Agriculture franchising next sunrise industry
Agriculture franchising can be the next sunrise industry. It deserves all the exposure and support the Department of Agriculture (DA) can give—especially with a new business and job-oriented secretary and a supportive Senate that is now deliberating on a bigger industry budget of P167.5 billion.
According to Investopedia, “A franchise is a type of license that grants a franchisee access to a franchisor’s proprietary business knowledge, processes, and trademark under the franchisor’s business name.”
Today, franchising contributes 7.8 percent to our gross domestic product (GDP). Franchised businesses are mostly in food (44 percent), retail (28 percent) and services (27 percent).
Last November 7, the AgriBusiness and Development Foundation (ABCD), in partnership with the Management Association of the Philippines (MAP), held its agriculture business and technology forum. A project started by Ramon Ilusorio and Bernadette Yap, ABCD has been holding a forum every week for the last 18 years. It also has a youth-oriented board led by Julius Barcelona.
Sammy Lim and Alegria “Bing” Limjoco founded the franchising industry in the Philippines. During the forum, Limjoco, also the former president of the Philippine Chamber of Commerce and Industry (PCCI), identified the unique benefits of agriculture franchising.
For the franchisor, it is a method that allows a business owner to grow a successful business using other people’s money, time and network. For the franchisee, it is an effective way to start a business with a higher success rate compared to starting a business from scratch.
A successful agriculture financing case was presented by Hannah Mamon. Having worked for 13 years in one of the biggest fast-food company that grew from franchising, Mamon saw an opportunity for a business that promotes healthy food.
She initially planned for outlets bearing the “Barefoot” brand. With help from Limjoco on franchising technology, Mamon has since opened 200 branches nationwide. Her mission is “to provide extraordinary experience in food and beverage, while having a continuous and sustainable impact on the community by promoting local farm products to the world.”
Though Mamon started her business for personal reasons, her purpose evolved to helping others. She wanted to contribute to her community by “inspiring Filipinos to turn idle lands into sustainable farms with assurance of market. If we made use of our local resources and create extraordinary local products, the Filipinos should not be poor.”
Mamon’s franchisees give seeds to farmers to secure the supply of the franchisees’ products. They also share the right production technology and give them buying agreements. For example, for every five franchisees who sell guyabano, they develop one hectare for guyabano. With the outreach, idle lands thus turn into productive enterprises, thereby contributing to poverty reduction.
Limjoco cited “Potato Corner” as another franchising success story. Due to correct financing technology, “Potato Corner” now has more than 1,000 outlets in the Philippines and is present in six continents.
Based on experience, Limjoco proposed four strategic actions: “First, an information and education campaign on how the agriculture sector can use franchising as a tool for growth and raising standards. Second, capacity building for farmers. Third, government support to the agriculture sector to enable it to increase the quality and quantity of yield. Fourth, a holistic development plan.”
For the fourth, Limjoco cited for example that the Ministry of Agriculture in Korea supports food franchises in international shows to promote Korean cuisine.
With government and private support, agriculture financing can indeed become a sunrise industry that will bring light, hope and progress to our neglected farmers and fisherfolk.