FamilyMart may take franchising route - ALI

By VG Cabuag, BusinessMirror

Posted at Aug 18 2014 07:56 AM | Updated as of Aug 18 2014 07:21 PM

MANILA - Ayala Land Inc. (ALI) is now looking at the franchising route to speed up the expansion of its FamilyMart convenience-store network and improve its competitiveness versus the bigger operators.

Jaime Ysmael, CFO of ALI, said the FamilyMart consortium is now studying the mechanics of the franchising business as it may open the convenience-store chain to franchisees.

FamilyMart is a joint venture between ALI, the Rustan’s group and Japan’s Itochu group.

“Hopefully that will lead to faster expansion of the stores,” Ysmael said, adding that FamilyMart now has 60 stores since it was rolled out late last year.

The consortium earlier allocated P300 million in capital spending to unveil 100 stores.

“The group is focused on ensuring that it grows in a rational way so that it becomes profitable in as short a time as possible,” Ysmael said.

He said the chain’s profitability will be influenced by the store mix—franchised and company-owned—that will be achieved. The group is still figuring out the ideal mix of company-owned and franchised outlets.

FamilyMart is the Ayala group’s response to the growing prospects of the local retail sector, which is seen to experience a compounded growth of 7.7 percent between 2012 and 2017.

The convenience-store segment became one of the growth spots among big business groups in the Philippines, with SM Investments Corp. pilot-testing a number of Indonesian convenience store Alfamart in the southern part of Metro Manila, while Puregold Price Club Inc. has announced plans to bring into the Philippines Lawson, another Japanese brand.

Philippine Seven Corp., the master franchisee of 7-Eleven stores in the Philippines, has more than 1,000 branches, while the Gokongwei’s Ministop has less than 500 stores.

Meanwhile, the group of former Sen. Manuel Villar is also putting up his homegrown All-Day convenience store.

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