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Some franchise businesses that started outside Metro Manila – like Plato Wraps, Colette’s, Buns and Pizza, Kuya Chito’s Takuyaki and Wrap it Up! have conquered the big city, while some others remain wary of making such a move.

Rudolf Kotik, founder of RK Franchise Consultancy, says that regardless of the location whether province-based or in Metro Manila, the mechanics of the franchising are the same. The difference is making adjustments when province-based franchise companies explore Metro Manila, and vice versa.

Kotik makes an interesting observation: It is easier to bring a franchise company from the provinces to Manila than vice versa. Kotik, whose company has helped over 350 franchises, says that Manila-based franchises have to do a lot of study of the provincial community for it to thrive in that locality.

It is a different story, however, for province-based companies going to the big city. According to Kotik, all of the franchise brands he has helped break into the Manila market are doing well.

Another important point Kotik makes: provincial franchising, in general, is thriving. Armando Bartolome, president of GMB Franchise Developers Inc., agrees. The success rate of provincial franchising, according to Bartolome, is much better, given the high availability of location, and lower rental rates in the provinces.

In addition, he notes that because of close business and family ties in the provinces, better communication and strong business networks are easier to come by in these places.

Tips:

Franchise companies typically go through a multi-stage expansion: local, regional and then national. They usually saturate a local market first, before moving on to other places.

Franchising consultants Kotik and Bartolome, however, believe that many Philippine provinces to date are underserved, and therefore present more opportunities for expansion than the Metro Manila market, where competition is already very tight.

1.    Phoenix Petroleum


Owner: Dennis Uy

Business concept: An independent gasoline station. Phoenix Petroleum is also in the business of supplying petroleum products to shipping, manufacturing and airline companies. It also entered the lubricants and car care products business.

First salvo: In July 2005, Uy opened his first gas station in Lanang, Davao City and named it Phoenix Fuels Life.

History: Prior to this venture in fuel retailing, Uy’s family has been distributing petroleum products to various commercial entities in Mindanao through their family business, Davao Oil Terminal Services Corp. (Dotsco)

Evolution: Dostco was renamed Phoenix Petroleum Philippines Inc,

Fighting stance: “I figured that if we became an independent player and put up our own stations, we could become the fourth dominant player in the market. We were poised to get a 25-percent market share in the long-term,” Uy said.

Breakthrough: Phoenix has experienced significant growth. As of late 2009, the company has grown to 112 gas stations nationwide, 82 of which are dealer-owned and operated. In October 2008. Phoenix opened a Marikina City station, its first in Luzon.

Tip: “We had to work extra hard to establish our brand and have name recall,” Uy added.


 

2.    Thirsty? Juices and Shakes

Owner: Manuel Pages

Business concept:  Fruit shakes and juices cart

First salvo: Pages said he came across one of the outlets of Thirtsy? in Cebu City in 2006 and found out that although the business was doing fine, the owner was not hands-on.

History: In that same year, Pages resigned as the head of the Visayas and Mindanao operations of a Canadian company and bought Thirsty? for P250,000.

Evolution: Seeing the potential of the fruit shakes and juices cart, Pages wanted to expand the business aggressively soon after he acquired it. Pages then sought to build the Thirsty? brand and image, changing its logo in the first place.

He commissioned an artist to give it a fresher look to make it appeal to the health-conscious market. Then, he changed the labels, cart design and the uniform of the crew to go with the new logo. He also standardized operations and trained the staff about the product, the proper way of running the cart and most importantly, on costumer service.

 

Fighting stance: Building a brand like Thirsty? did not only bring success  to Pages but also confidence – in March 2007, he acquired Moon Café, a nearly dying restaurant in Guadalupe, Makati City for P700,000. He renovated the restaurant and improved its menu for an even greater amount. Now Moon Café has nine outlets, four of which are franchised.

 

Breakthrough: Now Thirsty? has seven outlets in Manila and around 100 in Visayas and Mindanao, 30 of which are franchised.

Tip:  Pages said acquiring an existing business has its own advantages over starting a new one:

"First, it already has loyal customers. Second, the recipes of the product are already set. We just had to improve the existing recipes. Third, you have loyal employees. For Thirsty?, two of its five original employees are still with us, while for Moon Café, all of its original employees are still with us.”

3.    Citydrug 2-in-1 Drugstore

Owner: Francisco Pacheco Jr.

Business concept:  A drugstore selling generic medicine

First salvo: In 2003, Pacheco put up his own pharmaceutical business and in 2008, he put up Citidrug to sell low-priced branded and generic medicines in Ligao City, Albay.

History: Pacheco recalls that while he was running his distribution business, he saw the potential of offering affordable medicines to the public. Even while he sources his products from the same suppliers as Citidrug’s competitors, Pacheco has chosen to cut his profit margins on branded medicines in order to offer cheaper medicines.

Evolution: Because Citidrug was the very first pharmacy in Albay offering affordable medicines, people have been giving Pacheco good business. Citidrug’s first outlet in Ligao served about 100 customers a day in its first year of operation.

Fighting stance: “My experiences in my past work and distribution business really prepared me in starting Citidrug.” Pacheco says.

Breakthrough: After the first outlet in Ligao, Pacheco was able to expand Citidrug to three outlets – in Ligao and Polangui – in a span of three months.

Tips: Armando Bartolome, president of GMB Franchise Developers shares how a provincial franchisor can penetrate the Metro Manila market successfully –

•    Know the city culture – “Some franchisors opt to set up a company-owned store in Metro Manila first to test the waters.”
•    Know where to position and where to look for franchisees.
•    Look for a possible supplier you could connect with.
•    Put up a commissary. Especially for food businesses, it’s easier to make your products in a commissary, instead of transporting raw materials and supplies to franchisees every so often.
•    Join trade fairs to gain exposure. Features in magazines, newspapers, radio and the television also helped to find potential franchisees.