RP brands go global via franchising

MANILA, Philippines - A new kind of export development is happening as more and more brands of Filipino origin are going international via franchising.

“This form of export development assures sustainability possibly greater than traditional forms of export,” said Samie Lim, chairman emeritus, Philippines Franchise Association (PFA) about the record expansion of Philippine brands franchised abroad.

Lim said that as of April 2009, there are 325 outlets of 17 Philippine franchise brands overseas mainly in countries where there are many global Pinoys: Bahrain, Brunei, Canada, China, Hong Kong, Indonesia, Japan, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, UAE, UK, USA, and Vietnam.

The PFA International Affairs Committee reported that a huge 58 percent of the franchise businesses abroad are food brands: Chowking, Goldilocks, Jollibee, Max’s Restaurant, Pancake House, Potato Corner, Red Ribbon, and Waffle Time. These are followed by retail branches (24 percent): Bench, HBC Home of Beauty Exclusives, Kamiseta, Penshoppe; and service franchisees such as Crystal Clear Water, Reyes Haircutters, and Systems Technology Institute (18 percent).

Bench and Jollibee have the most number of outlets with 62 each. The retail clothing giant has 48 in China, 12 in the Middle East and two in the US; while the popular food chain has 28 in the US., 16 in Vietnam, 11 in Brunei, five in Saudi Arabia, one each in Hong Kong and China. Red Ribbon, sister company of Jollibee Foods Corp. has 38 branches all over the US.

Based on the number of outlets, the most preferred countries/regions are the US (40 percent), Indonesia plus rest of ASEAN (32 percent), Indonesia (22 percent), China (16 percent) and the Middle East (11 percent).

Franchising’s global output in 2009 is a strong $2.31 trillion representing 11.4 percent of total private sector outputs. With at least 21 million jobs, total payroll is estimated at $660.9 billion.

However, there is still a huge market that is underserved. By year 2025, it is expected that 30 percent of the world’s population are Muslims.

“With the Muslim population approaching 1.6 billion a big business opportunity awaits would-be franchisees beyond the Philippines,” reveals Lim.

Based on the research conducted by the Pew Research Center for the Halal Industry Development Corporation the global halal market (food) is estimated at $547 billion.

With an expanded market of at least 580 million people, the Asian market is another key target for Philippine franchise expansion. Opportunities in the service industry such as hotels and cuisine restaurant chains abound.