Franchise industry sets sights on becoming top dollar earner

MANILA, Philippines -  The franchise industry is expected to grow faster in the next two years on the back of the sustained expansion of the local economy, fueling hopes it would rise to become the country’s next top dollar earner.

Philippine Franchise Association (PFA) chairman emeritus Samie Lim yesterday said the industry is seen growing at least 30 percent this year and next.

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

“The next two years will be a phenomenal growth of at least 30 percent,” Lim said.

“In more advanced and developed countries, franchising is about 50 percent of total retail sales. In the Philippines, we are only about 25 percent so we still have room to double that so that every other store will become a franchise,” he added.

With some 1.2 million jobs generated by the industry at present, Lim said additional employment of 1.5 million are also being eyed in the next two years.

“Franchising is where you can start a business with very small amount because it is meant for the micro, small and medium enterprises (MSMEs). You can start a franchise for as low as P100,000 to a high of P20 million if you want,” he said.

Lim, however, said challenges continue to impede the sector’s growth, among which are the lack of financing for budding entrepreneurs in the country and high rental costs in malls.

“Filipinos, we are people with great talent but we lack financing,” he said.

“The mall rental is definitely a problem but many people are moving out of the malls also. And that’s where franchising will grow because franchising is supposed to be serving the community. As traffic becomes more of a problem, people will have difficulty going to the malls, so people now want to shop in the vicinity or right in the front of their residences,” Lim added.

With so much potential for growth, the franchise industry is seen capable of becoming the country’s next top dollar earner.

At present, Lim said the industry is in the middle of the top 10 dollar earners of the country, led by OFW remittances and the business process outsourcing sector.

The PFA earlier said it is more bullish in terms of industry growth and prospects under the current administration given its strong push for the development of MSMEs.

The PFA is set to hold the 25th edition of Franchise Asia Philippines 2016 on July 19 to 23 at the SMX Convention Center in Pasay City.