Tuesday, 4 May 2010

Manila looks set to become franchising hub in Asia

Max V. de Leon
Business Mirror

AFTER business-process outsourcing (BPO), franchising is now seen as the next biggest employment generator and catalyst for real-estate development as more foreign brands locate to the country and make the Philippines their franchising hub for Asia.

Samie Lim, chairman emeritus of the Philippine Franchise Association (PFA), said the mature franchising industry in the country, as shown by the huge number of franchisers and certified franchise executives (CFEs) here, has made foreign brands recognize the Philippines as the most logical base for their operations in Asia.

Proof of this, Lim said, is the expected attendance of some 30,000 visitors and about 350 exhibitors in the 18th edition of the Philippine International Franchise Conference and Expo (Pifce) from July 14 to 18 at the SMX Convention Center.

“The US Franchise Show this year in Washington, D.C., which used to be the biggest in the world, only had 175 exhibitors. We will have 350 exhibitors this year, so this means our Franchise Show will be the biggest in the world,” Lim told the BusinessMirror.

Boosting Manila’s positioning as the franchise haven in Asia, Lim said, is Manila’s hosting of the World Franchise Congress and the Asia-Pacific Franchise Confederation meeting next year.

Lim disclosed to the BusinessMirror the new wave of foreign franchisers that will be putting up operations in the country.

The list includes International House of Pancake of Canada, Denny’s of the United States, Sarku Japan, Value Place Franchise Services, The Learning Experience, Yogen Fruz, Fast-Fix Jewellery and Watch Repairs, Fastruckids, House of Tutors, Integrated Water Systems, Kayway Enterprise LLC, Magic Food USA Inc., Planet Smoothie, Reva Slim Weight Loss Center, Stratus Building Solutions, The Lite Choice Co. Inc., Tropical Smoothie Café’, and Zips America’s One Price Dry Cleaners.

Lim said these companies will be looking for Filipino partners to serve as their master franchisees.

Aside from putting up franchise networks in the Philippines , the Filipino master franchisees will also represent the brands in other countries in the region, Lim said.

For the Asian brands, the Filipino partners will also be the link to US and Europe.

Lim asserted the strong program for CFEs in the country is a major contributor to the strong growth of franchising in the country.

“We have the highest number of CFEs in Asia . Currently, we already have 30 graduates and more are taking the program,” Lim said.

The franchising sector accounts for 5 percent of the country’s gross domestic product and contributed 25 percent to the retail sector in 2008.

Last year, Max’s president Robert Trota, also the current president of PFA, said the industry grew by 20 percent, and is expected to grow by another 20 percent to 30 percent this year.

Lim said the entry of more brands to the Philippines will trigger a strong upsurge in retail space demand and employment.

“Each franchisee hires an average of 12 people directly, and indirectly provides jobs to another 22,” Lim said.

The expected boom in the sector, according to him, also considerably increase the tax base, as franchisers maintain good accounting practices because of the payment of royalties. The American and European brands, on the other hand, will further modernize the technology and know-how of the local entrepreneurs.

The Philippines currently has the second highest number of franchisors globally at 775, and franchisees at 100,000. They collectively employ about 600,000 individuals. The US has the highest number of franchisors at 1,400, and franchisees at 350,000, with total employees at 9 million.

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