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Max's Group to grow its franchising business


Casual dining restaurant chain Max's Group Inc. is looking at expanding its franchising business in the next three years, banking on the potential of the business model.

"We are pivoting towards franchising heavily," Max's Group president and CEO Robert Trota said on the sidelines of the company's annual stockholders' meeting in Quezon City on Thursday.

"Hopefully by 2020-2022, we should have 70 percent of our stores franchised versus company-owned," Trota said.

The Max's Group chief said the pivot towards franchising is to give the company more free cash to be used for better operational expenditures.

"It gives us the ability to run efficiently like we are doing with our international business," Trota said.

Currently, Max's Group owns 60 percent of its stores and 40 percent franchised, including those abroad.

"As we pivoted to franchise, we are pivoting and keeping the quality stores that we want. The ones with better returns on investment. That's why if you see our growth in profitability, shows that it was the right move and aside from interest rates have not gone down, growing and using our capital is the proper way moving forward," Trota said.

In 2018, the company's net income stood at P631 million slightly higher than P627 million in 2017.

Systemwide sales grew by 8 percent to P18.8 billion from P17.34 billion.
Topline growth rose 8 percent to P13.68 billion from P12.66 billion with restaurant sales grew 8 percent to P11.3 billion from P10.46 billion, driven by opening of 24 new company-owned branches.

Commissary sales climbed 10 percent to P1.57 billion from P1.42 billion on the back of growing franchise business at 6 percent to P820.4 million from P776.2 million. —KBK, GMA News

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