The Philippines is known for being a hub of entrepreneurship, and starting a franchise business provides an opportunity as an option for many aspiring young entrepreneurs. The country offers a variety of franchise business opportunities that cater to a wide range of interest, market, and budget. Whether it’s a food cart/kiosk, convenience store, retail, or restaurant business, there are a lot of franchise business opportunities in the Philippines for you to choose from. With a lot of businesses open to franchising, it can be quite overwhelming to pick and choose what business to franchise. In this article, we will discuss the types of business that you can franchise, advantages and disadvantages, and how to franchise a business in the Philippines.
What is a Franchise Business or Franchising
Business franchising is a business model in which a company (the franchisor) grants the right to use its brand, products, services to a person or an entity (the franchisee) in exchange for royalty or fee.
Two types of Franchise in the Philippines
- Business Format Franchising
Business format franchising is a type of franchise business that grants the franchisee the rights to use their trademarks, operating system, and procedures in exchange for payment. Just like mentioned above, the franchisor provides support in the aspects of business, marketing, training, and any hands-on business management, which makes your focus settled in selling the products or services of the business.
- Product Distribution Franchising
From the title itself, product distribution franchising is where a company or the franchisor distributes and suppliers products to authorized sellers who sell the products to end customers or other businesses. In this type of business franchising model, the franchisor is primarily responsible for product distribution and supply chain management rather than the business operations side. For example, you’ve probably seen tech stores around malls with an “Apple Authorized Reseller” on their signages, which means they can sell Apple products to customers.
Advantages of Franchising a Business in the Philippines
- You don’t have to start from scratch
One of the biggest advantages of starting a franchising business in the Philippines is most franchisors already have existing business procedures and operations. All you need to do is to act in accordance with the business guidelines that the franchisors provide and you’re all set. With a franchise business, you would worry less about figuring out how to operate and you will be able to focus more on driving sales to your franchise business.
- Support and training
For most franchise businesses, the franchisor provides comprehensive training and ongoing support to the franchisee as part of the franchise agreement. The training is designed to teach you and your staff on how the franchise works, product management, and other included services in the franchise agreement.
- Marketing and advertising
Most businesses that open their business to franchising have an established brand and customer base. They are most likely to have an existing marketing and advertising strategy, in which you don’t have much to worry about the marketing part of the business or you can follow the full-proof blueprint on how they market their products to their customers.
- Reduced Risks
Starting a business with an existing and established customer base and brand makes it easier for you to mitigate the risk of going bankrupt. With an already proven business model, marketing and advertising, and branding, it would be much easier to produce sales compared to when starting your own business from scratch.
Disadvantages of Franchising a Business in the Philippines
- High upfront costs
Franchising a business can be quite expensive but you can also find businesses with a cheap startup franchising price. You would need to pay initial investments to have the grant of right of use of the business you want to franchise. Another thing to consider is the lot or location where you would be positioning your business, it would be less of a problem if you own the property or lot but if you would be renting it, you would produce less profit.
- Limited Flexibility
Franchisees would have limited control or no flexibility to operate the business because you would need to follow the guidelines and regulations within the franchisor’s system. This can be an advantage to entrepreneurs who want to do the decision making in their business, but if you don’t mind following a full-proof business plan, then this wouldn’t be a problem for you.
- Royalty and Ongoing Fees
Since you are using the trademark and branding of a franchised business, you would need to pay for fees such as royalties, marketing fees, or other chargers included in the franchised agreement, which can slow down the profitability of your business.
Things to Consider Before Starting a Franchise Business in the Philippines
- Location
Before owning a franchise, you would need to set up a location to where you’re going to do your business. Food carts or kiosks are much easier to place in a mall, on the street, or a place with a lot of bypassers. But if you decide to franchise a business with a storefront, a fast food chain, or a restaurant, you would need to own or rent a place where you can do business.
- Determine your Budget
Budget would be the biggest factor in determining what type of franchise you can choose. There are businesses with a minimum initial investment of P150,000 to P300,000 like Master Siomai, on the other hand are also businesses that would require P1 Million to P15 Million to start such as Jollibee, McDonald’s, 7-Eleven, and many more.
- Assess the Market
Assessing the market would be an important step in determining which franchise business you would go for. Does the brand get enough customers to produce profit in a day? How popular do you think the brand is in comparison to other franchises? Who are your competitors and customers in the market? These are only some of the questions you need to ask before you can fully understand the market of the business.
- Look for a Business Franchisor
Looking for a business franchisor is quite easy nowadays. They would either post it on their website, put it in a banner on their store front, or you can ask directly if they do franchising for the business. Once you select a particular franchise, you can contact them and sign up for a franchising opportunity.
- Read and Understand the Franchising Agreement
Another important step that you would need to take note of is to fully understand the franchise agreement. The franchise agreement would contain the franchise fee, territory, operating standards, royalties and other fees, termination and renewal, and other things you would need to consider before you agree into franchising the business.
Top Business Brands to Franchise in the Philippines (in no particular order)
- Jollibee
Franchise Package of Jollibee
Initial franchise fee: Roughly between ₱25 million and ₱35 million, depending on the size and scale of your franchise.
For Jollibee franchising inquiries go to https://www.jollibee.com.ph/Philippines/
- 7-Eleven
Franchise package:
Standard franchise (recommended sqm: 120)
Initial investment: ₱1 million to ₱5 million
Franchise fee: ₱600,000
For 7-Eleven franchising inquiries, email: [email protected]
- Yellow Cab
Franchise Packages of Yellow Cab
Mall-based franchise (minimum 100 sqm)
- Initial investment: ₱10 million to ₱12 million
Stand-alone franchise (minimum 600 sqm)
- Initial investment: ₱12 million to ₱15 million
For Yellow Cab franchising inquiries, email: [email protected]
- McDonald’s
Franchise package of McDonald’s:
- Initial investment: ₱32 million to ₱60 million
- Franchise fee: ₱1+ million
- Royalty fee: 5% of gross monthly sales
- Marketing fee: 5% of gross monthly sales
For McDonald’s franchising inquiries, contact 888-500 loc. 5000
- Shakey’s
Initial investment: P18,000,000 – P25,000,000
For Shakey’s franchising inquiries, email:[email protected]
- Shell Petrol
Franchise Packages of Shell Petrol
Company-owned dealer operated
- In this type of franchise agreement with Shell, the company will construct and outfit the fuel station, but the dealer will be responsible for its day-to-day operation and handling customer orders in accordance with the franchisor’s guidelines. However, the availability of such franchise opportunities and the selection of dealers are solely at the discretion of Shell.
- Initial investment: ₱5 million to ₱8 million
Dealer owned and operated
- In this type of franchise arrangement, the dealer is solely responsible for constructing, equipping, and managing the franchise business, while Shell provides only the products and branding. To qualify for this type of franchise, the dealer must have a commercial lot with a minimum size of 600 to 1000 sqm and a frontage of 35-60 meters.
- Initial investment: ₱10 million to ₱12 million
For Shell Petrol franchising inquiries, email: [email protected]
- Petron Gasul
Franchise package of Petron Gasul
- Standard franchise (15 sqm minimum)
- Initial investment: varies depending on business operations
- Franchise fee: ₱200,000
For Petron Gasul franchising inquiries, email: [email protected]
- Monterey Meat Shop
Franchise package of Monterey Meat Shop
- Initial investment: ₱1.5 million to ₱2.8 million
Which includes:
- Franchise fee: ₱336,000
- Construction costs: Approximately ₱800,000
- Equipment and supplies: ₱1.9 million
- Merchandising materials: ₱20,000
For Monterey Meat Shop franchising inquiries, email: [email protected]
- Potato Corner
Franchise Packages of Potato Corner
School cart (4 sqm)
- Initial investment: ₱145,600
Standard cart (4-5 sqm)
- Initial investment: ₱263,200
Customized store (minimum 4 sqm)
- Initial investment: ₱128,800 (with franchise construction cost)
For Potato Corner franchising inquiries, email: [email protected]
- Hong Kong Style Fried Noodles
Franchise package for Hong Kong Style Fried Noodles
Initial investment: ₱39,000
Two sqm mall-quality cart
Griddle, steamer, and basic food equipment
For Hong Kong Style Fried Noodles franchising inquiries, email: [email protected]
- Famous Belgian Waffle
Franchise packages of Famous Belgian Waffle
Standard cart (3 – 6 sqm)
- Initial investment: ₱550,000
Kiosk (6 – 8 sqm)
- Initial investment: ₱650,000
Counter (minimum 8 sqm)
- Initial investment: ₱730,000
Large booth (minimum 8 sqm)
- Initial investment: Prices may vary depending on booth size
For Famous Belgian Waffle franchising inquiries, email:[email protected]
- Lots a Pizza
Franchise packages of Lots a Pizza
Starter cart
- Upfront investment: ₱350,000
Starter depot with a minimum of 4 sqm
- Upfront Investment: ₱450,000
Full-service cart
- Upfront investment: ₱500,000
Stall
- Upfront investment: ₱550,000
Depot or window system
- Upfront investment: ₱600,000
Full store with dine-in
- Upfront investment: ₱950,000
For Lots a Pizza franchising inquiries contact: [email protected]
- Subway
Initial investment: P9,500,000
For Subway franchising inquiries, email: [email protected]
- Dunkin’ Donuts
Initial investment: P200,000
For Dunkin’ Donuts franchising inquiries, email: [email protected]
- Master Siomai
Initial investment:
- P50,000 – P280,000
For Master Siomai franchising inquiries, you can contact the following:
(02) 8-281-3635
(02) 8-709-5288
(02) 8-709-0901
09234419958
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