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Six Issues and Lessons in Franchising

This decades-old Chinese restaurant didn\\\'t know it was a franchiseable business until it took the plunge
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To veteran foodies, it is a surprise why Ling Nam, the 60-year-old noodle house from Manila’s Chinatown hadn’t tried franchising until 2006, when its competitors both old and new have been at it for decades.

Although the business has established a trusted brand name and a consistent quality of its noodles and dimsum products, its conservative management took things critically before Ling Nam was able to offer a total franchise. [See eight requirements to franchise a business here]

“We do believe franchising is a way of expanding,” says Peter Fung, chairman and president of Tri-Mark Foods Inc., which owns and manages Ling Nam. “However, it was only in 2004 when we hired franchising consultants to create a feasibility study for us.”

But halfway through the study, the franchise experts advised Fung “to take a ‘leap of faith’ and try launching the franchise program to the public.” He admitted the idea was more of getting a feel of how the public would receive a franchise from Ling Nam. [Read about Pinoy Agri-Kart: The Social Franchise Opportunity here]

When it joined the Bakery World 2006 Exhibit in January 2006, the Chinese restaurant received good reviews and feedback from their fellow exhibitors, guests and the general public.

That convinced Fung it was time to franchise the business. A few months later, Ling Nam opened three franchised stores in Vigan (Ilocos Sur), Banaue St. in Quezon City and at the Liberty Plaza on Shaw Boulevard in Mandaluyong City.

“Everything just happened so fast. It was good that our instincts and experience guided us through the first phase of our franchise development,” explains Fung. But even with that quick accomplishment, he recalls numerous challenges that arose as they were starting the program. [See three franchising tips from Goldilocks here]

“Since we plunged into the franchise business before the feasibility study was finished, we had to fast-track everything, and we depended a lot on instincts and business intuitions in our decision-making process,” he says.


Page 2: Six Issues

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