Franchising is one of the business options that an overseas Filipinos are investing in with their hard-earned money. However, it is not easy to just venture into this business without enough information on how you can profit from it.
In an exclusive interview with The Filipino Times, Dr. Alan Escalona, chairman of the Philippine Franchising Association, and president and CEO of Fruit Magic, shared a few tips on how to be a successful franchisee.
1 Check the brand’s credibility
First things first, you have to be sure of the brand that you want to franchise. Escalona said that there are still some “fly by night” businesses that interested franchisees should be aware of.
He stressed that even the Department of Trade and Industry (DTI) doesn’t have the police power to regulate franchisers. That is why it is very important that an interested franchisee rely on a strong association platform.
Escolona said that it is important to check if a certain brand is part of an association platform, such as the Philippine Franchising Association, because these associations know the right way of doing business.
Of course, disputes in business will never cease but on a proper context, it can be avoided especially if you follow the right guidelines.
2 Attention to details
An interested franchisee must have a keen attention to detail. Do not just start signing contracts and paying with you money because it is utterly important that you look at the brand closely.
“Talk to the company, the CEO, the owner, the franchise manager, check the branches and how they are doing,” Escalona said.
Make sure that you are a hundred percent certain that your money will not fall into some scam because you have chosen a trusted and legit brand.
Escalona also said that due diligence will not stop at the beginning of franchising. It is a continuous process even until you have already established your business.
“Franchisors only give 50% of the formula to success, the rest will be up to the franchisee’s efforts,” Escalona, a franchisor himself who has over 100 franchises, said.
He added that franchisees should be aware of everything that is happening in his/her business.
“Ninanakawan ka ba ng mga staff mo? Hindi na namin mababantayan ‘yon, that’s your lookout. Are you ordering on time? Are you following the systems that were given to you? May iba pang factors eh, and those are all on the franchisee’s side,” he said.
3 Connect with other branch owners
In line with the preceding item, getting in touch with someone who already has knowledge about the business can also help you.
“Let’s say you want Fruit Magic, then go to a Fruit Magic franchisee, talk to them and tell them, ‘I am interested in getting a franchise from Fruit Magic’. You just have to go to their branches and talk to the people there. They can be very helpful,” Escalona said.
4 Know the different factors
There is a false notion that once you start franchising, it will automatically generate a lot of income. However, there are several other factors that will determine if a franchise business will succeed or flop.
Don’t fall into the trap that just because a brand is successful, it will also automatically bring you success.
Escalona said that management, location, and right market are just three of many factors that can affect a business.
He also said that some franchisers will only show you the rosy picture and not tell the bad sides, but a good franchiser will open your mind to every possibility in franchising whether it may be positive or negative.
5 Have passion
Escalona said that this is one of the most important things that a franchisee must consider – it is not just about the trend, but should be related to something that you like as well.
Let’s say you are highly interested in beauty and cosmetics but decided to open a fast food franchise instead because you think that is the more successful one – wrong! Choose the one that will make you happy that you are running a business. If you like beauty and cosmetics, then franchise a hair styling salon.
Remember that there are many franchising brands and that you have the right to choose.
