Franchising tips Philippines: In our recent article titled “How franchising works in the Philippines,” we spoke about the pros and cons of franchising. We dived into the heart of the business to see if this would be a profitable investment/business for an entrepreneur in the Philippines.
In today’s article, we look into this industry in more detail by going through 17 franchising tips in the Philippines.
Franchising Tips Philippines
1. Have Some Backup Cash
Having backup cash is one of the essential franchising tips for the Philippines. As you most likely know, when we embark on a franchising investment, companies up and down the Philippines have a set capital amount. For smaller companies such as food carts, the start of capital is much lower, which can be in the region of 20,000, 50,000, or 100,000 pesos.
With some franchising opportunities, you may need some backup cash. Even if you don’t touch this cash, it is a good idea to have this for an emergency or during low season as this will help you get through rough times. Even the biggest and most well-known brands in the Philippines, experience slow periods.
2. Follow The Rules & Regulations Set By The Franchisor
With franchising, there are indeed rules of regulations you need to follow. This, however, is not as negative or as controlling as it Initially seems. The franchisor sets the rules and regulations to help preserve the brand and the image. This will positively affect your business as they action these regulations to help grow the business chain.
Rules and regulations are often very transparent with franchisors. In other words, if you are interested in this kind of investment, speak to the company in question before signing any contract.
3. Choose The Right Business For You
When we think about franchising in the Philippines, we think about Jollibee, McDonald’s, etc. However, there are different types of franchising, and these are not just related to food.
For instance, there are a few businesses that are laundry-based and have a franchising opportunity for entrepreneurs. Also, there are several small retailers selling clothes as a franchising business. This shows us there is never a shortage of opportunities for you.
I recommend when looking at the business options choose a business that you believe has a future. In other words, will this business still be strong ten years from now? Can you survive the ups and downs of the market? These questions will help shed some light on the bigger question of what business venture you should go into.
4. Accept It May Take Several Years Before You See A Return On Investment
Some of the more prominent franchising corporations in the Philippines have 10 – 20+ million pesos capital. One of the well-known corporations of Jollibee has a start-up capital of 35,000,000 pesos. So, with any franchising opportunity, it may take several years before you can start earning a profit from your original investment.
Doing the maths is the most important thing when looking at how long you expect to reach your ROI. If this is something that you find difficult, there is always an option to outsource this work which will help you better understand the business you are getting into.
5. Investigate Actions You Can Take To Reduce Costs
Like any business, there will be costs and prices for you as an entrepreneur of a franchising business. The trick here is to investigate opportunities in which you can reduce the cost of your business. These can be things such as finding a more affordable supplier, better quality equipment, or anything else that will help you lower your monthly running costs.
Some businesses may struggle slightly with making changes if it affects the regulations, which we spoke about in the second of our franchising tips for the Philippines. But this will only affect some aspects of the business.
When we look at the business, there are many different factors you could investigate. These are things that you may not initially think about at first. For example, changing your utility company for the business could save you thousands of pesos each year. Small changes like this will add up over time and reduce your overall running costs.
6. Think Carefully About The Location
When we started writing this article, franchising tips Philippines, we knew very quickly any franchising business would need to choose its location very carefully. Some of the most apparent reasons for this involve being accessible to your customers and room for your business’s potential expansion.
I would also add looking into external factors such as other similar businesses in the area, your location’s crime levels, and possible strengths and weaknesses your location holds. These parts will better assist you with planning your business location.
7. Learn About The Supplier And The Process Of New Stock
There will be a lot of learning that takes place in any new business. If your franchising business involves stock, in other words selling products… then learning about the suppliers, the process, and the stock will help you grow your business.
Believe it or not, to this day, some people invest in franchising businesses and, after the initial training, do not learn about the process of their business and the tasks their staff perform day in and day out.
This is a big mistake. When we understand the day-by-day tasks set out by the team or the people involved in your business, we are better equipped to make decisions that will benefit the business, reduce your cost, and increase your profit margin. All these things have a positive impact on the business. That is why entrepreneurs must learn about suppliers, the process, and how new stock is utilized.
8. Work And Network With Local Businesses
When you are a new business, you may find upon Investigation that there are similar businesses out there in your location or even the same brand nearby. It is still essential you work and network with local businesses.
As an ideal, perhaps you can negotiate with a local business promotion that will draw more customers from outside into your business or perhaps get involved in a charitable cause or local event. All these things will help you be recognized and Increase the likelihood of success.
9. Be Super Smart With Your Marketing
Marketing is essential for a franchising business in today’s world. The great thing is that the franchising company’s Corporation has already done, and it continues to do a vast amount of marketing. This marketing is something you can benefit from. In more detail, we dived into this topic in our recent article, “How franchising works in the Philippines?”
Nevertheless, there is still an element of marketing you should look at. Marketing can take many forms, and it doesn’t have to be as complicated as it sounds. Even a simple banner or sign showing a promotion that your businesses are currently promoting or even a USP your business has can be classed as marketing.
When it comes to marketing, don’t just think outside the box… Think above the box, think below the box, and think like there is no box at all.
10. Learn About Your Customers
What kind of customers comes to your business? Are they families? Are they students? Or, are they foreigners? Learning about your customers is a vital franchising tip in the Philippines as they are the source of funds.
Once you have discovered and understood your customers, you can then start to look at their behaviors. Do they start to come into your business at a particular time? Is there a product or service that they will pay extra for? Is there something you can provide which will bring real value to them? Only when we know about our customers can we tailor our business to their needs.
11. Ask For Statistics And Data From The Franchisor
No matter the business’s size, there should always be an element of statistics regarding this franchising venture’s business operations. Most franchising companies are more than willing to share this information with you as a new business owner.
Why is this important? This is important because having the stats and data before you even start will give you a significant indication of this business’s strengths and weaknesses. As a business owner, you will then decide what direction you can take to improve the business’s weaknesses and continue the business strengths.
Think about it like this. If you have ever used Facebook advertisement for a business, you always test a campaign, maybe 500 pesos or 1000 pesos initially. This is to see the audience’s engagement and see how people react after testing several advertisement posts; you can then look and decide which is best for you. You must test the market this way with Facebook because at the start, you have no data and no statistics.
However, when you have the franchising company’s statistics, it is like receiving a load of free information without paying to ‘test the market.’
12. Have A Readable But Robust Business Plan
Most franchising companies will have a business model that Is set out for entrepreneurs. This plan is a helpful and valuable piece of information. But you should always have your business plan. This is because you can tailor this to your customers’ needs and allow you to expand and investigate other areas of the business that you may feel needs your attention.
If you are looking for a business plan, either a basic or precisely a franchising business plan, you can download our free business plan, which you can find on our business plan page.
13. Look At Areas To Expand Your Profit
There are many ways that businesses can expand their profits. This is mainly through providing something unique or providing high value. For instance, a friend of mine who owns a small shop often sells chocolate gift baskets.
These gift baskets are great for Christmas and Valentine’s day. He uses a big basket and some ribbons and makes the basket look beautiful. He is selling this with a 68% profit on each basket. He has been designing these gift baskets for the last six years and is always entirely sold out within the first 2 to 3 days.
When we look at the business, is there something we can do to provide more value to the customers? or are we able to give the customers something unique that they cannot get anywhere else? I mention this because if you can provide your customers with something like this, you will have the opportunity to earn more money, increasing your overall profit.
If these two options do not apply to your business model, then look at other gaps in the market where you can expand your business.
14. Don’t Expect Too Much Support From Franchisors
Our next part on our list of franchising tips in the Philippines is supporting. Franchising companies are beneficial, especially in the beginning (When they want your money 😉… Joking.) Most franchising companies have fantastic support, which can be called upon during difficult times. However, sadly not all franchising companies are the same. Some offer very little support, and some take a very long time to respond to your queries.
15. Focus On Building A Dependable Team
As the old saying goes, you are as strong as your weakest link. Focusing on building a dependable team is one of the essential franchising tips in the Philippines and will help your business’s foundations. This is especially true if your business will be running 24/7.
Your 1st question might be, how do you find a dependable team or dependable co-workers? In most situations, you cannot find out if they are dependable or not until you get to how they work, but, in my experience, running businesses, I would suggest a 2-way street of respect and honesty for starters. If you are a manager who invests back into your team, including training and support, they will become sharper and become more reliable.
With any business, the first few staff members you take on are your most important, especially if they will be training other team members. as an entrepreneur and the owner of your business, your team must always know that you are available and approachable.
16. Accept Any Training Available To You
During the early days (and sometimes annually), franchising companies in the Philippines will offer you franchisee training. Depending on the franchising company, not all this training is mandatory but, it is strongly recommended. You may also be invited to special events or stakeholders’ meetings which may benefit you and your business and help you build connections with similar people in your industry.
17. Have An Exit Plan
Now we have reached the end of our franchising tips for the Philippines. This brings us to tip #17, which is to have an exit plan. Franchising businesses are a great opportunity and income for many entrepreneurs across the country. It’s important to acknowledge not every franchising business turns out the way the entrepreneur expected it to.
During the lifetime of the business, there may be more work that is required of you. This work might be extremely stressful at times. You might be hit with the full force of life. These reasons are why it’s essential to have an exit plan. It’s essential to speak to your franchising company before you began to invest, as it’s vital to know what your options are open to you if the worst were to happen.
Franchising Tips Philippines: Summary
As I mentioned in previous articles about franchising in the Philippines… Franchising is indeed one of the hottest topics, with good reason. It can be a great business, and it has the potential to make an entrepreneur extremely rich.
What I have noticed the most when looking into franchising in the Philippines is that succeeding businesses can adapt to changes, whether internally or externally, and businesses provide the customers with real value in one way or another.
When we look at franchising tips in the Philippines, there are hundreds of different tips and tricks that we could share, but these 17 are the essential tips you should know if you are thinking of starting a franchising business.Franchising tips Philippines.
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