Is This The Way To Go For Those With The Cash?
There are over 400 Franchises in the Philippines that the budding entrepeneur can choose from. Some of these are international brands or franchises known in the USA like McDonalds, KFC, Pizza Hut and so on. The majority though are home grown and that really isn’t all that surprising.
Firstly Filipino’s love to do things in groups so being a frenchisee means you are one of a group operating the same, identical business as many others. Comforting to anyone brought up in a culture that promotes the group at the expense of the individual in so many ways.
Yet the individual, or couple, may still want the independence and financial benefits of being one’s own boss and running your own business. It is a statistic that 95% of franchises succeed whereas
only 5% of new, start up businesses last as long as 5 years. More than half will collapse within the first twelve months and the main reason is under capitalisation, usually followed by poor location.
The beauty of a franchise is that you are given a model to follow that is working for others and providing you follow the guidelines your business should prosper, too. All of the expensive trial and error has been finished with a long time ago and by the time someone prepares their business for franchising, you can be fairly sure it will work. When starting abusiness from scratch, nobody plans to fail, but many fail to plan or plan sufficiently and buying a franchise erases a lot of these risks.
A good franchise will have a comprehensive operations manual, pre-selection process and a good marketing plan. Many franchise agreements have you paying a monthly fee for the adverising and
marketing so make sure the franchisor is doing the right thing by the business in the local media. On top of that there could be ongoing Royalties that are paid monthly. Make sure you are getting something in return for these!
There are good franchises and bad ones, same as anything. The bad ones take your money and give you a badly written operations manual and prety much leave you to get on with it. The good ones will usually charge more as the franchise is worth more and will earn more) and they will also give you more. More assistance with location sourcing, staff trianing, ongoing training and supervision, innovative marketing and advertising and lots more. You will get some thing in return for you fees.
When choosing a franchise you should ask the hard questions, although there is no harm in asking them politely. Really investigate what you get and what the franchiser will do for you and for how long. Make sure you fully understand every aspect of the franchise agreement, before you sign and hand over your cash!
Buying a franchise can cost as little as Php27,000 (US$500 approx) (NachoKing Taco cart!) or well into the millions, McDonalds go for around Php15-30 million, which is serious money in any currency.
Anyone looking at investing that kind of money is probably not reading this newsletter, so don’t be surprised if we keep to the under US$30,000 mark when we look at individual businesses and franchises in future issues.
If you want to know more about this great way to get into business, visit www.filfranchisers.com the website of the Association of Filipino Franchisers Inc, or try the RK Franchise Consultancy site at
www.franchise.ph Here are some other links to franchisers you may want to surf into and check them out:
www.nachoking.com NachoKing, carts starting at only Php 27,000!
www.figarocoffee.com Figaro Coffee Shops
www.metropole.com.ph Laundry and Dry Cleaners
Philippine Dreams does not endorse any of these specific franchisers but includes them here for information purposes only.