Franchising Myths

Inquirer:

Rommel Juan, president of novel Filipino food fare Binalot, says the easiest way to get into business nowadays is through a franchise. ‘The success rate of a franchise is higher than starting your own, considering the estimated 85% closure rate of start-ups,’ he cites.

Compared to a startup, a franchise already has a brand, customer loyalty, and systems in place. Pacita U. Juan, president and CEO of Figaro Coffee Systems, Inc. encourages people to get into business through franchising: ‘When you get extra money or a windfall, get a business. You can be a full-time employee or you can be a part-time employee and full-time entrepreneur through franchising.’

Despite the advantages, however, there are also myths surrounding franchising. Here’s what you can do to ensure your success:

Myth #1: Bigger is better. Sure, bigger companies have stronger marketing and more sophisticated systems. But there are smaller franchisers in the market who provide more ‘tender loving care’ to their franchisees.

Myth #2: Cheaper is better. You might get tempted to buy the first franchise you can afford. But be wary of little-known franchisers. ‘Ilan na ba `yung tindahan nila? Mayroon na ba silang commissary? Ilan na ba `yung franchisees nila? And be wary of scam artists. Many try to sell you concepts that are too good to be true,’ Rommel (also the PRO of the Association of Filipino Franchisers, Inc. [AFFI]) cautions. To make sure you don’t get scammed by fly-by-night operators, check the members of organizations like AFFI (caters mainly to local businesses) and the Philippine Franchise Association (addresses both homegrown and foreign businesses). Read on.