At the Be Wise, Franchise Expo, which kicked off on July 23 at the Globe Tower i Bonifacio Global City, Taguig, guests eagerly gathered to learn about the basics of franchising and starting their own business. Successful entrepreneurs shared their own experiences about franchising in a lively discussion that offered encouraging insights.
The franchising expo was led by members of the Association of the Filipino Franchisers, Inc. (AFFI), one of the country’s trusted business organizations that aim to promote responsible franchise business ownership for micro-, small, and medium enterprises.
The discussion opened with the biggest question on everyone’s minds that day: “What do I do if I want to start a franchising business?” AFFI President Jorge Wieneke of Tokyo Tempura, who started franchising in the 1990s, replied that franchising a business entails a lot of thought, research, and preparation. One of the first steps, Victor Fernando of Big Apple Express points out, is to assess if you’re truly ready to commit.
Starting a business — not just a franchising business — requires having not just the financial means to fund it, but also the proper mental state and commitment in terms of time and effort in overseeing its growth. You have to know your reasons for starting a business, points out Wieneke, as this will lay a solid foundation for you, especially later on when times get tough.
Ask yourself why you want to start a business: Is it to supplement your current income? Or do you want to become your own boss? Once you are able to honestly answer this question, only then are you ready to take the next step.
If you’re financially capable of funding a franchise business, the second most crucial step is to decide on what type of franchise to get. There are number of options to choose from, and it may get confusing especially for a newbie.
There are two ways to help you decide on the kind of franchise business you can get. First, you can choose a franchise business based on the product or service you want to offer the market. Another way is finding a location with high foot traffic and choosing a product or service suitable for that specific area.
EC Gas’ JC Martinez shares how observing the activities of a certain area provides an insight as to which franchise business would be best for a particular area. For example, a location near an MRT station, where people are passing through at a fast pace, would work best with a food kiosk offering bites that can be eaten while on the move.
If you’re set on the kind of product or service you want to franchise, the next step is finding the right location for it. The rule of thumb is that a good location is one where there is a lot of foot traffic. However, Michelle Velasquez of Maxi Mango points out that malls are not always a top priority. “It depends on where in the mall you’re located,” she explains further. “The specific location within the mall is important.”
A good way to determine if a location has good foot traffic is to actually take the time to observe how busy the spot can be at various times of the day. Wieneke shares a tip: Ask the other businesses in the area about how they are doing, how busy it gets throughout the day, and which days of the week are the busiest.
Then take it even a step further — check out your competition in the area. And while you’re at it, research on the rental rates in your chosen location as well to give you a good idea whether or not you can afford it.
“Location is a challenge,” says Wieneke, “[but for] a kiosk and cart business, it’s easier, because you can always relocate it.” He adds, “If the franchise owner is good, they will help you find the right location, too.”
Your franchising strategy for success involves doing your research about the business itself. “See first if the brand [you want to franchise] is strong,” advises Wieneke. “Pinag-uusapan ba siya?”
One way to do this is to visit various branches of the franchise you have your eye on. “Check if may pila ba,” suggests Wieneke. Also, says Martinez, “Investigate if it’s up to the standards, if the quality is good.”
Fernando emphasizes the importance of doing your homework. “Ask around about the stability and success of the franchise,” he says. “Look at the concepts that you want franchise. You have to study the business model yourself.”
Wieneke strongly recommends researching the background of the franchisor, such as if they have been operating the business for a long time, among others. A sign of a good franchisor is if they are hands-on, adds Martinez. “Find someone who knows what they are doing, and know their product well,” says Velaquez.
By doing your own legwork and research on what the particular franchise business requires, you’re able to analyze and see for yourself if the franchisor really knows the business and is trustworthy. At the same time, you are able to assess the quality and standards that you have to live up to once you become a franchisee.
As a long-time franchise business owner, Wieneke wants to remove the belief that “franchising is a ‘safe’ investment” that yields fast return on your investment. It’s not, he warns, which is why it is important to learn from seasoned entrepreneurs and reputable franchise owners who have the experience and know-how when it comes to operating these kinds of businesses. AFFI also helps new and established entrepreneurs by protecting them from fly-by-night franchise businesses.
Franchising a business requires a deep commitment from the franchisee to operate and manage the business within the standards set by the franchisor. As Fernando succinctly puts it, “Manage your expectations.” This includes allotting sufficient time to manage the business closely, finding and training the right people to help you run the business efficiently, and maintaining (or surpassing) the quality of service or product, even when there is no assurance yet of ROI.
“At first, you’ll be excited,” says Wieneke, but sometimes enthusiasm wanes, especially when faced by the challenges that come with running a business. You can’t do it all by yourself, declares Velasquez. You also have to learn to delegate, as it can be difficult and tiring if you don’t have others to help you. “You have to train and trust other people,” she says. “And lead by example.”
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