AFFI projects 20% growth in sales this year

MANILA, Philippines - The Association of Filipino Franchisers, Inc. (AFFI) expects the combined gross sales of its member-companies to hit P72.6 billion this year, or 20 percent higher than their 2009 performance.

AFFI president Paulo M. Tibig, who is president and CEO of Vintel Logistics (V Cargo Worldwide), said the franchisees grossed P60.5 billion last year and they expect the amount to jump by 20 percent this year.

At a recent press launch in Makati City of “The 9th Filipino Franchise Show” slated Sept. 16-19 at the World Trade Center in Pasay City, Tibig noted that the local franchising industry composed mostly of medium sized entrepreneurs is steadily growing, and considering the uncertainty in global economic recovery, it has remarkably outpaced the expansion of foreign firms operating in the country.

“We have not been affected by the economic meltdown. There was a bit of a slack in the first quarter, but there has been a rebound mid-way in the second quarter,” he said, adding that there is a strong interest to go into franchising, especially from overseas Filipino workers.

AFFI executive vice president Richard V. Sanz reported that the number of AFFI members has swelled to 119 companies in the first half from only 80 at the start of the year. He said to date, its members have an aggregate of 6,000 outlets, and will likely expand before the end of the year, with the industry creating nearly 35,000 jobs.

Sanz, who is also president and CEO of FoodAsia Corp. (Bibingkinitan! and Tea Square), told reporters that AFFI expects the ratio of food and non-food services to stand at 55:45 by next year from 80:20 in the past. The food franchises used to account for 80 percent of the country’s total franchises.

“We’re expecting a surge in the number of outlets and franchises particularly in areas outside Metro Manila. There is big demand for small to medium franchise outlets in the North and South Luzon,” he explained.

Sanz said AFFI does not only target the Filipino market which is a captive market, but also the mainstream market. “A number of our members such as Potato Corner, Goto King, Figro, Fiorgelato, Aquabest, Bibingkinitan!, among others, are now branching out in Southeast Asia and the USA,” he added.

Teresita L. Ngan Tian, AFFI chairman emeritus and board advisor, who is also president of Lots’ A Pizza, said her company which now has 151 outlets all over Metro Manila, has tied up with Visayas-based Julie’s Bakeshop to set up at least six pizza outlets in Cebu.

“We have a master franchisee in the Visayas which is now mapping out areas where there is a real chance for our company to grow. We will be replicating that eventually in Mindanao,” Ngan Tian explained noting that some AFFI members are now franchising their salons, spas, even schools where the operating costs are more stable than the food business.

Neil C. Delgado, AFFI vice president for public relations and marketing, who is also general manager and chief operating officer of GQWEST Inc. (Aquabestt), said this year’s AFFI Show will feature at least 380 exhibitors representing more than 120 unique business concepts, doubling the exhibition booths last year, and expecting some 25,000 visitors.

“We have doubled our venue for this year to accommodate more members who would want to showcase their products and seal new deals with aspiring franchisees. This year’s show is a testament to that growth. This is a 100 percent increase from last year’s show,” Delgado pointed out.

Ngan Tian added exhibitors will have their own shows in their respective booths, with the franchise owners themselves ready to answer queries from prospective franchisees. Lots’ A Pizza, for instance, calls its booth “The Event Center” where visitors would benefit from business seminars and other activities for free.

“We are positioning the Philippines as Asia’s franchising hub. Right now, the country has the largest number of homegrown franchises in the region. We certainly want to weed out potential problems, but we have to look for more middle-ground that would ensure that franchisees are protected without hurting the industry’s growth,” Sanz stressed.