Pinoy firms told: Expand ASEAN presence through franchise system

CEBU, Philippines — The Department of Trade Industry (DTI) is calling on Filipino companies to start establishing a franchise system as the ASEAN market is becoming an interesting landscape for expansion.

According to DTI trade service officer of Foreign Trade Service Corps Eric Elnar, Filipino companies can use the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) to penetrate the ASEAN region.

Franchise owners are encouraged to exploit this access and expand in other Southeast Asian countries, as more Filipino brands are getting access to a larger share of the population of the region.

ASEAN group include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

“Under the ASEAN, we have an ASEAN free trade agreement so basically, it just says that franchising is one of the sectors that is being promoted in the ASEAN agreement. So it’s a good idea for franchise owners in the Philippines to look at expanding first in other ASEAN countries before you expand elsewhere” Elnar said in a statement.

Elnar pointed out that franchising is considered under distribution services, same with retail and wholesale services, stipulated in the packages of services commitments in ASEAN Framework Agreement on Services (AFAS).

To expand their presence in the ASEAN region, he said Philippine players need to consider Halal certification.

Elnar cited Muslim-dominated countries Malaysia and Indonesia, where they should be “conscious” about Halal requirements.

Meanwhile, franchising consultant Rudolf Kotik said that most countries in the ASEAN region are yet to appreciate the power of franchising, as the fastest and easiest way to expand market reach.

In the ASEAN bloc, the Philippines is the leading country in terms of franchising maturity.

In this way, Philippine companies, which are ahead of the franchising curb may be able to educate these countries in adapting franchising platforms.