OFWs urged to invest in franchising

CEBU, Philippines - The Philippine franchise industry, through the Philippine Franchise Association (PFA) is reiterating its call to encourage the Overseas Filipino Workers (OFWs) to take advantage of the opportunity offered by the profitable franchising businesses in the Philippines.

Instead of putting their money to some start-up businesses, wherein success is still uncertain, entering into a franchise business promises good returns and business sustainability, said PFA president Elizabeth Pardo-Orbeta.

Orbeta said the organization is trying its best to attract more OFWs to tap the lucrative franchise business, for them to maximize their income abroad, while helping their families back home.

By entering into the franchise business, there is also a possibility that OFWs may stop working abroad, if their business will grow here. This is also one way of promoting “brain-gain” in bringing back the OFWs here, she said.

In 2011, industry estimate generated by the franchise industry hit US$11 billion led by the food, retail and service sectors.

Meanwhile, aside from the OFWs, the franchise sector is also reaching out to the suffering exporters in the country, to take part of the franchise, as an alternative income generating business, while the export sector is still under pressure.

Earlier the World Franchise Council (WFC) urged exporters to explore the opportunities of franchising, while the export market is still struggling, and recovery is still at large, at least in the short term.

WFC chairman Samie Lim, said that the franchise sector offers promising opportunities, as many franchisors are now setting their sights on Asia, while United States and Europe are still in bad shape.

“For the next five years, they are looking at Asia and fortunately, the Philippines has prepared itself, we are ready,” said Lim.

Because of this opportunity, Lim encouraged exporters to try on the franchising business, although not totally abandoning exports.

According to Lim, the Philippines is considered as one of the most attractive markets for franchising, saying “the Philippines has the biggest malls in the world, people here are always smiling, everybody speaks English, they are young and they eat six times a day.”

He said franchising can be an alternative venture particularly for exporters, as long as they will adopt the franchising model of expansion.

“They [exporters] must stop thinking now—I want a buyer who wants to buy 20 containers for next year. They must think of the other dimension that is creating shops. Franchises are stores, shops have brands and designs,” he said.

 Franchising could be a good option for diversification of exporters, as exporters are already knowledgeable about the original equipment manufacturing (OEM), original design manufacturing (ODM), and original brand manufacturing (OBM).

“We should be displaying original Philippine designs. Franchising brought the third dimension called original brand manufacturing,” he said.

Based on the industry’s projection, the country’s franchising sector is seen to generate P50 billion in additional investments in the next three years.

“New franchise stores or restaurants I believe will generate about P200 billion additional sales revenues, meaning the government can take taxes from that. And it will generate 125,000 jobs at least in the next five years,” Lim emphasized.              

While Lim is encouraging exporters and OFWs to take advantage of the promising franchising business, he however, warned to be careful in entering in this kind of business, saying learning the know-how of franchising fundamentals is vital. —(FREEMAN)