THE franchising industry has the potential to become the country’s top dollar earner, according to the Philippine Franchise Association (PFA).
In a press briefing on Thursday, PFA President Alan Escalona said it is not enough for franchisers and Filipino entrepreneurs in general to merely sell their products and raw materials abroad.
“Bringing local brands abroad is not only a pride but it has increased the dollar-earning potential of the Philippines, which contributes a big portion to the GDP. Aside from the OFWs [overseas Filipino workers] and the call centers, franchising has become a good dollar earner,” Escalona added.
PFA Chairman Emeritus Samie Lim said franchising can easily be billed as part of the top 10 dollar earners in the economy.
He added a local Filipino brand can earn as much as $30,000 in franchise fees alone per store. If the brand has 100 stores in a foreign country, this could easily reach $300 million. He added that franchisers can also earn 5 percent to 8 percent of sales in these stores.
They can also earn dollars from markups on products they sell abroad, as well as 2 percent to 3 percent more on advertising. The PFA leader said the key in franchising is the “multiplier effect”, which allows businesses to earn more from various stores worldwide.
Franchise Asia Philippines Expo Chairman Jose P. Magsaysay Jr. added that franchisers can also earn extra in placement fees.
Magsaysay said that based on their experience at Potato Corner, some franchisees seek their help securing workers for their stores abroad.
“We have several revenue streams when we go franchising abroad. And that’s a good opportunity because we not only earn royalty, we earn from supplies, we earn from franchise fees and then you earn from profits,” Magsaysay said.
“Some of our franchise adventures outside the Philippines are joint ventures, some are master franchise, some are single stores, so there’s so many ways you can cut a pie when you go abroad. It’s so exciting,” he added.
Apart from the revenue potential, local franchisers can also create more employment for Filipinos. PFA Director and Oryspa founder Sherill Quintana said their company would refuse clients proposing to manufacture their products elsewhere.
Quintana said this is the company’s way of showing its commitment to the quality of Filipino products. They said Filipinos are capable of creating world-class brands. “We created millions of jobs, we are going to create millions of jobs and more entrepreneurs in the coming years,” Escalona said.
In 2016 cash remittances from Filipinos working and living abroad reached a record $26.9 billion, up 5 percent. The business-process outsourcing industry, meanwhile, is seen to rake in $38 billion in export revenues by 2022, from its projected $25-billion earnings in 2016.
Image credits: Nonie Reyes