The Philippine Franchise Association (PFA) said it is looking to grow the volume of its member brands’ franchise stores by eight to 10 percent this year, as domestic franchisees continue to expand nationwide and foreign brands enter the local market.
“I think the projection is much lower than last year. Which probably, we’ll hit eight to 10 percent at most for this year,” said PFA Chairman of the Past Presidents Council Sherill Ramos Quintana in a press briefing at the sidelines of the Franchise Asia Philippines 2024 Conference and Expo on April 12.
“That's why we want to talk about year-on-year because that projection is bigger [since] we're hitting for several years,” she added, noting that they are in the second year of the PFA's five-year post-pandemic growth plan.
The PFA currently has 1,800 to 2,000 franchisees or brands under its wing.
PFA Chairman Sam Christopher Lim said that this eight to 10 percent indicator is around the same with its revenue and employment projections for 2024.
Senator Mark Villar (first line, 4th from left) leads the opening of the Franchise Asia Philippines 2024 International Franchise Expo on April 12 at the SMX Convention Center in Pasay City, gathering over 50,000 visitors and trade buyers to view 700 innovative global and local franchise concepts and opportunities until April 14. Joining Villar were PFA board officers and guests (1st line, from left) Franchise Asia Philippines 2024 International Franchise Expo Chairman Robert Trota, president and CEO of Max’s Group, Inc.; Ambassador Extraordinary and Plenipotentiary Royal Thai Embassy in Manila Tull Traisorat; PFA president Joseph Tanbuntiong (Jollibee Foods Corporation); PFA Chairman Sam Christopher Lim (Francorp Philippines); Representative Wilson Lee (AGRI Partylist); Tourism Promotions Board COO Maria Margarita Nograles; PFA vice chair and FAPHL 2024 International Expo ways and means committee chair Ma. Alegria Sibal Limjoco; (2nd line, from left) FAPHL2024 Overall Chair Joey Garcia, (Conti’s/ Wendy’s/ Masuma); GCash B2B growth marketing head Kathryn Cruz; PLDT Enterprise VP Chet Alviz; Sang Seung Man Deputy Chief of Mission & Consul General, Embassy of the Republic of Korea; Philippine Chamber of Commerce and Industry president Enunina Mangio; SM Supermalls senior VP for marketing Joaquin San Agustin; FAPHL expo co-chairman Joey Alvero (Potato Corner); EGSI VP Joel Aguada; (3rd line, from left) GCash head of distributive trade Mark Mamaril; Miss Globe 2nd Runner Up 2023 Anna Valencia Lakrini; Bb. Pilipinas 1stRunner Up 2023 Katrina Anne Johnson; and Malaysian Embassy deputy head of mission Fareed Zakaria.
From the current two million direct and indirect jobs, the group is aiming to increase employment generated to 2.5 million to three million within the five-year plan.
“Post-pandemic is not as easy as everyone says [where] everything comes back to normal. At least we got out of this difficulty of doing business. Everybody wants to bring back what they've lost over the past few years. Typically for a business like us, we are very conservative on our growth assumptions,” said Franchise Asia Expo Overall Chair Joey Garcia.
In terms of membership, the PFA is looking to engage more businesses to be a part of the group, especially since it recorded almost half of the exhibitors in last year's expo as pandemic baby businesses, to widen the group's reach to help businesses scale up.
The business concepts or types of businesses, both foreign and local, are growing, especially food and beverage brands, and assortments of services.
Notably, foreign brands namely from Thailand, Korea, and Singapore are “more aggressive and see potential in the market to expand quite dramatically,” said Quintana.
They noted that it is easier for foreign brands to come in and multiply their branches in the Philippines compared to Philippine brands facing more hurdles or stages before entering and operating overseas like in the United States.
They also cited the self-regulatory environment of franchising in the Philippines, as well as the supply of a young and dynamic labor force aspects that make franchising in the country appealing to international brands.
While local businesses are expanding in the Philippines, potential for foreign expansion of more Filipino brands are being explored. However, in order to achieve this growth, the PFA is calling on the government to provide greater support for Filipino franchise businesses, especially for easier export of Filipino brands overseas.
Quintana mentioned a possible "Green Lane" for business interested in franchising overseas, pertaining to expedited permits and license processing.
Specifically, Quintana noted that the group seeks support in the form of provision of tax incentives for businesses that are scaling up, assistance from the Philippine Food and Drug Administration (FDA) to comply with regulations and registration of products abroad, and guidance on reducing the costs of acquiring intellectual property (IP) ownership for their goods and making applications for the Madrid Protocol more accessible.
"Even with the bottlenecks and the problems that we're facing, we're hoping that we can rally our Filipino brands overseas and we welcome foreign brands coming in that makes us the franchise hub in Asia," she added.
PFA is hosting the 31st Franchise Asia Philippines Expo at the SMX Convention Center, which opened on April 12 and will run until April 14. Out of the 700 brands in the expo, around 100 represented international brands from the United States, Singapore, Korea, and Thailand were included in the showcase.