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Franchising In The Philippines

Posted on September 1, 2019 by blogger

Franchising has been in the Philippines for 94 years. With the entry of Singer Sewing Machine in 1910 which introduced product distributorship. Numerous companies embraced this concept as their vehicle for business expansion over the years. From 1910 to 1965, businesses staked their flags in the Philippine economy through PRODUCT DISTRIBUTORSHIP. Some of these multinationals were tire and pharmaceutical companies.

The take off was slow in the early years as the succeeding companies like A&W Restaurant known for its root beer entered in 1965. The first outlet was established on Highway 54 (now popularly and historically known as Epifanio Delo Santos Avenue or EDSA) near the Big Dome-Araneta Coliseum. The concept was a drive-thru where women food attendants garbed in mini-skirts, black stockings and in roller skates would serve customers inside the comfort of their cars. Trays clamped by the side of the door and mugs with cold refreshing root beer partnered with foot long hotdogs were served. Its set-up was exactly the same as found in the US branches during those years. What this company brought was another form of franchising, which is known as Business Format. From then onwards most entrants into the market embraced this concept, in fact, so widely used not only in the Philippines, but all worldwide.

Product Distributorship

This is a form of franchising where owners of products allow other parties to sell or distribute their products or even use their trademark as a dealer. There is minimal or no control of operations. The relationship is centered on the quality of products sold.

Business Format

A form of franchising used by 90% of companies involved in franchising. This is the reason why franchising is considered the most successful way of expansion worldwide.

In business format, the franchisor, more than his registered trademark and products, has developed a business system that is made available for use to franchisees. Compliance to the business system is the core and essential element of their contractual relationship embodied in a franchise agreement.

The first survey of franchising in the Philippines done in 1995 revealed that there were a total of 50 operating foreign franchisors at that time. The success rate of foreign franchisees is 97%. In 2003, there were 315 foreign franchisors in the country with 87% success rate.

Philippine Based (Home-Grown) Franchises

Earliest recorded homegrown company that used business format franchising was PANCAKE HOUSE. It was franchising since 1978. PANCAKE HOUSE is still active in franchising and has transferred ownership a few years back.

In 1996, there were 94 companies using franchising as their route to expansion and the number has substantially increased to 481 in 2003. The success rate is a good 90%.

Philippine Franchise Scenario

Franchising in the country evolved from the US Franchise System. There are, however, no laws that regulate franchising. Companies and franchise developers use international franchise practices as reference and as a guide to pursuing this type of business. The increasing number of homegrown companies using franchising in their expansion can be attributed to the presence and increasing number of foreign franchisors. They served as motivators and inspiration for the local entrepreneurs.

Franchising for years has been the monopoly of food sector. It was only in mid-1990’s that service and retail entrepreneurs used franchising.

There was an absence of franchise education in the country for decades. Franchise Conference and Seminars started only in the mid-90’s. Franchise Associations were also formed with the vision of professionalizing and standardizing the franchising as well as police their own ranks.

Information on the History of Franchising

Posted on August 26, 2019 by blogger

The word -franchise- or -franchising- has already created a buzz in the business world. There are thousands of companies worldwide who are franchising their business for optimum exposure of their brand. In fact, franchising is the single most successful marketing concept ever used worldwide for distributing goods or services to consumers.

The franchise business has been around a long time, but have you ever wondered how the concept of franchising came into being. First the word -franchise- is derived from the Anglo-French word meaning -liberty- or -privilege or freedom-. The concept of franchising had to start somewhere. The origin of the concept dates back to 1850’s.

Evolution of Franchising

During the 1840’s, a major German beer brewer granted certain rights to some particular taverns to sell their beer by using the trade name SPATEN. This concept initiated the concept of franchising that became familiar to most of us in the twentieth century.

However, the credit of popularizing the concept of franchise opportunities goes to none other than Isaac Singer who invested the Singer Sewing Machine. Singer was looking for an innovative way to distribute the sewing machines manufactured by his company over a widespread geographic area. This is when he realized the benefits of franchise opportunities to market his products. Singer was also the first one to prepare franchise contracts. These documents then became the basis for the modern version of franchise agreements.

Franchising during late 1800’s and early 1900’s

Late 1800’s and early 1900’s was the time period when the concept of franchising became more popular as more and more companies started franchising their business. Mainly street car companies, oil refineries and auto manufacturers found that through franchising they can sell their products over a larger geographical area. During this time frame, some of the popular companies that began to franchise are other Kentucky Fried Chicken in 1930, Dunkin Donuts in 1950, Burger King in 1954, and McDonald’s in 1955. These companies took the concept of franchise business to a whole new level by creating some of the best franchise networks in the world.

Franchising in the modern era

The present day concept of franchising became popular post World War II. After the conclusion of the war there was a huge demand for many products and services. Subsequently, to take advantage of the situation many more companies joined the bandwagon of franchising. This led to rapid expansion of franchising in the 1960’s and 1970’s. But during this time there were many companies that went bankrupted due to poor fund and management and this hugely affected the franchisees.

Such unfortunate events led to the formation of the International Franchise Association (IFA) and Federal Trade Commission (FTC) to regulate laws related to the franchising industry. In 1978, the FTC created the Uniform Offering Circular (UFOC) which was later renamed as Franchise Disclosure Document (FDD) in 2007. These documents made franchise companies to provide detailed information to potential franchisees and that too in written format. This really helped in making franchise business successful.

Today, there are thousands of successful best franchise brands that provide products and services to consumers all around the world!

FIHL is your best source for information about new franchises business options and best franchise opportunities in the market. Here you can get all the tips required for owning the best franchise business and lots more.

Franchising Legal Advice Is Best When Choosing Any Form Of Franchise

Posted on August 21, 2019 by blogger

Franchising is a huge opportunity for many people to consider. People tend to think that a franchise only comes in one format, but in fact nothing could be further from the truth.

Lots of different areas of business have franchising opportunities you could consider, and this means you should give serious consideration to the kind of business you would be best at doing.

It should come as no surprise then to learn that getting proper franchising legal advice is a good thing in many different ways. For example if you are totally new to the idea of franchising opportunities you can find out more about the legal aspects that are involved. Specialist advice is normally available completely free charge for the initial consultation. This should give you plenty of time to ascertain whether franchising is going to be something you should look into further.

In addition it is worth thinking about the amount of experience in franchising that franchising solicitors have. They will have seen and dealt with people on both sides of the fence so to speak, helping both franchisors and franchisees. This means you can find out more about the process and what to expect before you dive in.

Careful consideration must be given to the type of franchise you will choose as well as whether you should go for a franchise or not. You may be suited to working in a food and drinks business for example. Alternatively it could be something like a gym or other sports related business that fits the bill for you. Either way, proper franchising legal advice will stand you in good stead in many different ways.

Some people think it would be fine to go ahead and sign for a franchising opportunity without the help of specialist franchising solicitors. You can indeed do this, but you would be going it alone in an area where legal advice is highly recommended. Franchise contracts are notoriously in depth and complex, and if you don’t get yours checked out before you sign it, you could end up with problems later on that could have been avoided.

As you can see, the type of business you choose is essential to know before you press ahead in finding the best franchise opportunity. Franchising legal advice given by experienced franchising solicitors can help in this respect as well as many others. But it is wise to know which business you would most likely excel in before you get started.

Advantages Of Franchise Businesses In The Philippines

Posted on August 16, 2019 by blogger

Franchising is a popular trend in the Philippines today, and one of the many reasons as to why it gained a lot of popularity among Filipinos is because of its many opportunities. Here are some of those:

Quick ROI (Return of Investment)
One of the many popular benefits of franchise business Philippines is because of its faster ROI or Return of Investment compared to start-up businesses. Part of the reason why is because franchised businesses have already established a name in the market which makes them reliable in their market, unlike that of starting a business from the ground-up which would take a lot of time and effort.

Successful Business
In addition to its faster ROI, another reason why franchising became popular in the Philippines is because of its successful business model. According to business experts, the main advantage of franchising is that it allows its owners to start up quickly based on an already proven trademark, which is unlike that of starting their own business from scratch.

Lesser Maintenance Efforts
One of the reason why franchise business in the Philippines had gained a lot of popularity in the Philippines is because of its lesser maintenance efforts, particularly for food-cart or food-stall businesses. The reason why is that all of its marketing efforts as well as branding had been arranged by its franchisor. Some franchisors in the Philippines would even offer their services to register their franchisees business and arrange all its legal papers. This makes it easier for Filipinos to start their business quickly.

Availability
Another popular reason why franchise businesses had gained a lot of popularity in the country, particularly with food-cart or food-stall businesses in the Philippines. Because of hundreds of franchising companies in the Philippines that offer different brands of franchise businesses, particularly food-cart businesses, Filipinos have the freedom to choose which business suits their passion. Such as if with foods, Filipinos can choose from a wide variety of food-stuffs.

Business Loans
In addition to other benefits, business loans are also the reason why franchise businesses had gained a lot of popularity. A popular example is Ka-Negosyo by BPI.

Ka-Negosyo can offer flexible business loans which offers its clients choices of which plans can accommodate their franchise business Philippines needs, allowing it to cover the franchise cost itself, as well as its overhead expenses, such as its legal papers and registration, rent for its location, as well as its construction (if needed).

Follow Marketing Process For Franchising Success

Posted on August 11, 2019 by blogger

A strategic tool used for the origin, growth and success of any business is marketing. Franchising is not aloof of it. A strong marketing strategy is as important for a franchising as it is for any other business. A franchise business is a double marketing strategy. On one hand it boosts the sales of the parent company where as on the other hand it also takes care of the franchised outlets. A franchisor promotes the brand at the national level while its franchisees promote the brand at the local level. A good marketing plan presents in detail the necessary actions to achieve one or more marketing objectives. Here are some factors that need to be taken into consideration to plan the marketing process resourcefully.
Marketing process helps the franchisor and the franchisees in bringing value and assurance profitability to the franchising business. It is customized to understand the needs and demands of the customers and satisfy them. The marketing process involves marketing strategy, situation analysis, marketing-mix decisions, control and implementation.
Marketing strategy: It is necessary to conduct market research as it provides specific information about the market. A franchisor or franchisee has to strategically plan to pursue the required business proposition. Not only this, market information makes it easy for you to target the specific customers and make changes according to the market.
Analysing the situation: All businesses whether franchised or independent needs to have an edge over other rivals to achieve sustainable growth. A thorough analysis of the situation is required to flourish successfully in the fierce competitive market. As customers are the driving force of a business, therefore, a franchisor or franchisee has to analyse the customers requirements on regular intervals.
Marketing-mix decision: Marketing-mix includes four Ps i.e. product, price, place and promotion. It is the basic and tactful element of marketing plan. It One can modify the offering (to the customers) by varying the elements of marketing mix. For instance, if your product or service is high profile, then you need to focus more on the promotion part rather than focusing on the price. Similarly, if your offering is meant to the lower middle class then you need to highlight the price tag to allure the target customers. So, marketing-mix holds the most important part of marketing process.
Implementation and control: After successfully marketing the product or service in the market it is essential to monitor it closely. Monitoring the marketing process is necessary in order to incorporate the necessary changes. As the market keeps on changing it becomes essential to accommodate the changes to ensure the sales at various franchised outlets.
So it is time for all you new franchisors to acknowledge that marketing process is an integrated process through which businesses operate and accomplish their business targets. It is universally accepted fact that business and marketing are mutually dependent and complementary to each other and when done tactfully can help meet the preferred business objectives.