Perks of having a franchise business

open2Last 2013, there were 130,000 franchises registered at the Philippine Franchise Association (PFA) which they expected to grow 20% during 2014. Samie Lim, the Chairman Emeritus of PFA, said that food and retail are the biggest growth areas in franchising, followed by services such as spas and health care.

The most common type of franchising known in the Philippines is product franchising with food. There are numerous food cart franchisers that range from the siomai food stands to international franchises such as Todd English Food Hall and Forever21. There is also the business model franchising in which you get the business processed that other organizations have established and pay them a percentage of your profit in exchange of being able to access their process tools.

But what makes franchising grow in the Philippines and why should you consider this as your first business?

1) The franchiser already has a recognized benchmark and trademark.

Most franchise outlets are already known in the market and this is the reason why they are reaching out to other businessmen to help them grow their businesses.

This can make it more convenient for you to market you business at the location you choose. Think this – if there were two siomai stalls beside each other, one is Master Siomai and the other is an unknown brand, which stall would get more customers? It will be the more recognized brand.

2) You already have the business model and processes taken care of.

A trouble you might encounter when you try to establish your own business is that you will have to figure out how to run things smoothly which will surely take time and cost you money. Franchisers already have this in place with a replicable business model where you will get to learn in a series of seminars with them.

This makes the learning curve go down because you and your staff will be studying a tried-and-tested business model instead of figuring it out in the process.

3) Good re-sale value of the business because of it is known.

In the event that you decide to take on other ventures, it will be easier to sell a franchise business instead of an unknown business. You can also be sure that the person who will buy your business will have a high probability of gaining profit because the recognition for this business.

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