Pinoy franchisers target P72.6 billion sales this year

CEBU, Philippines – The Association of Filipino Franchisers Inc. (AFFI) expects to generate at least P72.6 billion in collective gross sales this year. This is based on the organization's projected growth of 20 percent in 2010, said AFFI president Paulo Tibig.

In 2009, franchisees gross income registered P60.5 billion, this year it is projected to hit the P72.6 billion in revenues.

Notably, the local franchisers not only withstood the economic downturn caused by the global financial crisis, but actually doubled their sales from three years ago, Tibig said.

As an organization, Tibig said AFFI is also growing rapidly, now with 119 member-companies from only 80 at the start of the year.

"Food still dominates the franchise concepts but we also have many in the non-food and allied industries. There is now a significant high awareness among Filipinos that the easiest way to get into business is through franchising," he said.

On the other hand, AFFI vice president Richard Sanz said that AFFI members now have over 6,000 outlets nationwide with more than 36,000 employees.

Member-firms recorded more than 30 percent growth in combined sales in 2009, Sanz reported.

Sanz added that AFFI develops local franchisers through three stages, namely; entrepreneurship development, local expansion and global expansion.

Meanwhile, franchise expert Rudolf Kotik said earlier in an interview with The Freeman that while the global economic uncertainty has brought jittery of investors to put their money on high-risk investment channels, franchising industry has grown dramatically in recent years.

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, as part of their expansion strategy.  

In Cebu, business like optical clinics, vending companies, laboratory companies, beauty salons and assortment of food outlets are now offering franchise packages to investors.

Kotik noted that 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 prefer to put their hard-earned money on ready-made businesses with established names.

However, Kotik warned that 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 it own pitfalls that both parties should be careful about.

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