$1M gov’t fund for franchise industry sought

The Philippine Franchise Association (PFA) is asking the government to provide a $1-million fund to bankroll a nationwide franchise development program, similar to what neighboring countries Malaysia, Thailand and Indonesia are doing.

In an interview on the sidelines of the Franchise Asia 2011 International Conference on Thursday, PFA chairman emeritus Samie Lim said the government should pay “serious attention” to the franchise industry, given the significant revenues and the large number of direct and indirect jobs it generated for the country.

The local services industry, including franchising, was the country’s best chance to be globally competitive, he said. Manufacturing, while still a big job generator, was no longer a key competitive advantage as other countries had more capacity to compete in that sector.

“The Philippines has moved from the manufacturing to the services sector. We have an oversupply of people, not of manufactured goods. Small manufacturers can’t compete at the scale that manufacturers in other countries can, but we can be the best in the world in franchising,” Lim told reporters.

Lim said the government should step up the level of support that it provided the franchise industry, to ensure that the Philippines would be the destination of choice in Asia for franchisors seeking to expand globally.

“We will request a $1-million fund that can be handled by the [Department of Trade and Industry or the Center for International Trade Expositions and Missions], but they should work with us, like how they work with the furniture industry,” he said. “This could fund a franchise development program, even provide free space for startup franchisors to sell their goods and services.”

Lim said the PFA would also ask the DTI for income tax holidays for franchise businesses. The Philippines, while having the largest number of franchisees in the region and the second-largest number of franchisees in the world, had very little government support vis-a-vis neighboring countries.

The Malaysian government, for example, had a Bureau of Franchising that implemented a franchise development program, invested in master franchises, and provided incubation services for start-ups. It also earmarked $300,000 to bring 100 Malaysian concepts to the larger Indonesian market.