Franchising a Business in the Philippines

by Gily Tenorio on September 6, 2011

in Business

One way to grow and multiply the money you have is by building a business. Almost all big companies, started from a small business in the past that became so profitable and well-known. Just to name a few, you can see that in Jollibee and SM.

Nowadays, there are two ways to begin a business: franchising and self start-up. There are pros and cons for these two types, so depending on your current situation and financial status you can choose which type is applicable to you.

Most people who go to franchising are those who have zero or no background in doing a business in the past. They are the kind of people who also want to start quick in the business they want to enter.

Franchising is a kind of business wherein the owner of the business called franchiser will grant all the rights to a franchisee to carry out his or her business according to the franchise contract agreement. Franchisee are those who buy a franchise. Some of the popular franchise businesses are Jollibeee, McDonald’s, 7-Eleven, Mini- Stop and other food carts and fast food chains.

Pros and ConsĀ  of Business Franchising

For the past two years, I ‘m seeing a lot of franchising opportunities in the Philippines particularly in the food cart business. There are several advantages and disadvantages of business franchising that you should know and weigh so you can decide if it is right for you.

I will start with the pros of franchising. According to the study, there is a higher probability that a business will succeed if it is a franchise. Some articles pointed out that the percentage is in the range of almost 90%. I think these businesses are those who are already established, well-known brand and outstanding in their industry.

The high success rate of franchising can be attributed to the established system of the business you want to franchise. For example, a Jollibee franchisee will be more successful than an ordinary food cart franchisee since the brand is already well-known and the system for doing business is existing for many years. It is a proven business, all of the problems of a start-up business have been eliminated and improved.

One of the disadvantage of franchising is there are several restrictions in conducting the business. As a franchisee, you will be required to follow a businessĀ  process that you should always follow. You cannot also sell other products other than the stuffs in your business franchise.

How to Franchise a Business in the Philippines

Franchising a business is a legal contract between the franchiser and the franchisee so you should be aware that involves big responsibility before you enter or start the business you want. Understand and study first the business, make extra effort to research in the Internet how the business is making money or if there is a strong demand from customers about the product they are selling.

If you can be patient, there are lots of information you can read for free in the Internet about the business you are planning to invest in. It would be also helpful if you can meet some franchisee of the business you want. Maybe you can ask them some basic and non- confidential questions just like how is the business doing these days or are there many customers buying the product.

Usually, if you are ready to franchise a business you need to visit the franchiser’s office so you can understand more about the business. Almost all are offering seminars for the franchisee. I know there are also trainings and business orientation so you will know the over all mechanism of the business you’re going into.

You should also provide some documents and ID as requirements for franchising. If you don’t have any problem, you can proceed to the payment of your franchise. After you paid, in case of food cart, that’s the only time your business will be set-up and start moving. But you don’t need to worry about the time, because it will be fast, maybe just several days of waiting.

Before you invest in a franchise, it would be advisable to understand first what you are buying. Understand the business and the product it sells. Study how the business is carried out and the system it established.

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{ 3 comments… read them below or add one }

ruperto nambio March 18, 2013 at 06:06

Hi Gily,
Last 13th March, 2013, I sent application each to FAMI, CitisecOnline with initial starting amount for investment. I would like to try these two investing houses.
Yesterday, Sunday, 17th March, my daughter and I applied a BPI-euro-peso accounts to start stocks buying thru BPI. I/we will see if UTIF shares goes up, after a test period of two years or more. Now, continue to email me with updates in investing. By the way, what do you think of BO Sanchez, “Truly Rick Club”?

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Gil March 20, 2013 at 03:16

Hi Ruperto,

That’s good to hear that you started investing in stocks. I heard about TRC but I don’t have enough idea about it. One blogger said that the club gives recommendation on what stocks to buy based on buy below price of Citiseconline.

Reply

Accounting December 27, 2012 at 03:36

Here is good information about Philippines Business registration
http://www.sas-ph.com/index.php?p=1_7_philippines-business-registration

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