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THE
Philippine franchising sector continues to be an
important driver of economic growth and national
productivity, contributing an estimated P106.75 billion
to the nation’s economy in just three years.
A study
undertaken by the Philippine Franchise Association (PFA)
in collaboration with the University of Asia and the
Pacific (UA&P) indicated that, approximating the nominal
GDP growth rate of the Philippines itself, initial
results show the franchising sector has accounted for 5
percent of the country’s total gross domestic product
(GDP) for the years 2005 to 2007.
Franchising also proves to be an important enterprise
creator and job generator, the study showed: It created
an estimated 200,000 franchise outlets with an average
of four to five employees per outlet, or almost a
million Filipinos nationwide; and it effectively
promoted economic dispersal, as gleaned from the
franchise outlets’ location.
While
the bulk is still located in Metro Manila, Central Luzon
and Southern Tagalog are not far behind. Western Visayas
and Northern Mindanao top the list in the Vis-Min area.
“This is
because most of the market is still in Metro Manila,”
explained Bing Limjoco, PFA chairman. “This doesn’t
mean, however, that the successes of franchising are
confined to the capital alone,” she explained. “In fact,
there are many well-known national brands that
originated in the regional areas.” Perfect examples of
these are the Cebu-based Julie’s Bakeshop, billed as the
largest bakery chain in the country, and Iloilo’s Waffle
Time.
This
also speaks well of the franchising sector’s
contribution to countryside development and is a clear
indication that franchising helps level the playing
field by giving regional-based businesses the capacity
to expand its operations to the Philippine capital,
according to the study.
Besides
opportunity creation, employment generation and country
development, the franchising sector is a prime mover of
SME development. Most of the franchises in the country
today—even those considered large scale—started out as
small or medium or even micro enterprises. Jollibee
started out as an ice-cream parlor; Max’s Restaurant,
Goldilocks, Red Ribbon and many others started out as
micro family businesses.
Aside
from regional-based businesses like Julie’s Bakeshop,
Waffle Time and other emerging brands like Bread and
Butter, there are also more than 20 Philippine franchise
companies doing business overseas. These operate in
Asean, the United States, Canada, the Middle East,
China, India and the UK. While most of these companies
target the huge and still-growing market of overseas
Filipinos, they are also making progress in going
mainstream in the countries they are operating in. Some
example of these Filipino franchises slugging it out in
the global arena are PFA members Jollibee, Chowking, Red
Ribbon, Goldilocks, Potato Corner and Reyes Haircutters,
among others.
Philippine franchising enjoyed unprecedented growth
under the PFA, making the Philippines fourth in the
world and the leader in the Asean region in terms of the
number of franchise concepts and franchise outlets.
Besides fostering an environment of excellence that
equipped franchises to be more globally competitive, the
PFA pushed for the development of the Fair Franchising
Standards, which ensures just and mutually beneficial
business dealings between franchisor and franchisee.
PFA will
hold a franchising conference on July 9 and 10, at the
Renaissance Hotel in Makati, which will feature
international and local franchising experts. |
