Franchising

Ministop Philippines, a chain of 24-hour convenience stores that operate as a grocery and fast food diner combined, has a core business policy that is has given the acronym QSC+A. It stands for "Quality, Service, Cleanliness and Assortment/Availability," five customer service targets that are relentlessly pursued by the company and its business partners--the company prefers to call its franchisees by that name--all the way down to the store staff.

The company's pursuit of QSC+A is evident in every part of the Ministop experience--from the customer's entry through its doors up to the time the product is consumed. "In everything we do," says Paul H. Darroca, business development officer of Ministop Philippines, "we think of the customer first, and we make each of our business partners clearly understand that QSC+A means always putting the customers first."

At the store level, QSC+A translates to the five important words that Ministop trains its entire staff to say to every customer: "Good morning!" upon entry, and "Thank you for visiting Ministop!" on leaving. And as important, QSC+A has been integrated into the design of the Ministop store itself: "Ministop builds its own kitchen within the store plus the dining tables and chairs," says Darroca. "You can actually sit down, chat, and enjoy your meal inside the store. Unlike other convenience stores, Ministop is not just for emergency grocery purchases by people who need to leave after a minute."

Established in December 2000 as a joint venture of the Robinson's Retail Group, Mitsubishi Corp., and Ministop Co. Ltd. of Japan, Ministop Philippines offers a franchising package that follows the "shared investment, shared expenses" principle. "The company shoulders at least half of the expense even if the store is being run by a business partner," says Darroca. "We don't only share the business with the business partner; we also share the risk."

A business partnership with Ministop falls under two categories: the investor type, and the operator type. The investor type covers construction costs, the joining fee, the merchandise, and some ancillary store equipment. On the other hand, the operator type requires less capital investment from the business partner and Ministop will shoulder the construction costs entirely.

Regardless of the choice of business package, Ministop provides and maintains a strong and consistent support structure for its business partners' outlets. "Seldom will you find a business partnership model that will invest equally with you in a particular store," explains Darroca. Even the big franchising companies out there will tell you, 'Put out the money and we'll give you the training, but the risk will be yours 100 percent'. But here in Ministop, if you close down, both of us lose our money."

To provide day-to-day support to its business partners, Ministop uses what it calls a "store adviser network system." A store adviser, who is assigned to handle five to seven stores, visits a store twice a week for assessment of performance, discussion of action points and strategic plans, and introduction of new products and procedures. "It's as if there's a customer who regularly goes to your store and tells you the things you have to improve on, and all of that in writing," says Darroca.

Of that support system, Evalor Araya-Almendras, a Ministop business partner since March 2003 with two stores in Makati City, has this to say: "The store adviser stays in the store at least 3 to 4 hours per visit. Nagbababad talaga sila [They really focus on what they are doing]. They make it a point to remind you of strategies like proper product placement and the need to replenish your merchandise."

Another Ministop franchisee, Ma. Encarnacion Santos, says, "The store adviser regularly visits our store to monitor stock inventory, to give suggestions on how we can improve the operation of the store."

Santos is a housewife who used to operate a home-based snack station and canteen in Baclaran, Paranaque City, before she invested in a Ministop franchise in 2004. "Franchising makes it easier to start up your own business--[the franchiser] has established a working and efficient system. I chose Ministop because in a trip to Japan I saw [Ministop's franchise] potential here in Manila."

She visited a Ministop branch at the ABS-CBN compound after that trip, and after talking to the franchisee she proceeded to the Ministop head office to apply for a franchise. She secured a location on busy Pasong Tamo Avenue which is teeming with offices, residential and commercial establishments and targeted customers "who have immediate grocery needs beyond regular office hours."

 

Systems and logistics are the other key support services that Ministop provides to its business partners. In fact, Ministop invested US$1 million for its Point of Sales System (POS) alone--an online system developed by Fujitsu Japan to provide the business partners real-time sales figures at any time of the day.

To ensure the efficient and timely delivery of products to its stores, Ministop Philippines established the Robinsons Distribution Center Inc. (RDCI), which is located at Bicutan area. This distribution center uses the latest technology in warehouse management under a consulting agreement with Best Logistics Partners of Ryoshoku, the biggest wholesale and logistics company in Japan.

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