Services: Franchise industry’s next big thing

Following the food and retail boom, services are expected to be the next big thing in the franchise industry, with the Philippines seen to do well in this area due to Filipinos’ service-oriented nature.

Philippine Franchise Association chairman emeritus and father of Philippine franchising Samie Lim said that potential franchisers and franchisees would do well to look at concepts in the services sectors.

Services that are seen to be most promising in the country are maid, plumbing, and electrical services, Lim said. Other interesting concepts include pet hospitals and pet hotels, where owners may leave their pets to be cared for while they are on vacation.

“Food and retail will still be big, but those sectors are already very competitive because of the large number of players. Entrepreneurs should consider going into services, as this sector, particularly some of the concepts I mentioned, is still largely untapped,” Lim told reporters.

Another emerging trend in the local franchise industry is multibrand franchising, which Jollibee Foods Corp. is already doing, Lim said.

Gone are the days when companies were constrained to just franchise one brand, he said. These days, having multiple brands under a franchisers’ belt is a good thing.

Jollibee started expanding its food empire by buying established brands and concepts in various food segments, such as Red Ribbon, Greenwich, Chowking and Mang Inasal, and opening these up to franchisees.

Other large franchisers are expected to follow this same model to allow them to address different market segments within their sector, Lim said.

Another trend Lim cited was the master franchise model where one company would be the sole licensed franchiser of a brand within a country. This model may even expand beyond a country and cover an entire region, with the Philippines serving as regional base for franchises for certain brands.

“Franchise businesses are now organized businesses and no longer mom-and-pop operations. Multi-unit franchisees and multi-brand franchisers will be a key trend,” Lim said. “Franchise investment holding companies may also be put up to acquire up-and-coming franchises… those with a lot of potential.”