Franchising was not known decades ago in the Philippines although we have seen lots of franchised businesses and the most well known as far as I know are Jollibee, Mc Donalds, KFC and Dunkin Donuts. In fact it was not until 1965 when two fast food chains from the U.S., A&W Restaurants and Kentucky Fried Chicken set up their first outlet in Manila. Nonetheless franchising business was not a hit and it took 13 years later before a local restaurant Pancake House ventured into franchising.
But then again it was not until 1990 that franchising started to pick up momentum and at a faster rate the next several years. In 2006 the number of franchisers in the country was 20 times more than a decade ago. Franchising can be defined in one word: “SYSTEM”. A franchiser develops system of his business and the franchisee must adopt and follow the pattern. The franchiser then assist the franchisee such as selection of business location, training of personnel, advertising and supply of products and materials. Then the franchisee will pay a franchise fee and royalties which will based on the actual sales volume.
So with the said “SYSTEM” the franchisee need not experiment because the franchiser have already overcome it and the only thing to do is to adhere to the guidelines and procedures..
Posted by Manuel
Manuel Montala was an online entrepreneur who enjoys blogging about entrepreneurship and gathering information for his blog to help budding entrepreneurs. You can also reach him on twitter: http://twitter.com/mmontala
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