The next time you think of starting your first business venture, we have two words for you: Food and franchise. Experts say, you can even do that while you are living abroad, including Europe, so long as you’ve done your research and hired the right people.
According to the Philippine Franchise Association (PFA), the franchising model provides “high success rate” mainly because it allows a franchisee to benefit from the experience and wisdom gained by the concept originator.
Abby Alcaide, consultant at Filtrepeneur Franchise, Inc, agrees, “This [franchising] is already a proven formula which has already earned the business some confidence.”
But why food?
Alcaide says that food, being a basic necessity, quickly finds a ready market. “You don’t even need to sales talk people into buying your products. You can simply stand on the side waiting for a buyer to come to you,” says Alcaide.
Alcaide adds that there are various brands to choose from depending on your budget and interest.
For example, the Philippines’ number one burger chain Jollibee would cost a potential franchisee from P15 to 30 million inclusive of the costs in putting up a branch.
Meanwhile, smaller brands like fresh fruit shake marketer Big Chill charges franchise fee starting at P750,000, depending on the size and type of store.
“The franchise package includes location feasibility study, site inspection with market analysis, landlord negotiation and tenancy agreement oversight, shop financial planning and budgets, in house training of initial crew, and shop opening assistance among others,” says Phil Oakden, head of Big Chill.
Those with limited budget can choose from a slew of options. Filtrepeneur Franchise, Inc., (www. franchisefoodcarts.com) has at least 15 food franchising brands catering to those with small capital.
Alcaide says that about 70 percent of the company’s franchisees are returning Filipino expats from the Middle-east and Asian countries. They’ve had inquiries from the US, especially those who are working as nurses or physical therapists.
Franchising on a budget
A food cart franchise can cost as low as P25,000 already including the typical equipment to run the business as well as staff training.
“Franchisees are given training on managing their businesses which includes bookkeeping and taxing matters, which is also covered during the consultation phase, ahead of the actual training,” says Alcaide.
The training has to be attended by the franchisee and its staff, usually one or two, before they are allowed to operate the business.
“We make sure that the business owner and their staff are well-informed about what to expect in their franchise business before they are given the business package which include the food cart, signage and equipment,” explains Alcaide.
As an added security to the business operation, Filtrepreneur makes sure that the location of the franchise doesn’t compete with the company’s other brands.
“We also have locators that can suggest viable locations for a franchise applicant if they still don’t have an idea where to put their business,” says Alcaide.
On top of the franchise fee, a franchisee have to spend for utilities as well as staff salaries and rent which will be part of the business’ monthly operational cost. If the business is good, a franchise, according to Alcaide, can produce return on investment in two months on the average.
Alcaide says that a typical franchise needs to generate sales of at least P2,500 a day in order to recoup expenses, assuming rent is P10,000 a month.
“Of course business profitability depends on location. When the business is ideally located, return on investments can also be achieved as early as one month,” notes Alcaide.
PFA shares the following guidelines for those interested in venturing into the business:
1. Ask yourself why you want to own a franchise;
2. Look for opportunities that are in harmony with you and that greatly interests you;
3. Do your own research to have a complete understanding of the business, track record of the franchisor, and your personal resources, among others;
4. Look into the product or service and what makes it stand out among other businesses; and
5. Make sure that to get a good site selection. Ask a franchisor about the territory rights.
PFA also conducts seminar on wise franchise investment in partnership with Philippine embassies/consulates abroad.
This article was first published in the 3rd edition of The Filipino Expat Magazine.
Ruelle Albert Castro is a career journalist, learning the ropes of being the typical streetsmart guy. Part-cynic, part-optimist, story-telling (or chronicling your story) is his business.