The International Organization for Standardization, or ISO, has been called many things--the stamp of quality, the benchmark of excellence, or the seal of approval--but what is it to franchises? Why would franchisers or franchisees even bother to get it, when it comes with a steep price tag and a tedious process?
Nevertheless, an increasing number of local companies have jumped onto the ISO-certification bandwagon, and for good reason. It makes good branding sense to have your business bear a seal of approval. In the franchise business sector, however, only a few are eager to jump in, and mainly because of the steep cost of getting certified.
How costly is an ISO certification anyway? ISO Consultant Gary Manalo says the cost varies depending on the organization size, complexities of processes and activities, third-party assessor or certifying body, and resource requirements. "Conservatively, it usually costs from P200,000 to a high of a million pesos," he says.
According to industry sources, companies usually shell out around P500,000 to pay for consultants who will help the company document its policies and procedures, which will guide the organization in implementing, maintaining, and continually improving its Quality Management Systems or QMS. The amount excludes payment for the independent certification body that will evaluate a company's QMS, labeled ISO 9001.
For Pacita Juan, owner of the Figaro Coffee Company, her financial and resource investments were worth the peace of mind she now has after her company got the ISO certification in December last year. Earning for Figaro the distinction of being the first specialty coffee franchise company, and the first in the food and beverage industry, to have acquired an ISO certification is proof that trailblazers get rewarded. With the certification, Juan doesn't have to be in two places at the same time attending to a zillion matters about growing the Figaro franchise network.
"Now, I can sleep soundly even while I'm in another time zone, rest assured that the system will run even without me around. Before if I were to tell my people that they need to expand five stores in this area and 10 stores in that area, I would need to choose the site among other things. Now, not everything relies on me. There is a system already that runs without me saying so," says Juan.
Figaro is the first to complete the Quality Management System in franchising that involves design, development, and provision of franchising services. "What we franchise is not the way we make coffee but how we franchise Figaro. Since we got our ISO 9000 series 2000 certification, we follow the same set of procedures every time, from selection of franchisees and site selection to outlet setup and monitoring and review. It has become more systematic," explains Juan.
The cost aside, many are daunted by what they believe is a tedious process involved in applying for and getting an ISO certification. But ISO experts say the entire process takes only a year or less on the average. Figaro was ISO-certified in one year. "Starting from scratch, the ISO certification process may take a year. But if the organization or the one leading the project is already adept with the ISO requirements, six to nine months are a possibility. ISO certification is normally good for three years with a semi- or annual surveillance," cites Manalo.
And then there's the equally important issue of choosing your consultant and certifying body. Juan says getting the right consultants and certifiers is crucial because not everyone that applies for certification can get one. "We make sure that we have the best people who can help us in the process," says Juan. "We tapped as consultants SGV, and TUV is our certifier. Not only were they highly recommended to us, when we met their lead people, we knew that we could work together."
Most consultants design an ISO package around a client's circumstances and capabilities. Manalo cites as an example clients who opt for assistance in mapping and system documentation only, while there are others who avail of a comprehensive package that includes training on key ISO requirements, system documentation, system or document review, process re-engineering, mock audits, and other special services that would help them get certified.
"Normally, I advise my clients to choose the registrar that is respected, reputable, and recognized in their industry. Then of course, there are other criteria such as feedback from their clients, cost, qualification of auditors, and customer service," he says.
Manalo is optimistic that there will come a time when companies would see an ISO certification not as a cost but as an investment. Adds Juan: "It will cost me the same or much more to have the headache, so I might as well have it done and have the peace of mind that it offers. Once you get the system together, it's smooth-sailing from then on."
WHAT THE NUMBERS MEAN
ISO consultant Gary Manalo says ISO 9001 refers to Quality Management System, which builds a framework that would allow an organization to provide quality products and services to its customers, as it assures them that this seal means the company is offering top-notch products and services. The certification, however, is confined to the 'process standard' and not the 'product standard.' "ISO 9001 certifies the procedures, not the actual products and services," says Manalo.
ISO 14001 refers to Environmental Management System. It guides the organization on how to best manage their practices towards the protection of the environment, even as it shows the public that the organization is responsible for and committed toward environmental protection.
Here's a quick guide on how you can get your processes certified:
- Go to the Department of Trade and Industry's Bureau of Product Standards--the country's National Standards Body--for a briefer on ISO certification.
- Identify the area where you want to seek an ISO certification. Is it mapping? System documentation? Training on key ISO requirements? System or document review? Process re-engineering? Or mock audits and other special services that would help achieve certification?
- Set your own criteria in choosing the registrar or certifier.
- Make sure that you choose those that are accredited and authorized to issue the certificate.
The pros of ISO
ISO consultant Gary Manalo says a lot of tangible benefits come with being ISO certified, among them are lower costs arising from producing quality products, fewer delays, and forming a leaner, more limber company that is quick to grab opportunities and expand in previously untapped markets.
Figaro's Pacita Juan says all franchising companies stand to benefit from an ISO certification. "If people are serious about building a good business, they will be concerned about standards and quality management systems. When you have a brand, you are conscious about what people say. With ISO, we can tell our franchisees: "You would be proud of our brand. I'm doing it for you.'"
The ISO certification can also be a company's ticket to the global market. Multinational companies prefer to deal only with ISO-certified suppliers or outsourcers. Juan admits that Figaro's ISO 9000 certification would serve them well in international markets.
Manalo believes it's just a matter of time before an ISO certification becomes mandatory because customers are becoming more and more discriminating, while competition is getting to be very intense. "ISO is a very good market- and competitive-differentiator. If management adheres to and uses the system well, it will help them expand their market share and grow their business," he says. "It will always be an advantage for an enterprise to be ISO certified when dealing with international customers."
Figaro Coffee Company
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