Global crisis benefits franchising industry

CEBU, Philippines - While the global economic uncertainty brought jitters to investors from investing their money on high-risk investment channels, the franchising industry, on the other hand, enjoyed a dramatic growth as more people prefer to venture into franchising instead of starting a new one.

“Franchise had a huge upswing this year, due to the global economic crisis, a lot of people invested their money into franchise business,” said franchise expert Rudolf Kotik.

Kotik, who owns and manages the RK Franchise Consultancy based in Cebu, said that because of the high interest of investors to go into franchising, a growing number of businesses have also ventured into offering franchise package.

Optical clinics, vending companies, laboratory companies, beauty salons and assortment of food outlets are now offering franchise package to investors.

According to Kotik, aside from the local investors who are takers of the franchise offers, the Overseas Filipino Workers (OFWs) fueled the high demand for franchising in the Philippines, as they prefer to put their money on a ready-made business with established names.

“OFWs are coming back, they invest even more into franchising, specially the below P1 million franchise fees.

Because of this, over 200 businesses from all over the country will converge in Cebu on September 12 at the SM City Cebu, to offer their franchise packages to investors. In fact, two large oil companies will be offering franchise opportunity to investors these are Total Philippines, and Phoenix.

Known as the country’s senior consultant for franchising, Kotik together with the Filipino International Franchise Association (FIFA) will hold its 10th Cebu Franchise Expo on the 12th of September this year.

Aside from the Cebu-based companies which are ready to offer their businesses for franchise, various brands from Metro Manila, Cagayan de Oro, Davao, General Santos, Dagupan, and others will be coming to Cebu to offer franchise opportunities to investors, he said.

Part of the topics that will be discussed on the Franchise Conference, include; What is Franchising, Defining Franchising, Franchising 101, What Does Franchise Provide, Benefits of Buying Franchising, How to Select a Franchise, Advantages and Demands of Franchising, Franchising Your Business, and Franchise Development.

While the franchise system has become the most popular scheme for businesses to grow faster, and for entrepreneurs to have an instant business, it has its own pitfalls that both parties should be careful about.

Kotik warned that entrepreneurs who may want to enter in franchise business, must examined carefully the franchisors and its system, as it may not offer sound franchise system that will lead to unachieved return on investments (ROI).

Serious franchisors or those who offered their businesses for franchise must invest very well in the system, like getting professional franchise consultants, rather than formulating their own packages.

“Be careful of the ‘cheapy-cheapy’ franchise packages,” Kotik warned entrepreneurs who are planning to invest in franchise business. —Ehda M. Dagooc