Magical memories

Sure Venture Group of Companies, Inc. had an unusual start-up problem. It had a nice business location and no product to sell.

"My husband, Jason, and I saw this place in a high pedestrian traffic area, which was being rented out. We quickly leased the place and, with the meter running, we had to decide what to sell," said general manager Rosemarie Lee. "Among our options was putting up a photo finishing shop, mainly because I have been collecting pictures of my family and friends since childhood and I was hoping there were many more like me out there."

That idea initially didn’t look viable. There were already three existing photo finishing shops along the same street. The Lee couple’s knowledge of the business was also from the consumers’ perspective.

"We began counting the number of people who would frequent these shops. There was enough business to support another shop. We went to suppliers and we asked questions. Maybe, because we wanted to be in the business and were willing to learn, we became an authorized dealer of Konica Photo Express," said Lee.

The company’s store, branded Memory Magic, opened in April, 1997 with four employees, including Lee. (President Jason Lee helped out during the working day after his day-time job and during the weekends). A few months later, the business was hit by the start of the Asian financial crisis. On the one hand, the shop suddenly had to deal with the higher cost of consumable inputs like photo paper and chemicals, all of which were imported from Japan. On the other hand, the shop could not increase the price of photo developing services, given the stiff competition from other shops and its C-D target market.

"We almost called it quits the first year but the local Konica distributor convinced us to keep the business for another year. For us, it was a leap of faith to stay open for business," said Lee.

Steady Market

Early on, Memory Magic offered free film for every roll of film developed.

"Our market is principally the ‘masa’ who are looking for affordable services but with the right quality. By giving them the film, we ensure repeat customers. When everything is added up, we still made a little money," said Lee.

The first Konica dealer to develop a franchise program in 2002, eight of the company’s 27 stores as of end-2003 are franchisees. This year, at least 10 franchised shops will be opened.

"Ours is a long-term business. Pictures are part of our everyday lives. We want to share our know-how, especially with business owners who have a special interest in photos and memories," said Lee.

With an investment package of between P1.5 million and P4 million (which depends on the location), the franchisee is authorized to use the trade name, Konica Photo Express-Memory Magic, and to hook up to the Memory Magic point of sales and inventory systems. Again depending on the location (always a good spot is near a residential neighborhood or a public market), expected payback is from one to three years.

The minimum space requirement is 30 square meters, with a complement of four personnel. Aside from regular services such as film developing, reprints, and film and camera sales, the company has integrated its studio service called Discovery Portrait into the franchise package at no extra cost.

"Although our motto is, ‘Everyday, low price’, it is important to keep the quality of processed pictures at a high level," said Lee. "Any machine, no matter how high-tech, is dependent on its operator. Color correction depends on the subjective judgment of the operator. This is why we have a rigid training program for shop employees. They train in the classroom and on the job. They learn to discern what looks good and what’s unacceptable."