The phenomenal growth of the multibillion-peso franchising industry in the Philippines could not have been possible without the guiding role of franchise consultants.

These consulting firms continue to fine-tune the craft of cloning modest-sized Filipino businesses into successful multiple-outlet franchised operations. In the process, they have also helped ease the startup or expansion pains of both franchisor and franchisee.

For RK Franchise Consultancy, the success of franchising in the Philippines comes hand in hand with a rising awareness among Filipinos to go into business.

Owned and managed by Rudolf Kotik and Margarita Nacua, RK Franchise has to date guided more than 300 companies in fording the road to franchising. Their clients include food carts to call center operations.

Before coming to the country in 1988, Rudolf, an Austrian, had worked for European franchise divisions of several companies including McDonald’s and a hotel chain. He made his first home in Cebu, where he brought in foreign brands for local businessmen interested in franchising.

During the Asian contagion in 1997, as the peso weakened, the cost of foreign-branded franchises became prohibitive. This was when the idea of focusing more on franchising local brands developed.

In 1995, Rudolf set up RK Franchise after coaching several of the island-based businesses in developing their own franchising manuals and operating systems. Four years after, Rudolf moved his office to Manila. By this time, he had already helped set up 20 franchise systems.

Food businesses dominate RK Franchise’s client list, and accounts for about two-thirds of the total. The food carting business, in particular, has been appealing among wannabe franchisors.

“The food is good, healthy and cheap. The packaging is attractive,” Rudolf says. This describes why there is a continued patronage and popularity among Filipinos of snacks sold in carts. For potential franchisees, though, the food cart business requires lower investment, reasonably acceptable returns and ease of mobilization.

One of RK Franchise’s success stories is Kuya Chito’s Takuyaki, a food cart outlet selling Japanese snacks. For several years, owner Edgino Bogayong had been quite happy with supervising and operating seven carts in strategic malls in General Santos City.

When Edgino decided to franchise Takuyaki in 2005, he called Rudolf. It took RK about a year to develop the Takuyaki franchise system. When RK formally rolled out Takuyaki, it took them less than a year to expand the food cart’s reach to over 80 new sites.

New frontiers

Lately, other nonfood businesses have started to pick up the franchising idea, according to Rudolf. In particular, he cites the growing number of businesses in the service, pawnshop and drugstore sectors that have approached him for his advice and tutelage.

There are also big-ticket franchises for jewelry stores, business processing centers, gasoline stations and hotels that are seeing the benefit of taking the franchise route to expand their businesses. Because franchise fees here could easily start at a couple of million pesos, the number of interest of franchisees understandably is fewer.

While there are emerging businesses, there are also those that are becoming overcrowded and, therefore, a challenge to RK Franchise. One such is the salon and spa business. In one of the surveys they did, Rudolf noted that one of three business establishments in a commercial district had a spa or salon. “We don’t know how they could make money,” he said.

Making a decent profit remains one of the main concerns of RK Franchise for both their franchisor and franchisee. Long after they are paid for their fees for structuring the franchise, developing the contracts and operating system, the manuals, and the training programs, the franchise owner remains a lifetime friend who may call for advice any time.

Franchisees, or those who own the right to operate a franchise, on the other hand, are similarly provided with adequate advice. “While we do not guarantee that all franchisees will earn, we try to help them, for example, relocate to a new venue,” Rudolf says. Franchising, after all, has a failure rate of five percent, he adds.

“Our goal has always been to help professionalize franchisors, while at the same time, develop our franchisees to be professionals,” Rudolf says. He looks forward to rolling out his 1,000th franchise operations before considering slowing down from his seven-day, 15-hour work schedule.

“Perhaps by that time, I’ll even have my own franchise,” he says, bellowing out a big hearty laugh.

You have to take Rudolf seriously because, on RK Franchise’s current list of clients, RK Franchise Consulting is conspicuously listed. His clients include Cravings, Via Mare, Hap Chan, Mongkok, Mocha Blends, and Java Man.

Emerging franchises:

Jewelry stores
Business processing centers
Gasoline stations
Hotels
Services
Pawnshops
Drugstores