Franchise sector upbeat amid economic concerns

MANILA, Philippines - The local franchise sector remains upbeat amid a generally challenging business environment, with industry players saying uncertain economies bring out one's entrepreneurial spirit. With the variety of business concepts up for expansion, the Association of Filipino Franchisers, Inc. (AFFI) is looking at growing by at least 30 percent in terms of the number of stores and the corresponding sales this year. AFFI President and Binalot Fiesta Foods, Inc owner Rommel T Juan said the group of about 80 member companies currently has a total number of 4,000 outlets nationwide, 65 percent of which are franchises. "This is a time when people are not sure of their jobs and their income. They want something to fall back on," Juan said in an interview after the opening of the 7th AFFI Franchise Show on Friday. Budding entrepreneurs Juan said the people who venture in to franchising are mostly overseas Filipino workers who want to invest their money locally, fresh graduates from well-off families who get a franchise instead of a new car or a grand vacation as a gift for earning a degree, and retirees who want to grow their retirement pay. He said franchising is often the top choice for budding entrepreneurs because the package already includes the whole business system, from start-up to operations to marketing. "The success rate is 98.6 percent. That means a store does not close within three years. Those who succeed are the ones who really focused on the business," Juan said. On the other hand, as much as 85 percent of independent start-ups close shop within three years, Juan added. Attracting new franchisees Cater King Food Corp President Terasa D Laurel, who heads Goto King and Habba Habba, agreed with Juan, saying that franchising presents lower risks to a new entrepreneur. "With what's happening in the stock market and in other financial investments, people now are more grounded. They want to invest on an actual business which they can control," Laurel said in a separate interview. While the popularity of the franchising concept holds amid economic uncertainties, companies are not too quick to just accept anyone who wants to help expand their business. For Bioessence Franchise Executive Sherryl Lyn R Ligon, strict screening of future franchisers is important in the success of a business. Bioessence is a wellness company running the brands Bioessence, FacialPlus, and Suay Thai Spa. "It is harder to get new franchisers now because our fees are relatively high compared to other businesses. A lot of people are interested but we still reject those who do not meet our criteria," Ligon said. She added that as much as 90 percent of Bioessence franchisers are old clients who have had first hand experience with the company's products and services and who have the passion for wellness and beauty. Franchise show Binalot, Goto King, and Bioessence are only three of the 150 companies which are currently exhibiting showcasing their concepts at the 7th AFFI Franchise Show. The exhibit is located at the World Trade Center in Pasay City and will run until Sunday. - GMANews.TV