Franchising group eyes 12-15 pct PH industry growth

Warren de Guzman, ABS-CBN News

Posted at Mar 15 2023 08:05 PM | Updated as of Mar 16 2023 08:38 AM

The Philippine Franchise Association holds a briefing on the 2023 International Franchise Conference and Expo happening in June and October. Projected expansion/growth for PH brands/franchises this year is 12-15 percent. Warren de Guzman, ABS-CBN News
The Philippine Franchise Association holds a briefing on the 2023 International Franchise Conference and Expo happening in June and October. Projected expansion/growth for PH brands/franchises this year is 12-15 percent. Warren de Guzman, ABS-CBN News

MANILA - The Philippine Franchise Association announced that it will host the World Franchise Council and Asia Pacific Franchise Confederation meetings this year. 

The industry group said this aims to attract industry leaders from over 40 economies to take a long hard look at the Philippines as a new destination for their businesses.

Joseph Tanbuntiong, Chief Business Officer, Philippine Country Head and Jollibee Global Head Jollibee Foods Corporation, said the meetings will also help more Filipino brands expand outside of the Philippines. 

"Franchising is another instrument for us to bring our Philippine brands outside the country. So with that, we don’t only export products from the Philippines, we actually export brands that started here in the Philippines.” 

He said the meetings will boost PFA’s goal of having 50 Philippine brands outside the country. 

The PFA said that there are currently 20 Philippine brands that have successfully expanded outside the country, and the goal is to repeat that success with 30 more brands.

Apart from the meetings, PFA is also hosting Franchise Asia Philippines 2023, which will include the International Conference on June 7 and 8, the International Expo from October 27 to 29, and a two-day Certified Franchise Executive Program at the Asian Institute of Management on June 5 and 6.

The conference will be a learning experience with seven plenary sessions and over 70 world-class industry speakers from brands like Jollibee, 7-Eleven, McDonald’s, Max’s Group, and Bo’s Coffee. 

Aside from the target for Philippine brand exports, the PFA is also looking to expand the industry by 12 to 15 percent in terms of overall business expansion including store openings and employment. The PFA estimates the Philippine franchise sector employs around 2 million Filipinos around the country.

PFA Chairperson Sherill Quintana said growth will come from new concepts being launched by new entrepreneurs, as well as the expansion of successful brands as they move into new territories. This can also come from new foreign brands entering the Philippines for the first time. 

For the expo, Indonesia, Malaysia, Korea, Singapore, Taiwan, Thailand and the United States have all been confirmed as exhibitors, and as much as 30 percent of the total floor area at the expo will be dedicated to foreign brands. 

The expo is expected to draw as many as 75,000 attendees and participants, which will make it the biggest franchise event in the Philippines to date. 

Quintana said the influx of new concepts and brands is helping to offset some heavy losses caused by the pandemic as well as elevated inflation. 

A 2020 survey showed 82 percent of the franchise sector was greatly affected by the pandemic, and the PFA is currently studying how much of the sector is being affected by elevated inflation. 

“We are doing now the survey. So hopefully in the next weeks to come we can have that,” Quintana said.

Inflation is a serious problem, but the PFA is working to help its members cope, she said. 

"We are lagging behind in terms of the agricultural development, so we are glad that there are also a lot of partnerships now from the ground, in terms of supporting the agricultural sector. We actually want to see more smaller brands, food brands, to be sourcing locally. What is available in the Philippines? Kasi you can beat the inflation with that, you are no longer going to import,” Quintana said.

PFA Vice Chairperson Ma. Alegria Sibal Limjoco said there are also new businesses and franchises which directly address inflation by catering to farmers and promoting food self-sufficiency. One such franchise is called Agri Life. 

“It will be so inexpensive compared to the others, and yet it will teach you, the franchisee, to plant in your backyard, be it vegetables, or animals. So you don’t have to go to the market, you will have it in your backyard,” Limjoco said.

Samie Lim of Blims, recognized as the father of Philippine Franchising, said the franchise business model offers franchisees a better chance of surviving current conditions. He notes, with a proven business model and strong franchisor partner, franchisees have the right tools for the job. 

“The key word is efficiency. You are able to drive your costs down, if there is inflation, then there is efficiency, and therefore it can be profitable. It depends on how efficient as Joseph was saying, where technology is used, you make it so efficient it will offset inflation cost and all that," Lim said.

Joey Garcia, President of Eight8Ate of the Udenna Group said technology has definitely helped, and online sales have given them a strong boost even with the reopening of the economy. 

"Since we opened up and brick and mortar really have, previous, pre-pandemic, very significant in terms of channel for the sales mix. So you put that together I think, when you put all of this the growth from off-site consumption, plus this return, the revenge of our customers going back, going back to dine-in experience, I think both franchisor and franchisees are gaining ground faster than what we expected," Garcia said.