Franchising in Cebu City, The Queen City of the Philippines

Julies Bakeshop, a successful franchise based in Cebu

In spite of the global economic recession, the franchising industry in Cebu, the second biggest city in the Philippines, continues to grow. This is evident in its average growth of 20 percent, year on year, for the last 15 years.

Not a bad figure at all, if you ask me. International and local franchises dot the business landscape of the city attesting to the industry’s strength. Mc Donald’s, Shakey’s, Starbucks, Dunkin Donuts and the like have been available to the locals for a decade or so. Manila based Jollibee, Goldilocks and Chow king have also invaded the city’s taste buds. And lately, local Cebu brands have expanded into franchising as well. The Cebu based Julie’s Bakeshop has expanded into hundreds of bakeries located all over the Philippines since it ventured into franchising a couple of years ago.

It seems like the new generation of businessmen in Cebu City are more aware of the benefits and business opportunity offered by franchising packages. It has become a popular way of fast tracking a growth of a business in contrast to the traditional concept. Although admittedly, there are still a number of entrepreneurs who still do not recognize the advantages brought about by opening a business into franchising, or starting a business through franchise.

Franchising is also becoming a popular investment for Cebuano’s who work overseas. Infused with capital but inexperienced in business, they find the franchising model advantageous. It sure is a safer way to set up their family in business back home in the Philippines.

Last March, over a hundred businesses joined a franchising exhibit in Cebu City. A wide range of businesses joined the show that include bakeshops, banks, beauty supplies, business services, consumer goods, drugstores, restaurants, salons and spa, fast food, health and wellness, oil companies, publishing house, water stores/water treatment, school, and health related franchises. The franchise expo not only showcased businesses that are open for franchise but also provided expert advise and the know-how to enter into franchise business through a seminar.

In Cebu City and perhaps in general, food franchises have the highest volume in number of franchise outlets followed by beauty and wellness sector. Water refilling sector is also a popular industry for franchising here.

The good news for those who are interested to go into franchising is that the pricing of franchise offers in Cebu City have remained relatively stagnant in the last few years. This is a testament to the time’s financial sensitivity and the stiff competition between franchising companies.

Nowadays, a food cart type of business may cost P300, 000 (USD7,000) while salon franchises may require P1.2 million pesos (USD28,000). Restaurant franchises, on the other hand, range from P2 million (USD46,000) to P12 million packages USD277,000. It is indeed time to take advantage of franchising in the Philippines’ queen city of the South.

About the Author

Maria Victoria Beltran is one of Cebu’s more interesting personalities, she runs two hotels in Cebu, both called Kukuk’s Nest. She is a well-known artist who paints, sculpts, writes and organises artistic events in her city. Regular poetry readings are held in Kukuk’s Nest. She has written the script for a successful movie and is currently working on two more. As you can tell from this article, she also has a keen interest in business.

More about Maria and the Kukuk’s Nest

Franchisors are Doing Well in China

I have just returned from a trip to Beijing and while I wasn’t there on franchising business, you can be sure I kept my eyes open all the time to see how many franchises I could recognise.

Firstly, I have to say that Beijing was a big surprise. Any preconceived notions I may have had about it being a third world city vanished as soon as I entered the airport, walked easily through the Customs checkpoint and was soon whisking along a highway system that was as good as anything I’ve seen in the West.

Franchises Beijing

Franchises in Beijing

Beijing is a clean, organised, efficient, bustling modern city. Most of the cars, buses and taxis are late models. There are traffic jams, though not really any worse than any other modern city. Certainly the jams are not like those you will experience in Jakarta, Bangkok, or Mexico city for example.

Here is a list of the franchises I spotted as I was driving around: KFC, 7-Eleven, Auntie Anne’s Pizza Hut, Sarpino’s, O’Briens, Kenny Rogers Roasters and Subway and Cold Stone Creamery. I’m sure there are many I missed, and I don’t know how many international franchises have set up shop in beijing, or the rest of China.

For franchisors who are sitting on the fence, wondering if they should test the market, I would suggest that it is probably already the single biggest market in the world and the disposable income is much greater than you probably realise. Couple that with an eagerness to embrace successful trends from overseas, a smart and hard-working workforce with a “can do” attitude and you have a potential gold mine waiting to be discovered.

Many of us have heard of the difficulties of doing business in China, but it is definitely getting easier as Chinese society opens up.

Pet Corner International

Pet Corner International

Pet Corner International's Business Opportunity

Pet Corner International has an interesting business opportunity. I like businesses that are inexpensive to get into and yet can be scaled-up enough to provide a good living for the owner.

Health supplements for people is big business but I have not really seen many health supplements for pets yet.

You could argue that pets probably need them more than people as most pet food is heavily processed and not many pets get to eat a lot of fresh food.

Pet Corner has a range of spray-on supplements, obviously a lot easier to administer than pills or capsules.

Whilst I don’t know all the details, a Pet Corner business owner is responsible for placing attractive display packs of their products in high-traffic retail stores.

Over the next three years they plan to penetrate 9,000 – 10,000 retail stores using 170 to 200 distributors. So that means they are providing 170 to 200 business opportunities.

I would say that it is definitely a concept with a lot of potential. Far more appealing than the slightly similar idea of running a vending machine business. In this case no one is asking you to buy an expensive machine with its attendant maintenance problems. Instead you’ll be building relationships with retailers in your area and re-stocking their shelves with what will hopefully be a hot-selling product.

To, as PCI says, reach “critical mass” they are launching an extensive television campaign on November 29 which will run through 2011. It sounds like a good opportunity to get on the ground floor of.

Pet Corner International Supplements

Low Cost Franchise – Seen at FLA

3D caricatures

3D caricatures Franchise Opportunity

Looking for a franchise or business opportunity which is really inexpensive?

I think most of us would enjoy being given a 3D mini-caricature of ourself. As a gift they are both light-hearted and fun and say something about the sense of humor of both the giver and recipient.

If you want to buy one you, just supply some photographs taken at different angles of the face, pay $100-ish, wait maybe 2 weeks and you will have a very unique gift.

As a business opportunity it is being marketed as an ideal business to operate from a push cart. It requires a very small investment of less than $500 and should start bringing in returns within about a week.

There is no technology to buy, they are all hand made of polymer clay, so no two figurines will be the same.

Both Area Franchises and Master franchises are being offered, if you think this might be a fun business you’d like to get into, take a look at iGongzai’s website.

Alternatively, you could make contact with the suppliers, make your own arrangements with them and start your own franchise business.

Franchising & Licensing Asia 2010.

Today was the first day of the Franchising & Licensing Asia 2010 exhibition. It got off to a good start, I think. Certainly it was busier and more up-beat than last year at which time we were all weighed down by the gloomy economic outlook. Although economies in Europe and the US are still not out of the woods, China, South East Asia and Australia are doing remarkably well, and those who are perhaps a bit more astute and a bit more cashed-up than  the rest of us are looking around for ground floor opportunities.

It is an interesting mix of the big players like Quiznos, Subway and 7-eleven, but there were some real surprises from some Singapore start-ups.

AdsraGold is a microbrewery franchise. You can start up your own microbrewery with less than SGD100,000 and 96 square feet of space. The concept makes an interesting add-on to an existing pub or restaurant. Freshly brewed artisan beers with imaginative names and complex interesting tastes are proven crowd-pullers, and with the technology supplied by Adstragold, brewing beer is probably a less complex operation than importing and storing and re-ordering beers from around the world.

Another Singapore start-up which really impressed me is called inQbox. On the face of it they appear to be selling 18″ cubes in which merchandisers display their wares. It is in fact almost as simple as that.

inQbox Franchise

inQbox Franchise

As an inQbox franchisee you line your store with the the empty boxes I mentioned and rent them out individually for a monthly fee (the figure of $200 was mentioned). Who is going to rent the boxes? Why minipreneurs of course. People – anyone- who has something to sell.

Existing pilot stores are in extremely high traffic areas, such as MRT (train) stations. I haven’t seen any yet, but I can easily imagine the zany and quirky stuff that is going to be on display. The trick must surely be to manage the overall look and feel of each store, to keep it bright and interesting and fun.

I spoke briefly to Danas Njoto the founder and (I would say), the locomotive driving the concept forward. I don’t think I have ever met anyone so passionate about an idea. She talked of the advantages of no inventory, of their point of sale system of their training and support. I couldn’t help but listen intently but another part of my brain was saying “hmm… let’s see… say a store had 200 boxes and each one is rented out for $200 dollars a month, that comes to….”

Another good thing about the idea is it really gives budding craftsmen, artisans and retailers a chance to display their wares in high traffic, high rental retail spaces for an affordable fee.

This concept has the hallmarks of a winner, I think, and I certainly wish Danas luck with it.

What Your Franchisee Will Go Through (and What To Expect as a Franchisee)

 (By John DeHart, Co founder, Nurse Next Door)

I’m a big culture guy. It is my passion. I spend a lot of time in our own company and franchise system, focused on it. To me, you have to have a great culture INSIDE your company in order to build a great brand OUTSIDE of your company. The best and most enduring brands in the world have proven this.

Building a great culture in a franchise system is a unique challenge: at the core, it is a business relationship, which means there is inherent conflict built into the relationship.  And that can make it challenging when trying to build a world class culture!  So when we started to franchise Nurse Next Door (almost 4 years ago), we started to study the stages of the relationship that a franchisee goes through when they buy and run a franchise.  We figured that if we could start to understand this dynamic and evolving relationship, it would help us build a better culture.  So we turned to  Greg Nathan’s” 6 Stages of a Franchise Relationship.”

Greg Nathan’s “6 stages” model is what every franchisee, no matter what system it is, will go through during their business ownership. Outside of franchising, this model is often referred to as the “entrepreneurial roller coaster.” Here are the 6 stages:

The Glee Stage

When your franchisees are awarded the franchise, and come to training, they are in the Glee stage.  Everything is going to be “gleeful” and they love their franchisor, because you are really smart!

 The Fee Stage

Once their business is up and running, and they aren’t making much money yet, the franchisee starts to look at the royalty they are paying. They say “Gee, if I didn’t have to pay this royalty I would make money.” This is the Fee stage. 

The Me Stage

Once your franchisee has had some time in your system and  they start to build their confidence, success starts to come.  At this point they may attribute their success mainly (100%?!)  to their own hard work. At this stage they start to wonder why they have a franchisor, and believe that  they could have gotten to where they are, and succeed on their own ever thereafter, without the franchisor.

The Free Stage

Confidence (or frustration) has grown to the point where  it might be time to leave if significant changes don’t occur. A franchisee may start to feel resentful at having to follow the franchisor system, and may start to gain some freedom by doing it “their way.”This is the make or break stage and usually requires a good, (and serious) face to face conversation between the franchisor and franchisee to discuss the mutual frustration both parties are experiencing.

The See Stage

If the conversation in the FREE stage can happen, and if acceptance and letting go of the past by both parties can occur, then the “See” stage can happen. This is where both parties SEE the benefits of having each other, and realize everything isn’t always  the others fault! This is a good place to get too.

 The We Stage

From the See stage there is a natural progression to the We stage – a move from independent to interdependent thinking. At this point the franchisee is prepared to put his or her ego aside and recognizes that success and satisfaction generally come more easily from working with, rather than against, their franchisor.

 At Nurse Next Door, we not only teach our business development coaches on how to handle these stages, we teach our franchisees on what to expect at each stage.  (They are always like “really? I’m going to go through that?”)   Yup.

By doing this, it has helped us build a strong culture because we understand how to coach and guide a partner through each of the stages.

 Nurse Next Door, and is a regular blogger on building a world class culture.

Fast Food Franchises and Our Health

Healthy Food Franchises

Healthy Food Franchises

I think it is true to say that in this blog I have taken a few pot shots at the franchising industry over the alarming rates of obesity in developed economies. I’m sure that fast food franchises should accept some of the blame, but at the same time I wonder if it is really fair? After all their menus have been finely tuned over the years to provide customers the kind of meals they feel they want. Unfortunately, just as kids are happy to eat candy all day long, what adults seem to crave is high protein calorie-packed food, preferably deep fried.

The franchising business model may well help with the solution to the problem which it helped to create as more healthy food franchises are being created every year. My favorites are the quick service salad restaurants like Saladworks and the smoothie bars like Jamba Juice and Froots which also sell salads and wraps as a healthy burger alternative.

Even the more mainstream franchises are embracing the idea of providing a healthy diet, or at least some healthy alternatives on their menus. Subway, which now has more outlets than McDonalds does not serve any fried foods and its “Subway diet” has received a lot of publicity as well as some impressive weight-loss results. McDonalds is introducing their range of smoothies, which may or may not be considered a health drink and Kentucky Fried Chicken has introduced grilled chicken to replace, or at least offer an alternative, to its fried chicken.

There are other notable and innovative franchises with a healthy lifestyle as their main focus. groOrganice sets up organic vegetable gardens in backyards, senior health care facilities, schools and parks. Then of course there are many fitness franchises like Anytime Fitness.

Whether or not the power of franchising will rescue us from our fast food follies remains to be seen, but I am hopeful.

Internet Franchises, Where are They?

I often think that if ever there was a perfect franchise business concept, it would be the marketing, building and maintaining of websites.

The idea is this: Almost every business, big or small, needs a website and these websites need upgrading fairly regularly as Content Management Software evolves, as content needs to be changed and as visual fashions come and go.

The marketing of websites is arguably best handled by a person who can sit down with the client and discuss his needs, explain what is possible, and who will always be able to respond in person to answer questions and concerns. This same marketing person should not then be rushing back to his home-office and building the website,  he is better off looking for new clients and servicing existing ones while others look after the technical details.

Now, while it is possible, and in fact very common for our marketing guy to hand over the work to freelancers, this approach has some fairly significant limitations. The first one is he wont have a recognizable brand and it will take quite some time build one up. The second is that managing freelance web designers is no easy task and can easily take up far more time than it really should.

So what we need is a solid reliable company with a proper business structure which can build websites to any requirements, using the latest technology if required, reliably, within budget and on schedule. And we need this company to be accessible and to offer top-notch support. It would be a bonus if they offered their franchisees a sales-training program and branded printed sales material.

Where are they? I can only think of WSI. They’ve been around for many years, at least as long as Every Franchise, so that is more than eleven years – In fact they were one of our first advertisers. I think they are pretty solid and reliable and have a good reputation. But where is their competition?

AIS Media "HQ"

AIS Media "HQ"

While looking around I came upon a post on Blue Mau Mau about a company called AIS Media. So I visited their website and, indeed, they do seems to be positioning themselves as direct competitors to WSI. A picture of their “Headquarters” is shown here. Actually they have some office space in there, so it might be a little misleading to call the building their headquarters. Here is what was said about them in Blue Mau Mua’s forum.

Big promises, high cost, low return. Leads promised, but no one finds them in search for website design. Good marketers – for themselves. Partner websites not optimized well – and hard to update. They all have the same text, thus get no search respect. Too much anonymity. They don’t want partners to talk to each other. Lots of selling training, little technical.

A quick check shows that their website has an Alexa ranking of over 700,000 (translation – they get zero traffic). If you want to know more about why you should avoid them just visit the forum.

So it still seems to me there is at least a partial vacuum in this market although the “partner” who wrote the post I mentioned above goes some way to explain how you can set up your own website building company. He suggests there is, as I said at the beginning of this post, a strong need for these services in most communities. Of course here is the best place to look for computer franchises.

I’m jealous of BMM’s forum. I’m going to get one too. Watch this space.

Franchising & Licensing Asia 2010 Exhibition

Marina Bay Sands Casino

Marina Bay Sands Casino

In about a month the Franchising & Licensing Asia 2010 will open in Marina Bay Sands (the world’s second most expensive casino).
I’m excited to be attending and this year it promises to be an exceptional exhibition. Economies in Australia, S.E. Asia and Far East Asia are robust and expanding quickly. With still a lot of uncertainty in the US and European economies, many franchisors are putting extra effort into selling master franchises, or even single-unit franchises in this region.

And, speaking generally, franchises transplant well. The populations in Asia are young, relatively affluent, well educated, and eager to embrace new trends.

It’s a happy situation, for businesses which want to set-up here can find a lot of management expertise. At the same time they can be reasonably certain that, if the business was successful in the home country, the chances of finding success in Asia or Australia are also very high.

I’ll be prowling around, trying to identify hot franchise opportunities and spot emerging trends.

It should be fun.

Franchises Discover Cure for Anorexia

Fast Food and Obesity

Fast Food and Obesity

Yes, it’s true. The franchising industry has discovered a cure for anorexia. It’s called fast food.

Like many highly acclaimed breakthroughs,  this one comes with an array of side effects, the main one being OBESITY.

Zagat has just published their survey of full service and fast food franchises and, like many surveys this one is quite interesting.

The 6,518 respondents ate at a franchise outlet an average of 10.7 times a month and rated their experience: Read More…