10 Things to Consider Before Owning a Food Franchise in the Philippines

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Growing up, I was fortunate enough to visit other countries. One of the things my family and I loved to do was trying out different fast-food restaurants, especially the ones we saw on television and in the movies. This was in the 1970s; the Philippines only had Shakey’s Pizza, which I thought at the time was a local franchise.

I remember staying in London, and the tour guide recommended Fish and Chips for lunch. I told my mother that we should eat at Wimpy’s Hamburgers instead. When we experience great food, the taste usually lingers for as long as the memory itself remains. I cannot remember if I enjoyed the burger, but I definitely treasured the experience.

The first time I had KFC, which was then sold as Kentucky Fried Chicken, was at the house of my Uncle Johnny in Detroit, Michigan. At the time, I felt KFC was the greatest thing on earth. The taste was unbelievable! The chicken drumsticks were thicker than my nine-year-old forearm. And the gravy was manna from heaven. I remember asking my Uncle if I could bring home the bucket as a souvenir.

When McDonald’s finally landed in the Philippines in the 1980s, it was such a huge spectacle. My father came home from work earlier than usual and drove us to McDonald’s restaurant in Greenhills. The place was packed and it took awhile for my father to find a table for seven. I was not particularly fond of the hamburger. Tropical Hut was my favorite at the time, and the French fries, especially the sundaes made a lasting impression. A few months later, McDonald’s opened a store in Makati, which was close to home.

The arrival of McDonald’s started a rivalry with our own hamburger flag carrier, Jollibee. As high school students in the 1980s, my classmates and I would routinely make the trek to the Jollibee outlet at Virra Mall. We enjoyed Jollibee hamburger. It was juicy with a peppery aftertaste that is strongly accented with unmistakable flavor of onions. It captured the taste of the Filipinos; a lesson I would learn later in life.

By the time I started working in 1991, I had my sights firmly set on eventually owning a fast-food franchise from the United States. My father had commissioned project studies done on various US fast-food franchises in 1994, while I was attending several seminars conducted by the Philippine Franchise Association or PFA. We had communicated with several franchises including Subway, Krispy Kreme, and Ben and Jerry’s Ice Cream from the US and Second Cup Coffee from Canada.

In 1996, we finally decided on a slightly known hamburger and chicken franchise from Jacksonville, Florida, which found its way among top 50 US fast-food franchises in that year. Flamers Burgers and Chicken served American-sized hamburgers that were freshly grilled over volcanic rocks. I had not tasted Flamers Burger before; it was recommended by a friend of mine who frequented an outlet at White Plains, New York.

In 1997, I flew to Jacksonville, Florida, and met the principals behind Flamers Burgers. They took me to a Flamers outlet for lunch and asked me to pick from their menu. Flamers had five specialty burgers, but I opted for the plain hamburger. I wanted to know how the patty tasted. I felt that a restaurant that uses flavorings on its patty must be hiding the quality of the product.

On first bite, I remember thinking if it was a burger or a steak sandwich. Beef is flavorful because it is marbled meat, which means fat resides within the tissue and as any chef would tell you, “fat is flavor.” But Flamers is made from lean, grass-fed beef. The fat drippings would fall on the volcanic rocks and flavor the patty with its own smoke. And the burger was so juicy because it was grilled-to-order. Nothing at Flamers was premade.

Size, taste, and the grilled-to-order concept equated to a unique value offering in the growing Philippine fast-food industry. Flamers was a no-brainer. We had to get this in the Philippines.

In 1998, we opened our first Flamers Burgers and Chicken franchise at the 3rd floor of the Festival Supermall. Ten years later, that outlet closed down as well as the three other outlets we had put up. Along the way, we lost money, and assets were sold to keep the business running. Our family never recovered those losses.

My point in sharing this story is not to discourage you from owning a fast-food franchise. Rather, this story is shared so you can learn from my mistakes. My experience is just one among the minorities that did not succeed in the fast-food business. There are those that continue to thrive to this day. Economic indicators reveal that conditions are ideal to sustain fast-food businesses.

According to 2013 statistics from Euromonitor International, fast food continued to outperform all other categories in the Philippines’ consumer food service industry. This trend is expected to continue with the growth of the Philippine economy and the rise of the Philippines’ Business Processing Outsourcing or BPO sector, which generated gross receipts of US$14 Billion in 2014. BPO operations oftentimes cover a 24/7 schedule, which have increased demand for delivery service and 24-hour fast-food outlets.

Hence, owning a fast-food business may not be a bad idea. But from my experience, here are a few things that you should consider before you decide to own a franchise.

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