The Philippine franchise industry has a total value of 605 billion pesos, contributing 7.8% to the country’s gross domestic product, reinforcing the industry’s goal of landing on the top five franchise markets in the world in five years, against a backdrop of strong corporate interest in expanding through franchising.
Trade and Industry Secretary Alfredo E. Pascual at the Franchise Asia Conference cited industry data that showed food accounts for nearly half (43%) of the 1,800 franchised brands estimated in the Philippines. The food franchises have an aggregate value of 538 billion pesos or $10.8 billion.
On the one hand, the non-food services and retail sub-sectors each serve almost a third of the franchised brands in the country, with services accounting for 29% of the franchised brands in the Philippines, and retail, 28%.
The value of the contribution of retail and service franchises amounts to 67 billion pesos, or $1.34 billion per category. Non-food franchise trends cover health and beauty products, affordable indulgences, clinics, laundry services, homeschooling, and microfinance, among others.
Together, the entire Philippine franchising industry has a total value of 605 billion pula and employs two million direct and indirect jobs.
With that, Philippine Franchise Association (PFA) President Chris Lim said the industry aims to be among the top five franchise markets in the world.
“In our goal to continue to grow, strengthen and defend the industry, we will accelerate and exceed our growth to become the top five in the world,” Lim said, adding that the industry will aspire to be in the top five in five years. or by 2027.
In addition to the Philippines, the franchise’s current top eight global markets include South Korea, the United States, India, Taiwan, Brazil and France. In Asia, however, the Philippines is seen as the regional franchise hub that PFA wants to cement as such.
Pascual also supported the association’s goal. “With a growing middle class, our country is considered one of the largest franchise markets in the Southeast Asian region. Eating at a popular establishment or owning branded items signals the social status of one of the most social media-savvy Asian populations,” Pascual said.
The DTI chief also expressed his optimism for the sector, noting whether pandemic or not, the Philippine restaurant sector is growing as the demand for convenience increases.
He also noted that the liberalization of the retail landscape and, to some extent, the reduction of import duties have contributed to the growth of the restaurant sector.
In the Philippine manufacturing sector, food accounts for nearly half of its total production, growing at an average annual rate of 8-10% per year. This excellent growth outlook stems from the resilience of the country’s economy and its solid consumer base.
Almost all, about 90%, of the output of the food and beverage processing industry is consumed domestically. Growing consumption, in turn, is contributing to the rapid expansion of the processed F&B subsector. This trend presents excellent opportunities for producers of high-value raw materials and ingredients.
“As quality and efficiency improve, these producers can exploit export opportunities due to the country’s strategic location and free trade agreements with other countries,” he said. he declares.
Many franchisees are micro, small and medium enterprises (MSMEs). DTI is directing its efforts to support post-Covid-19 MSMEs by helping them access capital, access technology and access marketing resources.
Through SB Corporation, the DTI provided financial assistance to MSMEs to provide them with access to capital. The microcredit attached to the DTI helps MSMEs to repay their debts, reallocate existing business capital and acquire new technologies and systems.
Lim said PFA’s mission is to “grow, strengthen an advocate” for the local franchise industry. As the champion of the industry, he said, PFA will ensure that the industry grows more and more through good management and building on past achievements. “It’s about nurturing and developing future leaders,” he said.
As such, Lim was confident of a more vibrant Franchise Asia Expo from October 14-16 with over 270 booths.
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