That chicken house

These days, investing in a franchise has a quicker payback period than investing in the stock market. In some cases, such as the Harrison Plaza franchise of Max’s Restaurant, the payback has been very fast–less than a year.

"On the average, franchisees recover their investments in three to four years," said Max’s Franchising Inc. chief operating officer Robert Ocampo.

Max’s, which has been in existence since 1945, started franchising four years ago when it already had 50 branches, including three in California. Today, the restaurant famous for its fried chicken has franchised 30 stores.

"We are in good shape, with an average yearly growth of 15%. We have adapted to the changes of the times while others have gotten stuck with traditional menus and old management practices," said Ocampo.

The old image of Max’s when it was opened by its founder, Maximo Gimenez, was that of a traditional place where the family could get together on weekends and share a meal. The chain has broken from that, now targetting young professionals who have the purchasing power and who like to eat out.

Partnerships

Depending on the size of the location, .a franchisee can expect to spend between P10 million and P20 million. This covers the construction of the store, pre-operating expenses, and staff training.

The franchisee agreement is valid for six years, renewable for three terms for a total of 24 years. Subject to assessment of the company, a franchisee can open another branch.

"We’re very conscious about the proximity of one branch to the other and the number of population in the area. We do not want to cannibalize each other’s branch," Ocampo said.

The company also makes sure the branches have enough flexibility in promotions without sacrificing the quality of the products and services.

"The Pampanga branch wanted to put some local delicacies like sisig on the menu It clicked. So, we have included sisig on the regular menu of all the branches. It has become one of the best selling orders on the menu, aside from the chicken," he said.

Currently, all three overseas branches are company owned. There are, however, plans to franchise future outlets abroad.

For this year, Max’s Franchising Inc. will open at least five more franchises. The company is currently assessing 20 applicants for the Lucena branch which is under construction.

"We treat our franchisees as partners. With us, you have a business but you are not alone in your business." – AAAngel