MANILA, Philippines - Even during times of crisis, business opportunities can still come a-knocking. Actually, there even seems to be more opportunities when times are rough?you just have to know where to look.
According to Philippine Franchise Association president Robert Trota, the franchise business has a 90-percent success rate, even during economic downtimes. But, of course, success takes hard work and time to achieve.
For aspiring franchisees, existing franchise owners and franchise holders emphasize the importance of compliance, focus and trust.
In one of the roundtable discussions at the recently concluded Philippine International Franchise Conference and Expo 2009, Red Ribbon Bakeshop South Luzon operations head Froilan Manotok led participants in threshing out why franchisees fail?and what to do to avoid falling into the same trap.
For franchisees, he said standards were usually the first to fall apart. The franchise holder might start to neglect something as simple as the cleanliness of the bathroom. Complacency in service could follow.
And these, he said, were not things that customers fail to notice. What could seem a small thing could lead to the loss of customers? trust.
?Trust is important. At the end of the day, you can?t force the customer to believe what you believe,? he said.
He reminded franchisees that standards and systems were there for a reason. Franchisors did not spend blood, sweat and tears to formulate these standards and systems for nothing.
?The problem of noncompliance with standards surfaces when franchisees think they know better. You have to have some regard for the franchisor because they?re the entrepreneur and the brains behind the brand. They mean the best for their business,? he explained.
Another cause for a franchise?s downfall is lack of focus and involvement on the part of the franchise holder. This usually happens when the franchisee has other businesses to take care of or is a full-time employee.
While Manotok strongly recommended that franchisees spend as much time on their franchises as possible, he said another remedy to this problem was to get a trustworthy management team that could ably run the franchise in the absence of the franchisee.
?Look for someone you really trust, like a family member, to help you manage your franchise for you. Having the right people is very important. But, of course, you still have to be hands-on,? he said.
Since the right people are critical to the success of a franchise, the franchisee also has to always look out for the welfare of his personnel.
Low employee morale, he said, has strong repercussions on any business.
Another potential roadblock that franchisees have to watch out for is the emergence of competition. Instead of running away from competitors, however, the franchisee has to face them head on.
In dealing with competition, he said franchise holders should have enough trust in the brand.
?Competition is inevitable. When competition comes, don?t show them that you?re scared. Go back to your strengths and build on those,? he said.
An example of properly dealing with the competition, he said, was to just maintain a ?business as usual? stance when the competitor comes up with huge gimmicks.
?For example, when your competitor has ?buy one, take one? promos on opening day, don?t do the same or offer even more because that will just imply that you?re scared. Let your competition have their day. You have your own strengths. Use those to your advantage,? he said.
?You always have to watch out for roadblocks along the way because when a franchise starts to fail, when the bottom line is negative, it?s hard to turn it around,? he added.