Ask any Filipino what their idea of a franchise is, and chances are, the majority of the answers that you will get refer to brands such as Shakey’s Pizza or McDonald’s. People popularly associate franchising with food and foreign businesses. From my experience, the reason is that my earliest recollections of a franchise include those in which Dad packs everyone inside the car before heading off to Shakey’s or McDonald’s.
These two brands are indeed very popular and largely successful franchises from the United States. The concept of franchising has been around for a long time. Franchising provides entrepreneurs the opportunity to own a business that has a built-in system to run operations under a brand name that ensures recognition.
The hardest part of starting a business is gaining traction. Even if you have undertaken an exhaustive research and have hired the best consultants to design an operational system, everything is still theoretical until proved effective in real-world situations.
You also still have to focus on building your brand. This element is a key in business development, given that your brand represents your enterprise. Developing a brand that can be readily associated by the market to your business takes years.
A franchise takes care of all of that. All you need to do is to be approved as a franchisee, pay the fees, and then implement the program. According to the Philippine Franchise Association or PFA, franchising in the Philippines has a 97% success rate. Thus, entrepreneurs are expected to continue exploring franchising opportunities in the Philippines.
However, what trends are in the foreseeable future for franchising?
PFA President Samie Lim believes that four trends in the Association of Southeast Asian Nations or ASEAN will soon make their way to the Philippine shores:
- International dining concepts. Restaurant brands will branch out to an extensively varied internationally flavored menu.
- European fashion brands. Strong European brands from France, the Netherlands, London, and Spain have shown interest in the Philippines.
- Healthy food options. As people become increasingly health conscious, the market for healthy alternatives continues to grow.
- Interactive technology. Retailers will integrate technology in their systems to provide excellent customer experience.
Mr. Lim has been a visionary. Thus far, we’ve seen several internationally themed concept restaurants open up over the last few years. These include Irish pubs, traditional Korean restaurants, and modern Taiwanese noodle houses. We’ve also noticed the proliferation of yogurt stores, smoothie shops, and tea houses that offer lower calorie and generally healthier options than those offered by regular fast-food restaurants.
As we head toward 2016, we should expect exciting, fresh concepts to appear on the horizon. We should also expect the continued popularity in the proven brands among Filipino consumers.
Related: How to Start a Franchise Business in the Philippines
Looking into our crystal ball, we present in this article the best business franchise opportunities in the Philippines in 2016. We have categorized these into products and services for easier reading.
Best Business Franchise Opportunities in the Philippines for 2016
I. Food Kiosks
Food kiosks are among the most affordable franchises you can own. The minimum investment is approximately Php 20,000, whereas the established brands cost Php 250,000 up.
Of course, you will need to provide a working capital for at least six months until your business gains a regular following.
Food kiosks are popular because they offer Filipinos good quality food at very affordable prices. They are best situated in areas where there is a high volume of foot traffic, such as train stations, food court, and bus stations.
The following are among the best concepts for kiosk-style franchises:
1. Dim sum
There has been a proliferation of dim sum food stalls in the train stations and food courts. Dim sums have been very popular among Filipinos because you can get a full, satisfying, good quality meal for under Php 50. Among the popular ones are the stalls that sell siomai with chili garlic and soy sauce.
2. Street food
Our love for street food has been handed down from several generations and has made its way into the commercial mall. Popular street food fares include fish balls, squid balls, hotdogs, “kwek kwek” or fried duck egg, barbecue, and “okoy” or fried shrimp cake.
3. French fries
French fries are salted carbohydrates. Need I say more? You can actually make French fries on your own without buying the frozen packs. Just julienne the russet potato and the soak in water overnight. You cut your food cost in half by making it from scratch.
These deep-fried pockets of meat with vegetables are a carryover from our Spanish influence. Lately, some food stalls have been selling empanadas that are prepared through the recipe popularized in the province of La Union. These empanadas are made of “longganisa” meat and egg, mixed with vegetables, and then deep fried. They are eaten with spicy white vinegar. They are very tasty and rich in flavor, and each serving is one day’s worth of calories for only Php 50!
5. Coffee stands
Filipinos love coffee any time of the day. It doesn’t matter even if it’s instant as long as it provides a quick pick-me-up. Some coffee stalls include hot chocolate and a small selection of sandwiches.
6. Rice toppings
Filipinos don’t subscribe to the low-carb diet because we love our rice! You can get a hot steaming bowl of rice topped with home- cooked viands for less than Php 75. Rice toppings are a good value-for-money meal for anyone on a tight budget.
It usually costs Php 90 for a piece of grilled pita bread, packed with flavorful, perfectly roasted slices of lean beef, fresh vegetables, garlic mayo, and hot sauce. People recognize a great deal when they see one; thus, shawarma has remained a favorite in the last few decades.
8. Cool treats
It doesn’t matter if it’s summer or rainy season, we always enjoy some ice-cold dessert. The popular choices are “halo halo,” soft serve ice cream, and shaved ice concoctions.
9. Takoyaki Balls
This delicacy has its roots in Japan, and it made its way to the Philippine shores in the early 90s. Traditionally, these are slices of battered and fried octopus meat. Personally, I’m not sure if the local versions do have octopus meat in them. Apparently, people still love them!
This is a popular food item regardless of concept. People always love pan-fried meat between two slices of bread. Some kiosks sell hamburger at half the price of a US fast-food franchise! Among the most popular brands is Minute Burger.
II. Full-service restaurants and fast food
Filipinos really do love to eat! Since the early 1980s fast-food franchises have been popularly patronized by Filipinos. We’ve seen a plethora of food concepts make a landfall in the Philippines almost every year. At the same time, there have been several interesting home-grown concepts as well.
By the late 1990s, we experienced the entry of several high-end brands from the United States such as TGIFriday’s, Chili’s, Italiani’s, Outback Steakhouse, and Kenny Rogers Roasters. Some have seen better days, and the market for full-service restaurants appears to be stable with the entry of IHOP and Buffalo Wild Wings.
Here are concepts that remain popular, and the ones that are slowly establishing their own niches:
Just when you thought you’ve tasted every possible hamburger recipe, a new concept opens up. The noteworthy aspect of the hamburger market is that most of the best ones are local concepts, such as Zark’s Burgers and Brother’s Burgers.
12. Fried chicken
When all was said and done, roasted chicken was dead and fried chicken still reigned supreme! Fried chicken has stood the test of time and remains among the top two best-selling fast-food items in the Philippines. I do miss Popeye’s Chicken, although Tom Sawyer has made a comeback.
The most popular food choice for watching sporting events, late-night snack, or an after-test review treat remains to be pizza. Why not? It’s foldable and offers great value for money. I would like to see a Chicago- style deep dish concept similar to “Uno’s Pizzeria” to open a store in Manila.
14. Chinese food
The popularity of dim sums extends to other traditional Chinese food dishes, such as Peking duck, suckling pig, crispy noodles, and its interesting variety of fried rice.
Filipinos love all types of carbohydrates including pasta. It remains to be among the most popular choices in fast-food restaurants.
16. Filipino food
Of course, we still patronize our own cuisine. Although there are several good Filipino food franchises out there, Binalot stands out because of its innovative concept of using banana leaves to package its meals.
There has also been a surge in restaurants offering genuine, authentic ramen. It should not be a surprise because instant ramen noodles have been quite popular the last few decades.
18. Chicken wings
This is a fast growing segment in the fast-food industry. Several new chicken wing restaurants have opened in the last five years alone. Bon Chon appeared to have started the craze that has culminated in a number of chicken wing franchises.
Even with the proliferation of donut stores in the Philippines, other interesting concepts can potentially find a niche in the Philippines. I don’t know why Voodoo Donut isn’t here yet.
20. Premium ice cream
Despite being much more expensive than its local counterparts, a stable market for premium ice cream continues. The good thing about ice cream is that it stays fresh for a long time as long as it is properly stored. I always felt a Ben and Jerry’s scoop shop here with its servers in traditional tie-dye wear would click.
Starbucks remains the most popular and recognizable coffee franchise chain. However, it is not the most convenient place you can drink coffee! The great thing about a coffee franchise in the Philippines is that there is no seasonal demand. People drink it year-round. Another wonderful thing about the coffee business is food cost is very low! When will Tim Horton’s come here?
This is another tried and tested concept that always have a market in our country because Filipinos love to unwind. However, with similar drink concoctions and prices, the keys to success lie in your food, service, and ambiance.
Related: 10 Things to Consider Before Owning a Food Franchise in the Philippines
III. Non-food/service-type franchises
We live in a time and place where productivity is very important. Service-type franchises are the answer to the excuse, “I have no time.” The following concepts are among those that gain a strong foothold in the country:
23. Car wash
We all love our car, but somehow, most of us don’t give the care and attention it deserves. That’s all in the past with car wash services that are available even in the mall’s parking areas. Some are waterless too!
24. Home cleaning
Keeping our homes clean is not easy especially after a long day at work. Even our household help can only do so much. Home cleaning services can give the home a thorough cleaning that won’t break the bank account.
25. Carpet cleaning
If you have carpets, then you must know that they can house as many as 100,000 dust mites in one square yard. Dust mites cause harmful allergens. Professional carpet cleaning services have the equipment, expertise, and experience to address commercial and residential cleaning and maintenance concerns.
Laundry services continue to be popular since the first few laundry shops opened in the mid-1990s. They provide convenience at very affordable prices.
27. Tutorial / Homeschooling
We have also seen several tutorial businesses flourish since Kumon first opened its doors in the country. Among the popular ones are E-nopi, which is now Eye Level Learning, and AHEAD.
28. Water-refilling stations
They’ve been around since the early 1990s, and the industry continues to thrive despite the number of competitors. Clean, potable water has always been a problem in the Philippines. Thus, there will always be a market for water-refilling stations.
29. Fitness centers
There was a time when Slimmers World was the only recognizable name in the fitness industry. Today, you have Gold’s Gym, Fitness First, and recently, Anytime Fitness. There are talks that other franchises, such as 24/7 Fitness, are coming over to the Philippines.
30. Internet shop
Believe it or not, even in this day and age when people can access the Internet with their mobile phones, a strong market for the Internet shop remains. Its market is mostly made up of gamers, office people, and entrepreneurs printing documents or interacting through social media. Netopia remains the key player in this industry.
31. Car repair shops
We all know how expensive it is to have our cars repaired in a casa. The best option is a car repair shop with the facilities, technology, and supply chain to get us original spare parts. One of the most popular car repair franchises is Rapide.
32. Convenience stores
Their goods may be expensive, but that’s the price you pay for convenience. Over the last few years, several convenience store franchises have opened in the Philippines. Today, it’s not just “7/11”; we also have Mini Stop and Family Mart.
33. Beauty salon
For women, one of the most effective ways to manage stress is going to a salon. Even when things aren’t looking well, it doesn’t mean so should you, right? Several local franchises have proved their track record in the industry.
Instead of drowning your sorrows in alcohol, why not treat yourself to a day in a spa? Nothing removes the stress of the everyday grind better than having treatments in the spa. You loosen up tight muscles, improve circulation, and remove toxins. This business is capital intensive, but Filipinos are more than willing to pay a premium for effective treatments.
The following are some of the things that you need to keep in mind before buying a franchise:
- You are investing in the brand. Keep that in mind when you decide to acquire a franchise because the principal expects all franchisees to strictly observe its guidelines and procedures. You cannot and should not substitute ingredients or short cut processes just to improve profit margins.
- How deep are your pockets? Just like any other business, owning a franchise is not a guaranteed home run. You have to consider the competition, your location, and your costs. Some franchising agreements will require you to adhere to an expansion program, such as 20 outlets in 10 years. Do you have the sources of funding to support an expansion program?
- Is it for you? Even though you bought a franchise, you don’t technically own it. What you paid for are the rights to use the franchise, its trademarks, and its systems to start a business. You have to pay monthly royalties and advertising feed. You cannot introduce changes without securing clearance from the principal. Some entrepreneurs do not like the idea of reporting to another person.
These are just 34 of the most viable franchising business opportunities that you can launch in the Philippines in 2016. There are probably more out there, but these concepts are tried and proven to have ready end users.
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