Benefits and Challenges of a Franchise Business in the Philippines

Franchising is one of the most popular options for people who want to finally start their own business. This is because, on the surface, a franchise business is one of the easiest, most accessible and perhaps a low-risk enterprise that any inexperienced beginner entrepreneur can rely on.

However, beyond the advantages of purchasing a franchise also come the challenges that a potential business owner should be aware of. If you are trying to start your own business through a franchise, finding the balance between the advantages and the obstacles of opting for this business model should be a top priority – especially if you want to cater to the Filipino market.

Here are the benefits and challenges of a franchise business in the Philippines that you should know about.

Benefits

1. Buying a franchise does not require a huge capital.

Buying a franchise is relatively more affordable than actually starting your own brand. Food cart business in the Philippines, for instance, is a thriving and expanding industry that relies on a solid franchise model for its success – and anyone with the will and the financial resources can easily own a franchise business.

As a franchisee, you can already expect a franchise deal with a capital of PhP 30 thousand pesos – Php 100 thousand pesos, depending on the type of product or services that you are offering. This affordability is a perfect business idea for Overseas Filipino Workers (OFWs) who want to earn an extra income for their family back home.

2. Buying a franchise means being a part of a more established brand.

When you buy a franchise in the Philippines, you are also buying the rights to sell or offer the products or services of an already established brand. That means that even if you are new to the franchising industry, you are assured that your goods or services bear a brand that is already popular among Filipino customers across the country.

It also means that since part of the purchase of a franchise involves staff and management training, as well as product and equipment supplies, you are already following a proven and tested business model and management style – thus, eliminating the early challenges of actually starting a totally new business plan.

3. You don’t need to spend a lot to advertise your franchise business.

As mentioned earlier, buying a franchise means purchasing the right to carry the brand name, as well as the product and services of an already established company. While you can make your own effort of advertising your business, the franchisor will also continuously engage in their own national advertising efforts.

Most importantly, an entire franchising system has their own army of franchisees from every part of the country – enhancing public awareness and marketing power for also franchise buyers. Furthermore, what is interesting about buying a franchise is belonging to a bigger and more collaborative effort from the promoters and endorsers of your brand.

4. Consultations, business advice, and assistance will always be available.

As a part of a franchise system, you are assured that you are not going through your business venture alone. For a beginner business owner, it can be really intimidating to experience the daily struggles and challenges of owning a business. The good news is, as a franchisee, you have access to the franchisor’s business experts for consultation, advice, and other aspects of running the business.

Updated research and development will also be provided by your franchisor for the latest and contemporary approach to running a business franchise. Because of this access, the possibility and availability of new products or services that can further improve your business will also be there.

Challenges

1. Buying a franchise means taking in a significant responsibility.

While the franchise system is there to provide you with the necessary resources to get started, remember that you also have the responsibility to do your own research, make your own effort, and work harder for the success of your own business.

Running a business as a franchisee or not, is not a walk in the park. However, rest assured that this challenge of owning the responsibility as a boss, a manager, and a franchisee, will allow you to be a wiser and better business person. Don’t depend on your franchisor for everything. Conduct your own research, hone your own skills, and keep growing.

2. Being a part of a franchise system means following their rules.

As a franchisee, buying a franchise also means agreeing to the set of rules and regulations stated in your contract. In other words, while you own the rights to sell, market and promote the brand, you have the legal responsibility to follow directions from the franchise system. This is to help create order and consistency among franchisees and it gives the franchisors the opportunity to stay true to their business model.

However, it doesn’t mean that you can’t be creative in your own marketing efforts. While it is important to be aligned with the franchise system’s visions, you can still add uniqueness and a personal touch to your business through your advertising and marketing strategies.

3. For any type of franchise business, there are always rainy days.

Many people think that purchasing a franchise is a sure way to earn their first million. There are always expectations that franchising is the easiest and most secure way of doubling their capital in a short period of time. While this can be true for most franchisees, there will always be rainy days ahead.

For this reason, you have to remind yourself that running a franchise of an already popular brand is not always easy. There will be times when your faith in yourself and your business endeavors will be tested, so you have to stay strong no matter what.

There are always options that you can take when you are facing the stormy days in your business. You can seek advice and consult your franchisor. You can also hire business management experts, or conduct your own research. Remember, nothing good comes easy.

Conclusion

Starting your own business can be intimidating, but never let this fear prevent you from reaching your dreams. Franchising or buying a franchise may have its own challenges but rest assured that all your effort and hard work will pay off in the end.

If you want to finally start your very first business journey as a franchisee, here’s an informative article on how to get a franchise in the Philippines.

References:

http://franchisephilippines.org/advantages-of-philippine-franchise-business/

https://www.entrepreneur.com.ph/franchising/franchising-for-startup-entrepreneurs-advantages-and-challenges-esupplier

https://businesstips.ph/how-to-get-a-franchise-business-in-the-philippines/