Commentary

Franchising helping farmers

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Successful food suppliers, including restaurants, can significantly help farmers. This is because they can provide the farmers with long-term agreements covering specific agricultural products.

There should be many more such food suppliers and this is where franchising can come in.

Franchising association

Twenty years ago, the Philippine Franchising Association (PFA) was born. As the president of the Philippine Retailers Association, Samie Lim (02-7221045) traveled to many countries. He discovered something important that led to his current passion.

A Dunn and Bradstreet study showed that only 25 percent of small businesses in the United States survive after 10 years. However, franchises recorded a 90 percent survival rate.

Inspired by this, Lim founded the PFA. He subsequently became the chair of Asia Pacific Franchise Federation and is the immediate past chair of the 40-member country World Franchise Council.

The first five years of PFA concentrated on food franchising. Today, some of the more well-known Philippine food franchises that have even expanded to other countries are Jollibee, Chowking, Max’s, Goldilocks and Potato Corner.

Imagine, Potato Corner is now selling French fries in the United States, Indonesia and the Middle East!

Following the model of the popular lemonade stand in the United States, Lim says there is great potential for a buko stand franchise with a distinct Filipino image both here and abroad.

To ensure consistency of product quality and service, a franchise system is necessary.

Franchise vision

PFA’s vision is to create thousands of businesses and millions of jobs.

A franchise provides a successfully tested system of products and services that can easily be copied. Thus, instead of starting a business for yourself, you do not have to do it by yourself. The franchise will be there to help you.

In the Philippines, the normal 10-20 percent success rate of start-ups will increase to 90-95 percent with franchise support. This franchise system is not limited to restaurants.

A food processor that cuts the tuna into sashimi and sushi pieces and sends this to Japan will get more than 10 times the value of the tuna. If this is duplicated in a smaller scale to many franchised processors, the benefit will be multiplied exponentially.

The small buko stand franchise can similarly be multiplied all over the country. With franchise-supervised quality control and added-value products such as buko shakes and buko pies, much more income can be earned from the raw coconut.

Successful agri-business firms should look into promoting small franchise operations that can add tremendous value to the basic agricultural products.

Just imagine the small P1 per text. Because it is spread widely, this translates to hundreds of millions of pesos a day. Similarly, franchised small buko stands spread widely both here and abroad can yield a very large income.

Greatest good

When Lim was in high school, his teacher asked him what he wanted to be remembered for. He replied: “That I did the greatest good for the greatest number”.

With our country’s high unemployment, jobs can be the greatest good one can give our people, both in income and dignity.

It is business that produces the most jobs, and it is franchising that is the best mechanism for helping ensure a small business success.

The agricultural sector has the greatest number of people today. The government and the private sector must therefore give full support to franchising for this sector. Then the goal of thousands of franchised businesses providing millions of jobs in the agricultural sector will be fulfilled.

(The author is chairman of Agriwatch, former secretary for presidential flagship programs and projects, and former undersecretary for Agriculture, and Trade and Industry. For inquiries and suggestions, e-mail agriwatch_phil@yahoo.com or telefax 8522112.)

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