The Philippine Star

‘Grow­ing busi­ness through fran­chis­ing is a ful­fill­ing mis­sion’

- Business · Banking · Philippines · Pennsylvania · New York City · York City F.C. · New York County, NY · United States of America · Chicago · Cebu City · Metro Manila · Manila · Middle East · Tokyo · Philippine Franchise Association · Chatime · Penshoppe

Fran­chis­ing is a proven and ef­fec­tive strat­egy to grow one’s busi­ness from one to many. To­day’s suc­cess­ful brands serve as proof that fran­chis­ing is the most flex­i­ble method for growth and has been tried and tested over time with a 90 per­cent suc­cess rate.

Fran­corp Philip­pines man­ag­ing di­rec­tor Noel Sig­gaoat is a pas­sion­ate ad­vo­cate of fran­chis­ing. Early on, he saw how sig­nif­i­cant an im­pact fran­chis­ing can make on the econ­omy be­cause it mul­ti­plies busi­nesses and cre­ates thou­sands of jobs. Self-ful­fill­ing role

Af­ter re­ceiv­ing his MBA from the Carnegie Mel­lon Univer­sity in Penn­syl­va­nia, Sig­gaoat worked in New York City as a fi­nan­cial sys­tems con­sul­tant. His job en­tailed help­ing the trea­sury de­part­ments of client banks un­der­stand their ex­po­sure to dif­fer­ent types of risks – in­ter­est rate, cur­rency ex­change, coun­ter­party, etc. – and man­age their port­fo­lios ac­cord­ingly. He was en­joy­ing life in the most ex­cit­ing city in the world and was do­ing well fi­nan­cially.

“In spite of the fi­nan­cial re­wards,” Sig­gaoat nar­rated, “I didn’t feel a strong sense of ful­fil­ment help­ing out US and Euro­pean banks who were al­ready rich, suc­cess­ful fi­nan­cial in­sti­tu­tions be­come even richer. There was an in­ner voice telling me that I should be us­ing my skills to help out in my own coun­try,” he said.

This prompted him to move back to the Philip­pines to find op­por­tu­ni­ties that would be ben­e­fi­cial to the coun­try and be per­son­ally ful­fill­ing at the same time. “When the op­por­tu­nity at Fran­corp came along, I im­me­di­ately saw its con­nec­tion to my per­sonal mis­sion. Help­ing small and medium busi­nesses grow through fran­chis­ing, mak­ing en­trepreneur­s out of fran­chisees and em­ploy­ing lots of work­ers through fran­chis­ing was an op­por­tu­nity to con­trib­ute in my own small way to the Philip­pine econ­omy,” he said. Global leader

Fran­corp Philip­pines is the Philip­pine Mas­ter Li­censee of Fran­corp Int’l, the global leader in fran­chise devel­op­ment and con­sult­ing. Fran­corp has helped de­velop over 3,000 fran­chise busi­nesses and as­sisted more than 10,000 com­pa­nies world­wide in their fran­chise ex­pan­sion. To date, Fran­corp Philip­pines has helped over 600 dif­fer­ent com­pa­nies which cre­ated about 20,000 en­trepreneur­fran­chisees and gen­er­ated em­ploy­ment for about 400,000 in­di­vid­u­als.

As part of the tech­nol­ogy trans­fer, Sig­gaoat and other mem­bers of the Fran­corp Philip­pines of­fice had to un­dergo months of train­ing at Fran­corp head­quar­ters in Chicago un­der founder Don Boroian, a well-re­spected pi­o­neer in the field of fran­chis­ing in the US. Boroian was the head of the Fran­corp US team that helped Jol­libee Philip­pines when it was still a startup com­pany in the 80s.

Once the team re­turned to the Philip­pines, it took some time be­fore the com­pany’s ser­vices were ac­cepted by the mar­ket. “Com­pa­nies that ven­tured into fran­chis­ing in the early days be­lieved that de­vel­op­ing a fran­chise was a sim­ple en­deav­our that could be learned by read­ing an ar­ti­cle or copy­ing the fran­chise of­fer­ing of an­other com­pany,” Sig­gaoat shares. “Part of the chal­lenge when Fran­corp Philip­pines be­gan was ed­u­cat­ing the mar­ket that yes, fran­chis­ing is a sim­ple con­cept but pre­par­ing a com­pany for fran­chis­ing re­quires a lot of plan­ning, anal­y­sis, and trans­for­ma­tion. There are many lay­ers in­volved in a fran­chise pro­gram that re­quire ex­per­tise in dif­fer­ent fields – strat­egy, fi­nance, le­gal, op­er­a­tions, mar­ket­ing and sales.” Suc­cess story

When the mar­ket un­der­stood the value of Fran­corp’s ser­vices and saw the suc­cess of its early clients, Philip­pine com­pa­nies in food and re­tail­ing started to get on board.

The Gener­ics Phar­macy (TGP) was one of the busi­ness that ben­e­fited greatly from fran­chis­ing. In the be­gin­ning, the look of the store and its op­er­at­ing sys­tem needed work. How­ever, gener­ics-only phar­ma­cies were only start­ing to en­ter the mar­ket. “Fran­corp took on TGP be­cause it had a strong sell­ing propo­si­tion: its sell­ing prices were a quar­ter to half of their branded medicine coun­ter­parts, yet still main­tained very good prod­uct mar­gins,” Sig­gaoat recalls. When TGP even­tu­ally launched their fran­chise pro­gram a few months af­ter work­ing with Fran­corp, the once small phar­macy grew from one to 2,000 branches in a span of eight years.

An­other early client was Bo’s Cof­fee. When it started work­ing with Fran­corp, Bo’s Cof­fee was a startup Cebu player look­ing to ex­pand out­side of its base. At the time, there were other more es­tab­lished cof­fee brands in Metro Manila and for­eign brands were be­gin­ning to stamp their dom­i­nance in the mar­ket. Bo’s suc­cess­fully en­tered Manila and also ex­panded na­tion­wide. ”To­day, Bo’s Cof­fee is not only the pre­mier home­grown cof­fee brand, it is hold­ing its own against the in­ter­na­tional cof­fee brands that have en­tered the Philip­pines,” Sig­gaoat proudly shares. “Bo’s Cof­fee has also started its ex­pan­sion abroad by open­ing in the Mid­dle East.”

Fran­corp has also helped in­ter­na­tional brands adapt their fran­chise of­fer­ing for the Philip­pines. Over the years, it has helped for­eign brands like Cha­time and Bon­chon cus­tom­ize their fran­chise pro­grams for the lo­cal mar­ket.

Other lo­cal busi­nesses that started out small and have now grown af­ter part­ner­ing with Fran­corp in­clude Potato Corner, Citrus Zone, Far­ron Café, and Turks Shawarma. Even big busi­nesses like Pen­shoppe, Bench, Max’s, Tokyo Tokyo, and Goldilocks grew even big­ger through fran­chis­ing. Some have ven­tured abroad af­ter gain­ing fran­chise ex­pe­ri­ence lo­cally. Fu­ture of fran­chis­ing

Sig­gaoat is op­ti­mistic when it comes to the fran­chis­ing in­dus­try in the Philip­pines. Out­side of the US, the Philip­pines has the high­est num­ber of cer­ti­fied fran­chise ex­ec­u­tives thanks to the pi­o­neer­ing ef­forts of the Philip­pine Fran­chise As­so­ci­a­tion (PFA). Also, be­cause of the high level of fran­chise ex­per­tise in our coun­try, more Philip­pine fran­chise pro­fes­sion­als will be in de­mand abroad.

While there are other meth­ods of grow­ing busi­nesses, fran­chis­ing has be­come the pre­ferred method adopted by many lo­cal busi­nesses. Sig­gaoat said that fran­chis­ing, when done cor­rectly, out­per­forms other meth­ods be­cause of its low cost and built-in in­cen­tive sys­tem for the fran­chisee – the one who owns and man­ages the busi­ness. He sees that more com­pa­nies will adopt fran­chis­ing as its go-to method of ex­pan­sion be­cause of its win-win out­come for both fran­chisor and fran­chisees.

Some suc­cess­ful fran­chised busi­nesses will at­tract larger com­pa­nies who will want to buy them out and in­clude them in their port­fo­lios. This is an ideal exit strat­egy for some en­trepreneur­s who look to big­ger con­glom­er­ates to take their brands to an even higher plane.

“Be­cause their busi­ness is grow­ing on au­topi­lot, thanks to fran­chis­ing, many fran­chisors will also look into of­fer­ing new prod­ucts and ser­vices that may or may not be re­lated to the orig­i­nal one. There’s also a grow­ing de­mand in other coun­tries for Philip­pine prod­ucts and ser­vices — the de­mand comes from both OFWs liv­ing in those coun­tries and from lo­cal res­i­dents.”

Mean­while, Sig­gaoat sees more in­no­va­tive prod­ucts and ser­vices go­ing into fran­chis­ing in the com­ing years, sig­ni­fy­ing a brighter fu­ture in the lo­cal fran­chise in­dus­try. “In the last few years, ed­u­ca­tion fran­chises and med­i­cal ser­vices have started to ex­pand through fran­chis­ing. We will see more fran­chises in these fields as well as in busi­ness ser­vices, tourism, and tech­nol­ogy-based prod­ucts and ser­vices.”

 ??  ?? Fran­corp Philip­pines man­ag­ing di­rec­tor Noel Sig­gaoat: Do­ing good for the great­est num­ber of peo­ple through fran­chis­ing is an ad­vo­cacy we will never tire of pur­su­ing.
Fran­corp Philip­pines man­ag­ing di­rec­tor Noel Sig­gaoat: Do­ing good for the great­est num­ber of peo­ple through fran­chis­ing is an ad­vo­cacy we will never tire of pur­su­ing.

Newspapers in English

Newspapers from Philippines