Franchising: A crisis neutralizer

CEBU, Philippines - “Franchising is still doing better even during crisis this is because if an entrepreneur has money, they will most likely invest it in the safest way especially now that some banks are in trouble so people are losing trust and will rather invest their money into business,” said Rudolf A. Kotik, founder of RK Franchise Consultancy in an interview.

Kotik said that at tough times, start-up businessmen are more keen to invest into something which has been proven to be profitable and this is through buying a franchise.

“Franchising is the safest way to invest your money because the franchisor has already made money out from it so the chance that one won’t make it is very low,” he said.

Kotik added that as early as January this year, they have sold many franchisees compared to the same period of the previous years.

“Franchising is a neutralizer of a crisis because people can make money from something that has already been proven. As a consultant, we get more clients in franchise development because some companies with several branches now decide to franchise their businesses than to expand it by themselves,” said Kotik.

He said that currently, they are developing the franchise packages of four Cebu-based companies, which include: Moon Café, De Los Reyes Optical, Vienna Kaffehouse, and the Grand Royal Spa.

He said that now a days both food and non-food franchisees are extremely in demand especially service-based franchises like those from the wellness sector such as spas and beauty parlors.

“Crisis or no crisis, food franchises always do well. But right now, the wellness sector is still a very viable venture as well as certain market niches such as pawnshops which are related to the current circumstances of the economy,” said Kotik.

He said in terms of clientele, mass-based franchise has more potential to succeed at these times of crisis.

Another viable venture is education franchise because no matter how bad the economy gets, most Filipinos would still opt to get education for their children, said Kotik.

Meanwhile, in developing a franchise package for a certain business, he said that it takes around four to six months because everything is being accounted for to provide potential franchisees the training, the assistance and all the nitty-gritty fundamentals of starting the business.

Kotik advised that in starting a franchise business, there are three factors that businessmen need to consider and these include money or the ample capital to start a business while the second factor is the interest.

He said that it does not necessarily mean that an investor must be knowledgeable enough in the line of business that they are to start or an expert because interest is more important.

And the last thing to be considered is the location because like any business venture, appropriate and strategic location counts in the success of its operation, said Kotik.

“It’s really much easier for start-up businessmen to get a franchise now a days than to start from scratch because it’s lesser hassle and entails less worries because everything from procurement to operation assistance is given to get them up and going,” said Kotik.