Franchising 101: Expand your market

On July 11, 2018, Go Negosyo sa Radyo hosts Sen. Bam Aquino and DJ Cheska San Diego-Bobadilla were joined by Plato Wraps Founder Kamela Seen, Lot’s a Pizza President Tess Ngan-Tian and Association of Filipino Franchisers Inc. (AFFI) Chairman Eric Caeg to share their entrepreneurial knowledge on how to expand your market in franchising.

AFFI has been the frontrunner in helping the Department of Trade and Industry (DTI) and Philippine Center for Entrepreneurship – Go Negosyo in promoting business through franchising. They also offer trainings that will help both the franchisor and franchisee in their business goal. “We [AFFI] are the home of Filipino branch which belongs to small and medium enterprises,” AFFI Chairman Eric Caeg said.

Caeg looked back on his experience of being a franchisee 20 years ago and how the franchising industry has improved through the years. According to him, suppliers extremely offer their support to the franchisor not just to stick in using their brand but also to attract as much franchisees as possible. “They don’t look at the franchisors as customers, they look at them as a partners.”

As a key player in the industry of franchising, Lots’ a Pizza President Tess Ngan-Tian observed how the franchising industry shifted from food to non-food business like nail salon, pawn shops, internet cafe, and pharmacies. Ngan-Tian reported that there is a big demand for non-food businesses and  service in the industry because they are more manageable and profitable. The food industry requires more time and effort from the preparation of the product to the selling point. “Maganda ngayon ang expansion ng franchising. For me, there is no limit as long as there is an idea and it becomes marketable, profitable, and sustainable; it can be franchised.”

Meanwhile, Plato Wraps Founder Kamela Seen shared how inflation affected her business as a franchisor. Seen shared that a franchisor cannot immediately change the price of the product as the rate of raw materials increase because she had franchisees, and it should be mutually decided. So sometimes, she shoulders the increase in raw materials herself to help the startup franchisee. Franchisees are provided with techniques that Seen applied as a startup entrepreneur and are trained on how to use them properly.

Although success is not guaranteed, franchisors collaborate with the franchisees not just to strengthen their relationship but at the same time, to help each other increase the sales of the product and find solutions to the problems of the business. Franchisors provide all the necessary help that the franchisees need. “Relationship [in franchising] is more important than the money itself,” Ngan-Tian shared.

Although franchising is profitable for the franchisors, not all who apply for a franchise are recognized. Franchising a business is an agreement; there are rules and provisions that need to be followed and they engage only to those who are willing to obey. “It is mine [franchise business] but you have a partner,” as Caeg noted.

Sen. Aquino pointed out how franchising can help the startup entrepreneurs. “Ang franchise, para kayong nakatungtong sa balikat ng mga higante. Kung successful ‘yong franchise at kayo ay makikisama sa kanilang organisasyon, lahat ng nakuha nila over the years, parang nakuha mo na rin.”

Catch the next episode of Go Negosyo sa Radyo next Wednesday at 2:00 PM on DZRH 666 kHz and Radyo Natin FM!