Before starting your dream business into franchising, you must know first the ins and outs of the popular business method that may help you even during the tough times.
During the economic crisis, the entrepreneurs see a bright future in franchising. An opportunity came just in time for entrepreneur to put up a business, as with franchising. No doubt that franchise’s success rate can reach up to 90 percent with direct result of relying on the franchisor, plus with its right business formula. That shows why franchise Philippine is getting more in-demand and still growing up to now.
Franchising is the practice of using another firm’s successful business model. For the franchisor, the franchise is an alternative to building ‘chain stores’ to distribute goods and avoid investment and liability over a chain. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.
Vice-President of the Philippine Franchise Association (PFA) and chief executive officer of Francorp Philippine, Alegria “Bing” Limjoco stated that an ideal franchise business must be in “win-win situation” for both parties: the franchisor’s success is the success of the franchisees. Or as the franchisor grows and expands the franchisee gains an opportunity to operate small business and the customer benefits from convenience and the quality of product or service.
Why Go into Franchising?
Because of the global economic crisis, companies limit their employees and some people had a hard time looking for jobs. Like stated earlier, the past economic crisis was the perfect time for the franchising to boom into market. Because franchising is much cheaper and less risky, entrepreneurs find it a great chance to somehow make a source of income for them. Going into franchise doesn’t need too much experience or knowledge in managing business, because franchisor will provide training and seminars for franchisee. The franchisee can start with something small and be optimistic about getting back the investment. Even graduates can be a franchisee. It would be better for the parents to give their children a franchise business rather than giving them cars. They can buy cars on their own if they run their franchise well. With this business model, a franchisor can readily deal with problems common in franchise business.
Limjoco said that franchising is not a “get rich-quick scheme”. I agree with that. Even small business cannot assure you a quick return of your investment, or getting you a rich immediately. And not all those who bought franchises become successful. Dare to research. Just bear in mind that franchising is still a business, though you have your franchisor to support and help you with your business, still, don’t have the assurance of success. A right business formula plus patience and focus can somehow help.
1. Credibility. A company must have credibility in every franchisee. Most franchisee look on the number of outlet the company has, how long the company is being operated and the customer’s awareness of the brand/products/services.
2. Distinct advantage over the competitors. Every Franchisee wants a good status over its competitors. Remember, there are lot of franchise business today that are just around the corner, so better go for a company that has a great attraction or status in franchising.
3. Franchisor’s readiness to go into franchising. The franchisor must have the ability to transfer the documented system to his franchisee. This is all covered by the company policies. It is complicated to have a franchisor who cannot give you a assurance of support, so, it’s better to consider not only their willingness to invest but also their passion operate the business.
Crisis Gave Franchising A Great Opportunity
Not all in the business industry dropped it’s success rate. The entrepreneurs found it a great step toward the development of franchising. By the end of 2008, the PFA notes that franchising opportunities in the country reached 1,000 with 66 percent of that number comprising of local franchise and a big jump from just about a total of 50 foreign and local franchises in 1995. Another opportunity for the Filipino entrepreneurs to expand the franchising business here and abroad. Even the overseas Filipino workers found franchising a great source of income while working abroad. Pretty cool idea for business-minded Filipinos.