to expand their markets beyond the Philippines.

Sanz, however, recognizes that going global and developing the Filipino brand is easier said than done.

Hard work and perseverance 

Sanz said he learned and developed his penchant for hard work and perseverance from his mother Betty who single-handedly raised him and his brother Billy. A Bachelor of Science in Electronics and Communications Engineering graduate of De La Salle University – Manila, Rich as he’s fondly called by close friends, candidly shares that he was not born with a silver spoon. He recalls the many nights when he saw his mother finishing one sewing project after another using their old sewing machine, to support them.

There are several options on how Filipino brands can penetrate the global market, Sanz points out, and one way is to sell hamburgers, pizza and French fries, like what Jollibee, Yellow Cab and Potato Corner are doing.

To further add a quaint flavor to his food enterprise ventures, Sanz has pushed for the development of a local variety of Filipino kakanin, or snack food, the favorite bibingka rice cake which is now popularly known as “Bibingkinitan!” which name is partly derived from its slim dimension. With his entrepreneurial innovativeness, Bibingkinitan!, with over 200 branches nationwide has become a favorite snack food fare at all times, particularly during Christmas midnight mass in December. He was able to promote and market the famous snack in a fun and creative way.

Sanz and the PFA now also strives to further enhance the capabilities of the country’s micro, small and medium entrepreneurs, hoping that somebody from the group will emerge as the next Mang Inasal or Potato Corner.

“Bibingkinitan! started with a capitalization of P100,000. Coming from the MSME sector, I am quite aware of the situation there and we want MSMEs to grow,” he said.

Proper incubation is one of the keys to help MSMEs grow, and PFA and Sanz are serious in implementing the programs to transform businesses into development catalysts. “It is important to help MSMEs because they have a strong multiplier effect,” Sanz stressed.

The PFA has also partnered with the Department of Trade and Industry and its commercial attaches and Export Marketing Bureau in conducting outbound missions and business-matching activities to entice more people to go into business via the franchising route.

Just like other regular business ventures, franchising requires dedication, perseverance and knowledge to succeed in the Philippines, the ASEAN and the global market, he pointed out.

It is also important, Sanz added, to empower the MSMEs by equipping them with digital skills and capabilities. Since the digital technology is rapidly changing the retail landscape in the country, the PFA aims to make MSME entrepreneurs aware of the benefits of e-commerce.

Sanz believes e-commerce usage will not fully develop in the country within the next five to 10 years because Filipinos still generally prefer traditional shopping, but PFA now urges the government to prepare for the digitization of retail.

PFA also established formal alliances with PLDT, BPI, Microsoft, and Google to help franchisers enhance their skills. “PLDT and BPI have been great partners by providing MSMEs with solutions, such as fintech, enterprise resource planning (ERP), cloud-based solutions and mobility solutions. Digital and e-commerce should be adopted. If change happens, we want to be ahead,” Sanz said.

Sanz also cited the need to strengthen the PFA’s advocacy programs for the franchising sector. As of 2015, franchising had contributed revenues worth $15 billion, or five to six percent to the country’s gross domestic product (GDP). “Compared to the global average of 2.3 percent, our franchising sector is robust and very much alive,” he said.

“We’re strong in the Philippines. It is time to go out of the country, I feel the Filipino brands, particularly those in the food sector, are underestimated,” Sanz said.

The voice of franchisers 

Being the voice of the franchising industry since 1995, the PFA – under Sanz’s leadership – will continue the great work done by its past administrations, spearheaded by his mentors PFA chairman emeritus and the universally-acknowledged “Father of Philippine Franchising” Samie Lim and PFA vice chair Ma. Alegria Sibal-Limjoco, who’s also the president of the Philippine Chamber of Commerce and Industry. “As the new president, my duty and responsibility focus on serving the association with dedication and bring it to greater heights,” Sanz assured.

*This article is copied and originally  published by the Philippine Star on July 9, 2018 and is also available online at  https://www.philstar.com/business/business-as-usual/2018/07/09/1831717/new-pfa-president-sets-5-point-mega-plan#MBwSJFX5rYEgMHhM.99

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