Over the past years, franchising has become one of the fastest routes to business success in the Philippines. Both local and foreign brand names find themselves in a tight competition to gain a sizeable margin of the Philippine market. The franchising industry has also contributed significantly to the growth of the economy in the Philippines.
Franchising can be viewed from two perspectives: the franchisee and the franchisor. For the franchisee, a franchise is like a business wrapped in a package, with all the goods, services and operating manual in it, ready for roll out and operation. Counting on the elements of a well-established brand name and a tried-and-tested system of running the business, the franchisee receives many benefits, including access to information and technology that comes with the business, training and tech support of all aspects of the system, and the fact that a name that has already built its reputation for a number of years is a lesser risk than building a name from ground zero.
Franchising, from the franchisor’s point of view, has a different meaning. It presents an opportunity for business expansion; something that would have been difficult is done by them. Franchising for them is convincing the buyer (the franchisee), that their business is a good buy and worth investing in. Having a franchisee ran an outlet of their business means they can extend their products and services to more people in a wider coverage.
Buying and selling a franchise business in the Philippines is governed by the Philippine Franchise Association. This body gives guidelines and policies to regulate and promote fair practices on franchise activities by both local and foreign brand names. It is also tasked at providing assistance to franchise holders and buyers like financial programs, seminar workshops and information dissemination.
So much does a franchise cost in the Philippines? That would depend on a number of things, like the type of product or services offered, the size and location of the intended franchise outlet, layout / design of the outlet, beginning stock inventory, facilities and equipments needed along with its operating and maintenance cost, insurance and other pertinent expenses. Other equally important matters to consider include the franchise fee, training programs that the franchisor would be providing, royalty fees, feasibility studies to be conducted, marketing campaigns and advertisements.
Franchise for food cart businesses are generally cheaper to acquire, and prospective buyers can start owning these for as low as fifteen thousand pesos to an average cost of one hundred thousand pesos, depending on the type of food being sold and the size of the cart. A water refilling systems cost around two hundred to five hundred thousand pesos to operate. Other bigger franchise, like gasoline stations and food manufacturing and retail business, can go as high as five to ten million pesos, but the returns are well worth the investment.