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Pizza Pedrico\\\'s: Franchising is no fairy tale

Hard-headed dealers often come along
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Four small whole pizzas in a box, sprinkled with four different kinds of toppings. Such is the individuality—and freedom of choice—that Pizza Pedrico’s first presented to the market in November 2004.

Kerwin Tan, managing director of Pizza Pedrico’s, explains the concept: “Filipinos love to order family-size pizza. Ang nagiging problema, ang flavor lang na nauuwi sa bahay ay ’yung flavor na pinili ng bumili [The problem is, only the  pizza with the flavor chosen by the buyer is brought home]. Often, not all of the family members would like that flavor. This is why Pizza Pedrico’s decided to come up with four differently flavored pizzas in one box. We wanted to offer them a choice of flavors.”

The standard Pizza Pedrico’s box contains four pizza varieties: cheese, ham and cheese, chorizo and cheese, and sausage and cheese. The company developed thicker toppings while keeping the four mini-pizzas at the still-affordable price of P135. Each small pizza can also be bought individually at P39 to P59 depending on the desired topping.

Unlike other new businesses that struggle with both their financials and business systems, Pizza Pedrico’s benefits from the complete production, distribution, and marketing system of its mother company, Jimini Pizza.


Tan says that although Pizza Pedrico’s did not encounter problems typical to other startups, it initially did have a hard time managing hardheaded dealers. “Some dealers had their own way of doing things,” he explains. “They did whatever they wanted with the cart without complying with our [franchise] system, even if our system is a tried-and-tested one.”

When all remedies failed, Tan says, the company simply did not renew the franchise contract of the problem dealers.

Pizza Pedrico’s started franchising in August 2005, offering two franchise modes: full cart and satellite or countertop dealership. Franchisees are then allowed to recruit countertop dealers under the company’s dealership program so they themselves could expand their business.

While food-cart franchising has become well-known in the country, dealership franchising has not. Tan says that under their system, a dealer wouldn’t have to pay any monthly royalty fees to the company or any of their franchisees, regardless of whether he or she is running a full-cart operation or a countertop/satellite outlet.

For a full-cart operation, a prospective franchisee pays an upfront fee of P350,000 and a security deposit of P50,000. The amount is inclusive of the cost of the food cart, the initial stocks, the equipment, the utensils, and such marketing devices as the decorative balloon setup for the cart, the sound system, the mascots, and the marketing materials.

Investors who opt for a Pizza Pedrico’s countertop/satellite outlet need to pay the company only P25,000. The amount covers the cost of the equipment and the advertising materials. Tan says this concept of countertop or satellite outlet dealership allows Pizza Pedrico’s dealers to partner with other storeowners who would allow the mini-pizzas to be sold in their stores.

For more inquiries about Pizza Pedrico\\\'s, you may log on or call them through telephone numbers (02) 712.2568 or (02) 711.8101.



This article was published in the Aug. 2009 issue of Entrepreneur Philippines.

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