Best Philippines Franchise Business Opportunities (2019)

Are you looking for best Philippines franchise business opportunities for you?

If you are already decided that franchising is the right business for you, you can skip to the list of best franchise business opportunities right away.

But if you are still undecided, let us guide you in learning about franchising.

What is a Franchise Business?

Before deep diving into a franchise business, you should first know the basic concepts of franchising.

Let me define some important terms that are related to a franchise business.

Most of the definition of terms here are taken from the International Franchise Association.

What is Franchising?

The International Franchise Association defines franchising as the method of business expansion characterized by a trademark license, payment of fees, and significant assistance and/or control.

In its essence, franchising is a marketing concept or a method of distributing goods and services.

It is not a class or type of business but rather a way of doing business.

Who is the Franchisor?

Franchisor is defined as the person or company that grants the franchisee the right to do business under their trademark or trade name.

Who is the Franchisee?

The Franchisee is the person or company that gets the right from the franchisor to do business under the franchisor’s trademark or trade name.

What is a Franchise Agreement?

A Franchise Agreement is a legal, written contract between the franchisor and franchisee which tells each party what each is supposed to do.

What is a Trademark?

A Trademark is the marks, brand name and logo that identify a franchisor which is licensed to the franchisee.

What is a Royalty?

A Royalty is a regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee’s gross sales.

What does a Franchisor do?

As a prospect franchisee, it is also important to know what you need to expect from your franchisor.

Franchisors are normally responsible for the following:

Searching and Selecting Franchisees.

It is crucial for a franchise business to carefully vet and assess a candidate if it is qualified to be a franchisee under their own standards.

Remember that a franchisee will be using their trademark and trade name.

Thus, any good or bad action done by the franchisee will reflect upon the reputation of the franchise business.

Providing Tools for the Franchise Operation.

Franchisors normally provide the necessary tools, equipment and raw products that are needed for the operation of the franchise business.

This is to ensure that it meets the brand’s own standards.

Creating and Enforcing Standards and Policies.

In relation to protecting their brand reputation, franchisors also need to set systematic standards, rules and specifications that will be put in place so that franchisees will be guided of any do’s or don’ts and any business practice that they need to adhere.

Most of the time, it is in the form of an operation manual.

Providing trainings to Franchisee.

Another task that Franchisors do is to provide the necessary training to the Franchisee.

This is to ensure that the franchisee and the staff understands their role in the franchise system.

Trainings are also needed in order to teach the required skills for the franchise operation.

This can be in the form of classroom training or actual / on-the-job simulation.

Some provide both types of training sessions.

Most of the time, the initial training happens at the headquarters of the franchisor or if they have any training facilities.

For the cost of the initial training, it is mostly included in the franchise fee.

Please also allot time and effort in these initial training as it is your opportunity as a franchisee to learn all the details of the franchise business and to ask questions.

Sometimes, franchise contracts also include termination clauses for the franchisor in cases where it deems that the franchisee does not meet its standard after the training.

Marketing, Promoting and Advertising the Franchise Business.

Promotional activities and advertisements are also carried out by the Franchisor in order to promote their brand.

This can be on a national or local level and can be in the form of TV or radio commercials, email campaigns, public / media relations and online advertising.

Some franchisors require franchisees to contribute certain amount for these efforts.

It goes to a “brand fund” which finances the marketing and advertising efforts of the franchise.

You are not stopped from doing marketing and advertising yourself especially to your local area.

Although, marketing materials that you have created are mostly likely need to be approved first by the franchisor.

Location Selection.

One of the most important element for the success of your franchise business is the location.

Some franchisors help the franchisee look for a viable location.

On the other hand, some franchisors do not allow franchisee to choose their location at all.

In cases where franchisors look for the location on behalf of the franchisee, I can see a positive side in this as the franchisor already has experience in location selection and the probability of success will be greater.

If you are free to choose your own location, most franchisors will provide you with guidelines on which type of location you should be looking for.

They will also require you to submit location proposals with site details and costs associated with it. They will then carefully assess it and approve the location if they deem it fit for their franchise business.

Although, it is important to note that an approved site location does not immediately guarantee success for your franchise business.

It just means that your propose location fits in to the criteria of the franchisor.

Providing Financial Assistance.

Some franchisors create financial programs in order to help a prospect franchisee in their costs.

Available for Operational and Technical Support.

Most franchisors provide technical or administrative support to the franchisee.

They can be the franchisee’s advisor for internal issues such as employee relations or insurance requirements.

Also remember that a franchisor to franchisee relationship is bound by a contract. Always carefully check through your contract details for the scope and limitations of the franchisor’s support to you as a franchisee.

Conduct due diligence and ask questions if there are unclear provisions so that you can have the right expectation set for the assistance you might need from the franchisor.

Motivated to Shares their Own Experiences.

A wise way to learn is to learn from other’s mistake.

Franchisors need to be motivated in sharing their own experiences to their franchisees to ensure that they won’t commit the same mistakes or experience the same issues that they have encountered before.

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List of Philippines Best Franchise Business Opportunities

Are you looking for the best franchise business opportunities in the Philippines?

Look no further as we did the homework for you!

Here is the list of Philippines Best Franchise Business Opportunities for this year which you can check out if it fits for you.

Take note that this list will continue to grow as soon as we find franchise business opportunities.

Be sure to revisit this page if you are really interested!

Another note, we are not associated to most of the franchises listed here and we do not represent them in any way.

We just want you to have a quick overview of franchises in the Philippines and help you decide which franchise is best for you.

25 Franchising Advantages and Disadvantages

Owning a franchise can be a quick way to create a business without the need to start from scratch.

However, it is not spared from the fact that a franchise business also has disadvantages.

Here are some of the Pros and Cons of Franchising.

Franchising Advantages

Benefits of Owning a Franchise for the Franchisee.

1. You will be using an Established Brand and Trademark.

Most franchise business already has a recognizable brand to the public.

You will be able to use this for your franchise business in order to attract more sales and customers.

You will also benefit from the marketing and promotions by the franchisor.

2. Lower Risk of Business Failure.

Since you are being guided by a franchisor who already has an existing business, you will have a lower risk of failing.

This does not mean that you are guaranteed to succeed with the franchise business but rather it gives you an advantage since you will no longer be starting from scratch.

If you do your due diligence, you can also check and ask other existing franchisees of the business and assess if they are doing well.

3. No Longer Need to Market Test.

Same as above, the franchise business is already an existing business meaning the product and services it offers already have an established market share.

You no longer need to prove that there is a demand for that product or service as you are already adapting a tried and tested business model.

4. You can have a faster return on your investment.

As the business model is already tried and tested, there is a high probability that you can recover your investment much faster using a franchise model.

Moreover, the brand’s reputation will also have a factor in the ROI rate.

5. You will be able to Compete with Big Businesses.

Since you have in a support group (with the franchisor and their other franchisee), you will be able to compete with big brands and nab market shares in your chosen franchise category.

6. You do not need to have previous knowledge and experience.

You are not required to have prior franchise experience as you will be trained by the Franchisor.

7. Getting Suppliers for your Franchise business will no longer be a problem.

Most probably, the franchisor has already established a good relationship with various suppliers for their franchise business.

This will no longer be a problem that you will need to face and sort out.

You can also enjoy bulk discounts that can be given by suppliers to their franchisor’s business network.

8. You are not alone - the franchisor provides support.

The Franchisor usually provides administrative and operation support to their franchisee.

Although this differs depending on what is indicated in their contract.

A support system that already has previous experience with the business is a huge advantage over setting up your business from scratch.

9. Franchisors usually help you in pre-opening and grand opening events and requirements.

Of course, the franchisor wants you to succeed so they’ll be assisting you in every step of the way: from pre-opening requirements up to your grand opening day and to your day to day operations.

10. Marketing and Advertising is also done by the Franchisor.

As indicated in the previous section, marketing and advertising the franchise brand is also done by the franchisor.

As you have the same brand as the franchisor, you do benefit from this efforts.

They usually do the promotions in a national and local scale.

Some brands employ celebrities as endorsers for their products and services.

11. Continuous product or service research and development.

You do not need to worry about further innovating your product or service.

Most good franchisors continually conduct further research and enhancement to their products, services and processes to be more efficient and customer-friendly.

Franchisors usually allot a budget for this so you can just focus on the franchise operation and leave R&D to the franchisor.

12. You can get Loan Approval more easily.

If financing your franchise business is a problem, you can get loan approval more easily especially if the franchise business that you are targeting has a good brand reputation.

Lenders take into consideration the franchisor’s experience and reputation when deciding if they’ll lend you money or not.

13. Easier to get a good location.

Aside from getting loan approval much faster, you can also get a good location much easier if you are franchising a business with a good reputation or is a popular brand.

Mall owners, especially in the Philippines, prefer popular franchise brands to lease their spaces as it can draw in more foot traffic to the mall.

14. You will have Exclusive Rights in your Area.

Most franchisor would ensure that you have exclusive rights to the franchise business in your area.

This means that they won’t sell any other franchise license in your immediate vicinity.

Benefits of Owning a Franchise for the Franchisor

If you would decide to be a franchisor yourself in the future, here are some benefits for you:

15. Lower Capital Requirement for the Franchisor.

This franchising benefit is for the franchisor.

The Franchisor will have a lower capital requirement for a branch that he or she intends to open as the franchisee provides most of the capital.

16. Fewer Employees Needed.

Franchisors will need much fewer number of employees in a franchise business in comparison with running the business on their own.

17. Faster Growth of the Business.

The Franchisor’s business will grow much faster under a franchise network as smaller overhead resources are needed in the expansion.

It will be the franchisee who would be providing and compensating the additional capital or employees for the new sites under the franchising business model.

Business expansion will also grow as a franchisor gain more franchisees as more local markets can be tapped.

18. Less Involvement in Everyday Operations.

As a franchisor, you will have fewer involvement to day to day operations of a franchised store or site.

It will be mostly the franchisees’ responsibility to ensure that operations is working smoothly.

Franchising Disadvantages

Pitfalls or Problems of Franchising for the Franchisee

Total Cost can be much higher.

Since you will be paying a franchise fee, cost will be much higher than starting a business on your own.

Aside from the franchise fee, you need to consider other fees such as:

Operational costs or cost of your supplies.

Some franchisors include the initial supplies inventory as part of their franchising package.

But for the next batch or for the next month, you need to shoulder the cost associated with the procurement of those needed supplies for your daily operation.

Rental or location costs.

If you own a commercial lot, you do not need to worry about this.

If you don’t, you would need to consider this cost in your total cost computations.

Advertisement and marketing fees.

Most franchisors pull funds from franchisees in order to add to their marketing and advertisement cash fund.

Renewal Fees.

The franchise license that you will be buying will only be good for a certain period of time as set by the franchisor.

You will need to renew your franchising license after the term period and it will be the franchisor's decision on how much he will charge for the renewal fee.

Royalty fees.

Not all franchisors impose royalty fees.

It will depend on them if they want to charge this as part of their franchise business model.

There will be restrictions on how you will run the franchise business.

If you value freedom in your business decisions, franchising might not be for you.

Most Franchisors add restrictions to their franchising agreements.

This prevents you from making any changes in any form without asking for approval from the franchisor.

If you see the need to make a change to respond to what the market is dictating, you might get turned down by the franchisor if they do not share the same point of view.

Creativity and innovation also has no place in franchising as every changes needs to be consulted with the franchisor.

There is a risk of the Franchisor’s business closing down.

Of course, this type of risk is present in every business but the disadvantage here is that you have no control once the franchisor decides to call it quits.

The franchise’s brand might get a bad reputation courtesy of other franchisees.

Since you will be sharing the brand’s reputation, other franchisees’ bad action or unruly behavior or practices will certainly have an impact on the overall franchise business reputation.

The franchise business will be difficult to sell.

Should you decide to sell your franchise business as a franchisee to someone else, you might find it difficult as you will need approval from the franchisor.

If he or she does not agree to sell it to that particular person, you can’t do anything about it.

Profits are shared with the Franchisor.

You do not own the entire profit of your franchise business.

Most franchisors require profits to be shared with them.

This will depend on the franchising agreement that you have agreed upon.

They will also specify there the amount of percentage that you need to share with them.

Franchise Agreements include contract period durations.

Almost all franchise businesses have a lock-in period for their franchise agreements.

If the franchisor’s business is going down, you can’t easily opt out if you are still within the contract duration.

Furthermore, if your franchise lock-in period already expires, the franchisor will have an option to decline your renewal if they are not satisfied with your past performance as a franchisee.

List of Best Philippines Franchise Business Opportunities

Are you looking for the best franchise business opportunities in the Philippines?

Look no further as we did the homework for you!

Here is the list of Philippines Best Franchise Business Opportunities for this year which you can check out if it fits for you.

Take note that this list will continue to grow as soon as we find franchise business opportunities.

Be sure to revisit this page if you are really interested!

Another note, we are not associated to most of the franchises listed here and we do not represent them in any way.

We just want you to have a quick overview of franchises in the Philippines and help you decide which franchise is best for you.

Food Cart Franchise Philippines

Disclaimer: All investments have risks. We do not guarantee returns or positive results on any of these investment or business opportunities. Past performances are not to be used as guarantee for future returns. We are not promoting or discouraging you to invest in this product or business. Always do your own due diligence and research when choosing an investment. Happy investing!

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