Franchising TNT

ARTICLE BODY:

What made the franchise industry of the Philippines successful? According to the PFA or the Philippine Franchise Association, the franchise industry of the Philippines had significantly grown in the last few years, from 50 franchises to more than a thousand franchises today. And according to them, the reason for its rapid growth is because of small franchise business in the Philippines such as food-cart and food-stall businesses.

Popular Small Franchise Businesses
Unlike in the past in which most franchise businesses are large businesses, such as convenient stores and fast-food restaurants, most franchise businesses today are small ones, such as food-cart and food-stall businesses.

Because of its relatively smaller size and far lesser expensive franchising costs, many Filipinos were able to franchise a business for their own, giving them the same opportunity that wealthier Filipinos have had with franchise businesses.

In addition to its lesser expensive franchise cost, small Franchising business Philippines such as food-cart and food-stall businesses became popular in the Philippines because it doesn”t usually require its franchisees to have acquired years of experience in a managerial position or have finished an MBA course, which are usually the case for larger franchise businesses.

According to the PFA, it was because of the simplicity of these small types of franchise businesses that made the franchise industry successful in the Philippine market, particularly in today”s modern trends in which franchise businesses had become a popular trend for many Filipino businessmen and women. This had also led to the significant growth of the franchise industry in the Philippines.

The Franchise Industry of the Philippines
The Philippines had received a number of recognitions due to the rapid growth of the franchise industry in the country.

The rapid growth of the franchise industry, according to the PFA, had led to the creation of thousands of enterprises and generation of hundreds of thousands of jobs, making franchising an important tool in the country”s economic growth, which gave had also given the industry entry to the international market, which led to the recognition of Filipino business concepts world-wide.

According to the PFA, the Philippines was also recognized as the “franchise hub of Asia” when it comes to the development of franchise concepts.

According to many business experts, it was because of these recognitions that made franchising the preferred business method for more and more entrepreneurs, both for old and new entrepreneur.

Do you want to be in business for yourself or by yourself?

Franchising may be your alternative to starting a business from scratch.

Dear Fred and Lyna:

For the past 20 years I have worked as an account executive for a major soft drink company, and frankly., I am sick of it. I have been looking into owning my own business and have run across several franchise opportunities. Do you think a franchise is the way to go-or should I start out on my own from scratch?

Fred: In our last blog we looked at the importance of evaluating weather you have the characteristics of an entrepreneur. Now we’ll answer the writer’s question about franchising vs. starting your own business.

Lyna: Lets take 2 people we know who started similar businesses. Brad opened a Deli franchise in Ohio, and Doug started his own deli business in Virginia. They are both happy in their choice; as well as successful.

Fred: One of the things we hear from clients we coach is that they dont like the idea of being so structured that they cant utilize their own ideas. Yet Brad found a franchise where the parent company is flexible enough to let him try new things. Brad feels like he’s part of a big family. Although there are things he cannot do per his contract; he also has a lot of support from them.

Lyna: Doug steered clear from Franchises because he doesn’t want to be restricted and he wants to have the final say in all aspects of his business, from creating the logo to having fun, funky promotions. And he had money set aside to open up his business; so he didn’t have to look for funding.

Fred: That’s another plus for franchising- most banks have no problem giving loans out for a business that already has a proven track record. And the business can open pretty quickly.

Lyna: Although it took time for Doug to build a customer base; he felt he had a larger population to work with. He realized that although Franchises have a proven brand and consistency that can bring in customers from day one, at the same time this kept away those people that didn’t care for their products.

Fred: And Doug doesn’t have monthly royalty fees to pay out. On the other hand, the best franchises- such as the one Brad is with- offer continued training and support. They realize the more successful the stores are; the more money the company makes.

Lyna: So the bottom line is that Brad works well owning a franchise because he was able to get his business up and running quickly and smoothly with the proven franchise brand. He received a loan with little effort and has the support and expertise of a successful team to help him succeed.

Fred: Doug, on the other hand, would have felt stifled and frustrated as a Franchisee. What makes him thrive is the freedom to make his own decisions. He is a great networker and builds alliances with other businesses in the community.

Lyna: So should you buy a Franchise or start from Scratch? The really is; Do you want to be in business for yourself or by yourself?

Fred: If you are considering buying a Franchise, we recommend you do some research, ask a lot of questions and talk to franchisees of the companies you are looking at.

Your business is up and running and your customers are coming from near and far to buy your products or services. It might be time to franchise your business if you think your business is unique enough to expand a new branch into every town in order to maximize your brand presence.

Franchising a business can be very profitable and can provide the exponential growth otherwise not possible. It gives the franchisors a chance to expand their businesses manifold and this means generation of more profits and more capital gains.

Another benefit of franchising a business is the lower capital requirement. Franchisors can limit their costs by opening a chain store rather than opening a second store. The franchisor will only need to pay for training and administrative aspects once a franchisee acquires one branch. Franchisees need to bear certain part of the day to day running expenses of the business and keep control of the daily affairs. This saves the franchisor of botherations that otherwise would have fallen on their shoulders had they open an altogether new branch under their direct supervision. However, to start off a franchise; franchisees need to have a significant amount of cash at hand. Although they may pay an upfront fee, franchisees will be assisted by the parent company at the start of the business. This includes arranging the lease agreements, designing and constructing the store, and marketing strategies.

Franchising allows you to grow without sacrificing control over the business. You may not have minute by minute control, but you have control over how franchisees should operate the business; you create and dictate the operating system. If franchisees don’t follow your system, then you can revoke the franchising agreement and take back the business. This is another benefit of franchising a business.

Knowing how to franchise your business is essential. There are different ways in which a business owner can convert his traditional business into a franchise model. You will want to consider the best opportunities that match your lifestyle, business and financial goals. Without knowing how to franchise your business you could spend a tremendous amount of time and effort trying to find the exact way.

Hiring a franchise consultant is not only the best beat when considering franchising your existing business but also essential. Franchise consultants provide different types of franchise services, from buying a franchise to franchising an existing business. The franchise consultant will devise a plan for you which ensure that you are going in the right direction.

Franchise consultants, along with your franchise attorney, provides you franchise services to establish your initial business plan, help iron out any questionable details or omissions, and design the best proposal to present to the marketplace. In addition, they can assist you in finding the best franchisees to invest in your company, and successfully match you with partners who are more likely to be successful in maintaining your brand’s integrity.

Franchising a business can be an effective tool to ensure its growth and larger market share. Many businesses have gone this route and become global leaders in their line of operation. Such companies include: McDonald’s, KFC, Dominos, Pizza Hut and many more- However, franchising cannot be tailored for every business owner. So, it is advisable to talk to franchise experts before you start franchising your business.

About Author :

Sparkleminds is one of its kind organizations that provide franchise services for corporate houses. They have expertise in franchising a business by creating consciousness among masses about various facets of the franchise. This is one of the major objectives of Sparkleminds. This particular article illustrates these points further.

Franchising your business can help you to achieve scale much quicker than you would otherwise be able to. It also means that you wont have to raise as much debt and equity financing as if your business decided to go it alone. But, even if youre sure that franchising is right for your business, how can you be sure that the franchisees that you choose are right for your business? This article takes a look at how you can screen your franchisees to ensure they dont damage your brand and jeopardise your growth. The article focuses on franchising where the franchisee is a person, rather than a company, and they intend to take an active management position.

Creditworthiness

Its important to ensure that your franchisee is creditworthy for two reasons. Firstly, it shows their willingness to fulfil their obligations historically, and could be a sign of how trustworthy they are. Secondly, you can use this information to check how likely it is that they are to be able to afford on-going payments they make towards to your business. You can also find out how much assets they have, and the degree of leverage they will be using to purchase the franchise. The more leverage, the more likely things could go wrong. However, just because things arent looking great historically, and theyre low on assets, doesnt mean they cant contribute. Its about getting the mix right between prudence and flexibility.

Track-record

Although you are looking for a business partner, and not an employee, many of the rules are the same. If someone has a history of high job turnover, poor attendance, and long periods of unemployment then they are probably not the optimum candidate for a franchise opportunity. When youre franchising your business, and youre looking to get the best people in place, these are factors you should definitely consider. Another factor is their relevant experience for the job they will do. If youre franchising a plumbing business, for example, then if the person has experience and qualifications in this area then that could work well. Management experience is something thats not always necessary, but it can be important too.

Depending on the type of franchise youre selling, it will usually be worthwhile doing a criminal background check, and other similar checks.

Passion & Drive

Its important that your franchisees are both passionate and driven. This will mean that they will drive higher revenues, youll get higher management fees, and theyll be happier at their job. It also probably means they will contribute more towards your brand.

Most businesses know they want people like this, but finding them can be another matter altogether. Ensuring that you are disciplined in who you are willing to work with is the first step, and the second is encouraging franchisees yourself. The franchising manager should maintain a good dialogue with franchisees, and provide them with the support they need to remain highly determined to be successful. Ultimately, you and the franchisee both play an equally important role in their success.

Franchising is a popular trend in the Philippines today, and one of the many reasons as to why it gained a lot of popularity among Filipinos is because of its many opportunities. Here are some of those:

Quick ROI (Return of Investment)
One of the many popular benefits of franchise business Philippines is because of its faster ROI or Return of Investment compared to start-up businesses. Part of the reason why is because franchised businesses have already established a name in the market which makes them reliable in their market, unlike that of starting a business from the ground-up which would take a lot of time and effort.

Successful Business
In addition to its faster ROI, another reason why franchising became popular in the Philippines is because of its successful business model. According to business experts, the main advantage of franchising is that it allows its owners to start up quickly based on an already proven trademark, which is unlike that of starting their own business from scratch.

Lesser Maintenance Efforts
One of the reason why franchise business in the Philippines had gained a lot of popularity in the Philippines is because of its lesser maintenance efforts, particularly for food-cart or food-stall businesses. The reason why is that all of its marketing efforts as well as branding had been arranged by its franchisor. Some franchisors in the Philippines would even offer their services to register their franchisees business and arrange all its legal papers. This makes it easier for Filipinos to start their business quickly.

Availability
Another popular reason why franchise businesses had gained a lot of popularity in the country, particularly with food-cart or food-stall businesses in the Philippines. Because of hundreds of franchising companies in the Philippines that offer different brands of franchise businesses, particularly food-cart businesses, Filipinos have the freedom to choose which business suits their passion. Such as if with foods, Filipinos can choose from a wide variety of food-stuffs.

Business Loans
In addition to other benefits, business loans are also the reason why franchise businesses had gained a lot of popularity. A popular example is Ka-Negosyo by BPI.

Ka-Negosyo can offer flexible business loans which offers its clients choices of which plans can accommodate their franchise business Philippines needs, allowing it to cover the franchise cost itself, as well as its overhead expenses, such as its legal papers and registration, rent for its location, as well as its construction (if needed).