Franchise industry seen contributing $24 billion to PH economy by 2020

Despite the lack of government support, the domestic franchising industry is flourishing with expected $24 billion in contribution to the local economy by 2020 from the current $18.1 billion.

Richard Sanz, president of the Philippine Franchise Association (PFA), said this robust growth brings closer to the industry’s goal to become the franchise hub in Asia.

At the press conference for the Philippine Franchise Asia 2018 scheduled on July 18-22 at the SMX Convention Center, overall event chairman Christopher Lim there have been increase in participants to 60,000 for the three day event from last year’s 52,000 visitors.

With the theme “Be The Boss”, this year’s franchise event will feature a total of 700 brands, including 220 international brands from 15 countries.

Lim said the threeday event is expected to generate P3 billion in new investments within a year from deals that are expected to result in the establishment of kiosks, new stores and new franchises.

There are now 50 local brands that have gone international from 25 previously.

Samie Lim, known as the father of franchising locally and abroad, said that indeed the Philippines is moving closer to attaining its goal as global franchise hub.

“We are set as franchise hub with 220 international brands converging here and making us the biggest globally after Paris,” said Lim.

According to Lim, the US franchising show still is the world’s biggest but 80 of their participants are also locals. China and Japan are also big but these are mostly local franchises.

Alegria ‘Bing’ Limjoco, Francorp President and popularly known as the ‘mother of Philippine franchising,’ said one indication the Philippines is attaining its goal is the fact that the country has produced the most number of certified franchising executives now totalling 250 CFE degree holders or an equivalent to an MBA.

Limjoco said the industry has grown despite very little support from the government.

Limjoco, who is also president of the Philippine Chamber of Commerce and Industry, said they are now working with the government in terms of promotion overseas.

“We grew without any government help, but since we work so hard our brands have become successful,” Limjoco said. Last year, the government partly supported their participation overseas to which Limjoco hoped to continue.

Limjoco even noted that failure rate has been small at 4 to 10 percent only with the majority of 90 percent have become success stories on their own.

This led to the senior Lim to caution against bogus franchises.

The younger Lim said that franchise investments of less than P200,000 have a higher failure rate of 50 percent.