Franchising sector girds for fast growth

The local franchising industry expects growth in the next five years to be driven by gasoline station businesses and new concepts in the services sector, said an official of the Philippine Franchise Association (PFA).

PFA chair emeritus Samie Lim said yesterday that there would be an “explosion” in the franchising industry in the next few years, with growth exceeding the usual 20 to 30 percent a year.

“We usually grow by 20 to 30 percent. I think this is the start of us growing more than 30 percent,” Lim told the Inquirer during the opening of the International Franchise Expo Friday.

“Gasoline station is one reason why we will have the explosion. In every gasoline station, you can have at least five, if not 20, franchises. They really are the next generation of most highly visited retail establishments,” Lim explained.

For the first time in the Philippines, the franchise expo featured a petrobusiness pavilion, which showcased concepts involving petroleum and related products.

The three-day franchising expo featured around 500 booths from some 300 companies and is expected to attract more than 50,000 visitors.

Besides food franchises and retail concepts, an emerging trend is service franchises such as salons and spas, Lim said.

He also said that the Philippines was fertile ground for franchising, citing interests from franchise associations abroad.

Franchising in the Philippines has always been good despite the global economic downturn and one reason that the industry is thriving is the country’s relatively young population with the average age of a Filipino at 22 years, Lim said.

Another reason is the proficiency of the Filipinos in the English language.

“Franchising is basically trying to teach somebody else how to run a business. Teaching is communication. Communication is language, and English is the most spoken language in the world,” Lim said.