Picture 27

The Philippines emerged as the fastest growing economy among 11 selected Asian economies in Asia in the first quarter of this year, outperforming China (6.7%). Adding spice to the resilient economy is the ASEAN Economic Integration where Philippine companies have taken the big leap to go global. To sustain the optimism, the presumptive President Rody Duterte will now play a much bigger role in key areas related to governance and the promise of a better quality of life for the majority of the Filipinos.

WHY GO FRANCHISING?
While some Filipino entrepreneurs have decided to expand their businesses by putting up company-owned stores, more and more Filipinos have found that the best way for a business to expand is by cloning itself — through franchising via the local, regional and international route. And with the success of many firms in franchising their brands, it is no surprise that even bigger organizations are jumping into the bandwagon and now venturing into franchising to further expand their business.

WORKING AFTER RETIREMENT: LONGING FOR QUALITY OF LIFE!
In 2005, CEO and Founder of Small Business Trends, Anita Campbell, wrote about the changing face of retirement:
“In the US, it used to be that someone reached the magic retirement age of 65 and stopped working. Period! Now many more people ‘retire’ earlier, but their retirements are not traditional anymore. Retirees take jobs from time to time, and they even start and continue their own businesses during their ‘retirements.’ Their state of employment is based not on some grand career plan set in motion 30 years earlier, but rather on their needs and desires this year or this month. If they need the money or if they simply want more challenge and social interaction, they may take a job or start a business.“
Personally, as an international business consultant, from then on up until 2016,  I’m pretty confident that a lot of the non-traditional retirements we’re seeing have less to do with a want and more to do with a need. In other words, these people need to make money — even though they don’t necessarily want to continue working.

BABY BOOMERS ARE STARTING THEIR OWN BUSINESSES
The Kauffman Foundation, in its report a few years back titled, “The Coming Entrepreneurship Boom,” stated that the highest rate of entrepreneurial activity belonged to the 55-64 age group. The report goes on to state that the average age of technology company founders in the United States is a surprisingly high 39 with twice as many over age 50 as under age 25.
But, they’re not all starting technology companies. Some of them are buying franchises.

THE FRANCHISE WAY
Buying into a proven business concept (which is what franchising offers) could be the way to go for those that have found themselves out of a job and close to retirement age.  And, while franchise ownership has its risks, it has numerous advantages, too:

  •     Proven concept
  •     Proprietary business systems
  •     Extensive training
  •     Grand opening assistance
  •     Powerful technology
  •     Buying Power
  •     Branding

And, let’s not forget speed. In an online report released by smallbiztrends.com, people that are nearing retirement age (who want to go into business for themselves) need to be able to open up their new businesses quickly. In most cases, new franchise owners can be up and running quickly.
In the Philippines, even with all the ups and downs, the last 10 years have made a big difference in the way Filipinos handle their businesses. They’re more open to trying new things, new markets. They’re more willing to take a chance in dreaming of bigger and more successful ventures.  And they’re no longer afraid of taking on the world head on.
Although franchises are not failure-proof, entrepreneurs favor the odds of better return on investment and profit, as well as tried-and-tested systematic business operations that they  provide. While the country’s franchising sector can be considered modest compared to the global franchising phenomenon, the time is ripe for Philippine brands to go global.

EARLY BEGINNINGS
Franchising in the Philippines can be traced backed to 1910 when Singer, the sewing machine  manufacturer, sold distribution licenses to Filipinos. In the ‘60s, A&W Restaurant came into the country also through franchising.
But it took decades before Filipinos caught on to the benefits of franchising.
It was not until the ‘90s when international companies realized the viability of franchising their brands in the Philippines. A study commissioned by the Philippine Franchising Association showed a 97% success  rate for franchises.
Despite its status as a developing country, Filipinos are known for their penchant for  shopping, especially when it comes to international name-brand items.
Today, PFA pegs the success rate of entrepreneurs who operate a franchise at a high 90%,  compared to the 25% for traditional retailers or independent start-up businesses.
“A franchise is for people who are not entrepreneurs — those who don’t know how to start their own  business,” said Samie Lim, founder and chairman of the PFA as well as president of consulting firm Francorp Philippines, Inc. “ A franchise  is for people who will follow rules because that is the formula. If you fool around with that formula, you will not succeed. A creative person will not be successful as a franchisee because he will fool around with the formula.”
Mr. Lim noted that franchising has caught the attention of Filipino entrepreneurs because this type of business poses less risk than most other businesses.

INDUSTRY GROWTH DURING THE ASIAN FINANCIAL CONTAGION
In an article, “Philippine brands set foot on foreign shores” written by Nuqui and Silva, they cited a US Department of Commerce’s National Trade Data Bank study highlighting the franchising  industry in the Philippines growing by 44% in 1997 and 25% in 1998 despite an unstable  economic situation.
PFA data show that the Philippine franchise industry grew from only 50 franchises in the early ‘90s to over 500 in the year 2000. Franchise industry sales grew from PhP30 billion  in 1997 to PhP63 billion in 1999.
“Since 1997-’98, people say businesses went down. I think most of the other businesses were affected…they stagnated after the Asian crisis. But franchising continued to grow and it is still growing,” Mr. Lim noted.
Ironically, he attributed the boom in franchising in recent years to the Asian financial crisis and the global economic slowdown that followed thereafter. He noted that “franchising is even better when the economy is bad” because when factories closed and people were laid off, they turn to entrepreneurship.

THE TIME IS NOW
For overseas filipinos who have spent a good deal of their professional life outside the Philippines and have the burning desire to own a business back home, its time to take the giant leap of faith towards financial independence and the elusive quality of life. You still have a good 20 to 30 years of productive life ahead of you. So stop procrastinating!
Its time to own a business and enjoy the fruits of your hard earned labor. sorianoasia@gmail.com.

Leave a Reply