The Philippine franchising industry is projecting a 10-percent to 13-percent growth in the next five years, with the food, retail, and service sectors driving the growth, according to an official of the Philippine Franchise Association (PFA).
“The 10 percent is our projection for next year. So, on a high side or a high note, we are looking at 13 percent. So, of course we’d like to be able to seize that for next year, before next year finishes. But our planning is really on a five-year stretch,” Sherill R. Quintana, chairman of PFA, said at a media briefing in Quezon City on Monday.
In 2022, PFA said the industry generated P27 billion in revenues. For 2023, the industry is targeting a 13 percent growth from last year.
The PFA chairman noted that food, retail and service sectors are expected to drive this growth. For the service sector, Quintana said, “With the service sector really receiving the clock end during the pandemic, we’ve seen a lot of growth…for the service sector where there’s a clamor in the overseas market. But of course food has been a winner through and through.”
For his part, PFA President Chris Lim said the food sector has been driving the franchising industry’s growth a lot, while the salons and spas are yet to recover next year.
“A lot of the food players—they’re probably higher than pre-pandemic levels already. Services in the industry have lagged behind mga salons, spas, [as] some of them have not even fully opened yet. But we see a lot of them recovering and opening by next year,” Lim said.
But, Lim noted that among the sectors, retail has a “faster turnover” since “they are much faster in terms of bringing these brands globally.”
The PFA president, meanwhile, noted that a new sector that the franchising industry would have to watch out for is Agricultural franchising. “There’s a very big push for Agriculture. There’s a big push in agriculture here and franchising can serve that sector a lot,” Lim said.
For his part, Richard Sanz, the overall co-chair of Franchise Asia Philippines 2023 and Founding chairman and CEO of Bibingka chain BBK Group said, “One more thing that we observe that can possibly drive the growth for the next 5 years, we have seen the trend on drinks, especially coffee.”
“During the pandemic we noticed that there were a lot of home brewers who really specialized or upgraded their coffee experience. When things opened up, there was a void that needed to be filled in the urban sector’s cities and this is driving so many coffee shops to open,” Sanz added.
Meanwhile, this year’s International Franchise Expo is seen to gather over 1,000 international and local franchise brands in the food, retail, and service sectors.
Expo Committee Chair and Bo’s Coffee President and CEO Steve Benitez said there would be special zones for Emerging Franchises, Highly Franchise-able Concepts, Business Solutions Providers, among others.
Coinciding with the Expo is the “twin meetings” of the Asia-Pacific Franchise Confederation (APFC) and the World Franchise Council (WFC) hosted by the Philippines from October 25-27, 2023.
In a statement released on Monday, PFA said, “These events, along with the other activities on Franchise Asia week, will be attended by hundreds of delegates from 30 franchise association members of the WFC, including 16 from the Asia-Pacific region that comprise the APFC and 16 European national franchise associations.”