Thursday, 2 July 2009

Philippine franchising industry seen to grow 10% in ’09

Max V. de Leon
Business Mirror

THE Philippine franchising industry is poised to grow by up to 10 percent this year, driven by the rapid expansion of locally bred concepts both here and abroad.

Robert Trota, president of the Philippine Franchise Association (PFA), said even with the crisis, none of the group’s members have indicated that they will be experiencing decline in sales this year.

“No one came and said, ‘We are down this year.’ Some are saying they are up 3 percent at the minimum to as high as double digit,” Trota told reporters.

With this, local brands such as Mang Inasal and Generics Drug Store have set impressive expansion targets of more than doubling their current number of stores.

Some have also set their sights abroad such as Tokyo Tokyo and Potato Corner. Other homegrown concepts such as Max’s Restaurant, Jollibee, Reyes Haircutters and some fashion brands like Bench are also increasing their presence in other countries.

Trota said the industry has lots of reasons to be bullish, especially with more prospective franchisees expected to come in to their fold as a result of the early retirement and retrenchment that was precipitated by the crisis.

Also, Trota said remittances from overseas Filipino workers are still growing.

Aside from this, Trota said the banks in the country are willing to lend to the franchise industry, with the Bank of the Philippine Islands (BPI) promising to give loans to those that will get recommendation from the PFA.

Samie Lim, PFA chairman emeritus, said when the economy is bad, more people are buying franchises, particularly those who were retired or retrenched.

“They have the money, the time, the training as some of them were former managers, and they have the connections. These are the recipes that you need to succeed in franchising,” Lim said.

Trota said the PFA currently has about 240 member-brands. About 65 percent of them are homegrown. In 1995, he said, the industry was 85-percent foreign concepts.

Lim said there are 30 more local brands that are going international.

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