Franchises told to bite bullet, prepare for acceleration
Franchising, the proven business to easier and quick foray into business at higher success rate, also took severe beating from COVID-19, but an industry guru told players to bite the bullet and prepare for acceleration.
Samie Lim, known as the father Philippine franchising, said in a webinar hosted by the Philippine Franchising Association that all is not lost in business.
A COVID-19 survivor, Lim drew a parallelism of his fight and recovery from the illness to the franchising industry’s journey during this pandemic.
“I recently recovered from COVID-19, by God’s grace and mercy, I was given another chance to live and continue to be of service. It has been a long and difficult 60day journey, and as I recount my story, I couldn’t help but think of franchising and how my experience can be paralleled to the industry’s own road to recovery,” said Lim.
To recover from the disease and to survive in business, Lim cited the 3 As – Accept, Assess, and Act as soon as possible.
He advised franchise players to get a third party, particularly a Certified Franchise Executive, for an objective assessment of company’s health. He did the same by going to the doctors for assessment.
Next, he said, assess the viability of every franchisee. “Have a serious meeting with your franchisees and think of ways to keep the company afloat,” he said.
After the assessment process, the next thing is acceptance that you are sick.
“You have to accept reality, what COVID did, is doing and will be doing to your business. You have accept your company’s financial limitations and its ability to meet all the financial obligations, such as rental, payroll, utilities, maintenance of the commissaries, warehousing, and delivery. The final step is Act ASAP. “You should act ASAP to stop the bleeding, cut unnecessary operating expenses at this time, close underperforming stores that could not make more than the operating expense,” he said.
He urged to renegotiate suppliers terms, landlords, aggressively tap digital technologies, and implement health protocols.
Lim, who owns the country’s chain of home furnishing store BLIMs, added another A for Accelerate.
Lim noted that after the Great Depression in 1929 and the Asian Financial Crisis in 1997, franchising was one of the sectors that recovered the fastest and prospered.
He expects 2021-25 as the Golden Years for Franchising. This is because the industry has the biggest pool of potential franchisees.
He said the many vacant spaces will give a retailer the perfect opportunity to expand once lockdown is over, not only in the Philippines, but worldwide.
“After this crisis, new market opportunities will emerge.A new market/community will be created, as people migrate to a safer environment and less densely populated areas,” he said.
He expects new opportunities in the food sector: food delivery services, lunch boxes, dark kitchens, and healthy options.
In the retail sector, he said, new businesses will emerge like stores selling beauty products for clients to regain their pre-COVID beauty, vitamins stores, gardening, hobbies and less expensive ventures.
In the service sector, he sees the rise of nursing homes, retirement homes, caregivers and elderly care, clinics for family and marriage counseling and mental health, explosion of microfinancing franchises, home schools, professional cleaning services, columbarium and cremation services.