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Local trade group says RP can be Asian franchise hub

PFA to host franchise expo to showcase Filipino franchise concepts, encourage new ones
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The Philippines, through the efforts of the Philippine Franchise Association (PFA), is now positioning to become the franchising hub of Asia. And this is an opportunity that Filipino entrepreneurs should pounce on according to PFA chairman emeritus Samie Lim.

“I foresee the Philippines as the franchising gateway for the rest of Asia. We will become the regional center and master franchiser in Asia and then just do subcontracts in other Asian countries,” Lim told Entrepreneur.

A FRANCHISE GATEWAY

According to Lim, Filipinos are probably the most global people of all, being under the Spaniards, Americans and Japanese for several centuries, aside from hosting several international communities here. The country also has nine million overseas workers working in different capacities abroad.

Another thing going for the country is the Philippines’ close central location, making it an ideal center for processing documents, and fast tracking franchise transactions. The country also boasts 20 Certified Franchise Executives (CFA) and 50 more are in the process of acquiring the title, the most in the region.

“So if you want to introduce your franchise in the region, you can get a Filipino to do it. You can set up a successful prototype store in the Philippines and train your people from all over the region here. It would be a lot cheaper if you would do the training here than send your people to Europe where your operation is based,” Lim said.

So in the near future, Lim said franchising will be “one of the biggest exports of our country.”

The dollar earnings, he explained, will come from multiple streams. These are the payment for the franchise fee, sales from the transport of ingredients and other raw materials, the people that will serve as managers, royalty fee and advertising fee.

EXPORTING CONCEPTS

With Filipinos known to come up with unique and creative franchise concepts, it’s only a matter of time before the country starts exporting these ideas to neighboring countries, Lim said. With this in mind, the PFA has lined up several initiatives that would set the foundations for the Philippines as Asia’s franchising hub.

In fact, the association has expanded its incubation and international pavilions at its upcoming Philippine International Franchise Conference & Expo 2009 at the Crowne Plaza Galleria Manila on July 1 and 2.

The franchise concepts in the incubation hall, which is subsidized by the PFA, are those with strong potential but are not yet ready to franchise. The PFA assistance includes capital, technical know-how, supplies, packaging and logistics.

Among the graduates of the incubation hall are Reyes Haircutters and Waffle Time, which have gained success in other countries already, and downstream oil industry players such as SeaOil and UniOil.

The PFA also launched a P3-million fund to develop emerging concepts, micro, small and medium enterprises.

The group also veered away from its previous practice of featuring only one country for the Expo. This time there will be concepts from United Kingdom, France, India, Korea, Malaysia and Indonesia, among others, that will be on display at the show.

 “We are bringing the best concepts in the world to benchmark with our own,” Lim said.

EXPLORING E-COMMERCE

This is also the first time that the PFA is introducing the e-Commerce side of franchising.

“We invited the website developers, software developers and schools and we asked them to have specific focus on franchising, like designing franchise stores, and websites for franchise. This is an important takeoff this year. If we want to go international, we need eCommerce in it,” he said.

Also, believing that the next wave of franchise concepts will be coming from Europe, the PFA sent a 12-man team there to participate in expos, explore potential partnerships, learn the new trends and promote the Philippines as the franchising gateway to Asia.

Lim said Europe used to ignore the Philippines. Now, with the global business in a bad state, the Europeans are looking for new markets for their concepts. Having the most established franchise industry in Asia and with a population of 90 million, Lim said the Philippines will be a prime target for the Europeans.

On the other hand, the European concepts—with their “exotic” nature—plus the discount of up to 50 percent that they are giving, will surely be an attractive business proposition for Filipino entrepreneurs.

The PFA initiatives to prepare for international expansion will then culminate at the World Franchise Congress 2011 in Manila.

“We are bringing the World Franchise Council of about 40 members and the Asia-Pacific Franchise Confederation of 10 members for the international franchise conference and exhibit and our target is for all these people to bring home at least one or two Filipino concepts,” Lim said.

The franchise industry in the country started 17 years ago with just 45 franchisors, 80 percent of them foreign concepts, in 10 industries. Now, there are already about a thousand mature franchise concepts in the country, with the home-grown segment taking the larger pie at 60 percent. Also, about 40 locally bred concepts already have presence in other countries.

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