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Franchising for brand building and expansion

Learn how franchising, distributorship and customer relationship management boost sales.
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From just six stores in 1999, it is undeniable that franchising has been Netopia Internet Café’s magic bullet that enabled it to widen its reach at an exponential rate. Franchising, in the words of Armando Bartolome, president of GMB Franchise Developers, “is a strategy, a way of selling your business by inviting people to a concept.”

 

As a marketing strategy, franchising gives a business the double advantage of building its brand while extending its reach to previously untapped markets. Netopia Internet Café is one of a slew of Filipino-owned companies that have of late parlayed their franchising foray into a multimillion-peso venture. Constant innovation and brand building have enabled Netopia to expand its franchising base, earning for it franchising citations for the last couple of years. Today, it generates an average of 300 to 500 transactions per outlet, and all stores can attract as many as 80,000 clients per day.

 

The Netopia brand name was envisioned to become a “digital paradise” for its clients, and this vision was what inspired Axel Kornerup to name the company Digital Paradise Inc. as he and his friends were setting it up in 1996.

 

Kornerup and his partners, then in their late 20s and holding day jobs, opened the then eight-workstation Internet café along Katipunan Avenue in Quezon City so they could play LAN (Local Area Network) games and also offer computer gaming to avid players like them who could not afford high-speed Internet access at home. They pooled about P650,000 from their personal savings to build the store; buy new computers and peripherals, standard routers, and switches; securing permits; hiring personnel; and paying rent for several months.

 

Netopia’s first customers were acquaintances. In 1999 when it had been operating six branches, they got business associates as their first franchisees. Netopia also accepted more investors, including its former president, Raymond Ricafort, and ePLDT. Patrick Ricafort, assistant vice president for business development and franchising, recalls Netopia joining franchising expositions to reach as many prospective franchisees as possible.

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Franchisees can do things that we can’t,” explains Ricafort, noting how important it is to have other people help you stay involved in the business and maintain your standards. Ricafort says that even though Netopia has area and cluster managers assigned to different locations, the franchisees themselves are more familiar with their respective markets and can help Netopia extend its reach.

 

From servicing 100 customers daily in its first store, Netopia now attends to some 75,000 to 80,000 customers, and sees its client base growing with its continuing expansion and marketing push. It offers special discounted rates for frequent customers who sign up as members and is upgrading its customer service standards with the establishment of the Netopia Training Academy in 2005.

 


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