All You Need To Know About Expanding Into The Philippines Via Franchising (Part 2 of 3)
[Due diligence]
Be it a joint venture or master franchising, entering the Philippine market requires careful planning and preparation. You should take the following due diligence measures :
1. Find a Suitable Partner
There are several instances worldwide where international franchising operations were marred by an error in partner selection.
Hence, selection of a partner should be done judiciously as it makes a large impact on the success of a foreign franchise.
The American Chamber of Commerce, Philippine Chamber of Commerce and the Philippine Franchise Association are ideal starting points to meet and gain information on potential franchisees.
2. Identify and Utilize Strategic Control Measures
Establishing ventures in foreign locations often necessitate some form of adaptation and adjustment.
The fact that the culture, market and business conditions, socio-political landscape, and infrastructure could be different from home markets thorough contractual safeguards have to be in place.
Sensitivity to existing disparities have to be factored into the company’s strategic planning.
3. Use the National Capital Region as Entry Point
The supporting infrastructure and distribution systems in the Philippines are well developed in urban locations, such as the National Capital Region.
The cities of Manila, Quezon City and Caloocan are in the National Capital Region and have a population of over 1 million.
These locations also have a wide presence of world-class advertising and marketing support facilities.
It makes strategic sense to establish the initial franchise in these locations while further gaining an understanding of the business dynamics of the country.
4. Set Up Mall Stores
A number of western franchises have experienced success as a result of their presence in major malls. Benefits associated with a mall presence include: high visibility, large foot traffic, convenient consumer access, image building, and easy to complement with national advertising campaigns.
Though, space availability and lease rates may be issues to consider, select opportunities do exist and can prove beneficial.
5. Expand Selectively to Provincial Areas
The Philippine population is spread out across different provinces.
Several provinces have population of over 1 million.
There are issues to consider with regard to infrastructure development, peace and order, and ease of product distribution in certain provinces.
Nevertheless, a well-thought out expansion strategy allows an international franchisor to tap into unique market opportunities that may exist in these developing locations.
[look out for Part 3 of 3 on “How to Register a business in the Philippines”]
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