A franchise promise

After eight years in the business, Raffco International is ready to franchise.

"Our goal is to grow on both sides: volume and expansion," said Erickson Farillas, who started the business with Roxanne Ang in 1994 when both were still in college. "But before we could do that, we had to be sure the systems were in place, from the production side to the buyers’ end."

Starting with a 10 sqm. stall in Shoppesville, Greenhills that sold clothes under the Plains & Plaid brand, Raffco now has nine branches in Metro Manila-based malls and an outlet each in Pampanga and in Nueva Ecija.

From its original manpower of eight, the company now has 70 in its payroll (not including the 200 indirect hires because of subcontracting).

On an annual basis, total sales are over P50 million.

Provincial

"The franchise program is set up primarily for provincial locations," said Rowena Cerda, a consultant at Francorp Phils., a member of the worldwide network of Francorp International. "The focus is to capture a bigger share of the market, but not at the expense of mall sites."

Even before the formal launch of the franchise program this Wednesday at the World Trade Center, Raffco International has already signed up four franchisees.

"The profile of the first batch of franchisees is not unlike the owners themselves. They are young couples, in their 30s and have the entrepreneurial spirit. They believe in the brand and the creative partnership Plains & Prints is offering," said Cerda.

"Plains & Prints has a strong brand image, which was steadily built through the years. It has carved a niche in the fashion retail," said Roxanne Ang-Farillas, who handles the design aspect of the business. "Our colors do not easily fade because we do our own dyeing. Our materials are pre-washed so they don’t shrink. To maintain the individuality of the customer, there are only 10 pieces of each design sold in each store."

Advantages

In the last 12 months alone, the local franchising industry has grown by a significant 49%, in large part because retail sales accounted for 56.9% of total consumer spending.

Based on a study by the Philippine Franchise Industry, the success rate for a franchise is 97% compared to the 33% for those who get into new businesses on their own.

The Plains & Prints franchise involves an investment of between P2 million and P2.3 million. The initial investment covers the franchise fee, an inventory worth 1.5 months, store construction design (depending on prevailing cost of materials) and rent deposits. The initial term of the franchise will be for a period of five years, renewable twice for a total of 15 years.

There are no royalty fees. The franchisee, however, will have to set aside 1% of its gross sales monthly for pooled promotions. Another 2% of gross sales will go to a corporate advertising and development fund.

The franchise promise says it best: "Make a statement, make an investment".