A high-ranking official of the Philippine Franchising Association has urged citizens who would want to get into a business that it is time to withdraw their hard-earned savings and franchise a business, as the investment climate is indeed regaining its momentum from the ill effects of the Covid-19 pandemic despite the inevitable challenges.
In an interview during the kick-off of Franchise Asia Expo Philippines on Wednesday, PFA chairperson Sherill Quintana pointed out that even though the country is facing many challenges, operating one’s own business still has the advantage compared to being just a salary-dependent employee.
“If you have savings in the banks, it’s time to withdraw it because it’s not going to earn, and maybe, it will be reduced due to bank charges. Pull it out and invest in the business because the way to beat inflation is to put your money into an investment,” Quintana said.
Despite the encouragement, Quintana warned budding business owners that they should equip themselves with the right amount of courage because of such inevitable challenges as rising fuel costs, inflation, devaluating peso, and finding the right personnel, among others.
“Since the Bayanihan Act is already expired, financial inclusion primarily hurts those who want to own a business because interest rates these days are so high, ranging from 8.5 that can reach 10.5 percent since some banks are also not liquid,” she explained.
Pivoted business has the advantage
One thing that elated Quintana was the fact that most franchisors have already made a pivot and have embraced digitization – the silver lining brought by the pandemic to many businesses.
“Franchising has evolved during the pre-pandemic stage, in which you have to have a physical store when franchising. It’s way different now. We now have home-based franchising wherein you can start your business in your home, product distribution, and home-service businesses. It has become a creative segment, as franchisors have to pivot, otherwise, they’re dead,” she said.
She also pointed out that businesses that did not close their shops during the onset of the pandemic are those who have already started their digital journey — especially those who started utilizing social media and the internet space to reach their target market.
“Local businesses should truly level up, as foreign investors also want to penetrate the local market,” she stressed, revealing that almost a hundred international franchisors from more than 500 attendees who joined the Franchise Asia Expo are foreigners coming from Malaysia and Taiwan.
Forty percent of the attendees of the expo are new entrants that have a variety of new businesses to offer to those who would want to start their franchising business as many of the franchisors in 2020 closed shops when the pandemic hit the country.
The Department of Trade and Industry said about 26 percent of businesses in the Philippines have closed in July 2020.
Of the 2,135 companies surveyed, 25.9 percent have ceased operations (including temporary shutdown), 52 percent are in partial operation, and 22.1 percent are in full operation.
2 years
Quintana said it would take two years before businesses can recapture their pre-pandemic footing but she said they are still optimistic to surpass the 77 percent contribution that the micro, small and medium enterprises have given to the country.
“We hope to add from 8 to 10 percent. But it would take us two years or until 2025 to regain our revenues back then. If we lose two years, we must double it to rebound. So hopefully with franchising, we can shorten if more people will franchise businesses,” she said.
Franchise Asia Philippines 2022 is now ongoing, from 14 October to 16 October at the SMX Convention Center.
The event gives prospective franchisees a chance to meet with top franchise brands face-to-face, as the expo is a one-stop shop featuring homegrown and international brands in the food, retail, and service sectors. It will also showcase learning sessions and seminars for prospective franchisees and aspiring franchisors.