Upbeat domestic market to lift franchising sector

CEBU, Philippines — The Philippine franchising industry will continue to grow steadily driven by continued expansion of the domestic market, a top industry official said.

In an interview at the sidelines of the 43rd Philippine Business Conference and Expo in Manila, Philippine Franchise Association (PFA) chairman emeritus Samie Lim said there has been a consistent interest among would-be entrepreneurs to invest into franchising. 

"It has been growing double-digit yearly," he said.

Lim said the industry is seen growing at least 20-30 percent this year and next.

In 2016, the industry accelerated 20 percent from P16 billion in total sales registered in 2015.

Lim, who is director for franchising at the Philippine Chamber of Commerce and Industry, said that franchising is a vital economic contributor in the Philippines.

He noted the industry accounts for the employment of around 1.5 million people in the country. 

Currently he said there are now almost 2,000 franchise concepts in the country and over 150,000 franchisees. 

He previously said that in more advanced and developed countries, franchising is about 50 percent of total retail sales.

In the Philippines, franchising only accounts for about 25 percent of retail sales so there is still room for growth.

With some 1.2 million jobs created by the industry currently, the sector is eyeing an additional employment of 1.5 million in the next two years.

He said more and more people are interested to get into franchising as they want to become their own boss.

Franchising also allows budding entrepreneurs to start a business without starting from scratch as it provides a tried and tested business model by the franchise company.

In franchising which targets the micro, small and medium enterprises (MSMEs), one can start a franchise for as low as P100,000 to a high of P20 million.

Lim had also said that franchising has so much potential to become a top dollar earner because of its growth potential. 

The PFA had projected it is bullish in terms of industry growth and prospects under the current administration with its strong push for the MSME development. (FREEMAN)