Franchising will continue to strongly fuel the growth of some of the world’s largest and emerging economies according to a joint statement issued by 32 countries that attended the World Franchise Council (WFC) meeting hosted by the German Franchise Association in Berlin, Germany last April 12-16.
This was announced by incumbent WFC chair and Philippine Franchise Association (PFA) chairman emeritus Samie Lim, who led the Philippine team which attended the international meeting of franchise associations worldwide. Lim was joined by Bing Sibal-Limjoco, PFA vice chair and chair of Franchise Asia 2011 organizing committee and Chit Estrada, PFA executive director. Apart from leading the country’s WFC delegation, Lim also met with financial institutions providing support to the British franchising sector in London, England.
“As articulated in the WFC Berlin Declaration of 2011, the global outlook is bullish for franchised businesses as they are expected to bolster the levels of national income, employment opportunities and investments in the world’s top economies like India and China, as well as ASEAN markets like the Philippines, Singapore and Malaysia,” Lim said.
“Based on the country reports presented by national franchise associations for year 2010, the franchising multiplier remains a vital driver of economic activity,” Lim added. “In this sense, franchising’s important contribution in forging a robust global economy cannot be overstated.”
WFC, an amicable, non-political body founded in 1994, will hold its next meeting in Manila, Philippines on September 20-22. This high-level meeting of leading franchising figures is one of the four major activities of FA 2011, touted as the biggest franchise event in Asia, which will also highlight the country’s position as Southeast Asia’s franchise investment gateway for foreign and local brands according to FA 2011 chair Bing Sibal-Limjoco.
First hosted by the Philippines 10 years ago, Limjoco said “the global franchising community is expectant of another successful staging of Franchise Asia. The challenge for the country is to equal if not surpass the achievements of previous WFC meeting hosts. That is why the entire franchising sector is looking at various organizations and institutions including the government as major partners in ensuring that the very goals of this event are met.”
In the US, franchising currently represents 18 million jobs and US$2.1 trillion of economic activity according to the International Franchise Association (IFA). On the other hand, China’s franchising sector posted total network sales of US$ 47.83 billion and employment of 825,000 individuals based on 2010 figures released by China Chain Store and Franchise Association. The Association expects 10-20 percent growth for both Chinese and foreign franchised brands over the next five years.
Franchising in Great Britain remains very strong as it recorded an overall industry turnover of £11.8 billion and generated 465,000 in employment last year according to the British Franchise Confederation. Meanwhile, the French Franchise Federation revealed that France’s franchising sector had an industry turnover of Euro 48 billion to the French economy. On the other hand, Germany recorded growths in terms of industry turnover, employment and membership in 2010. The German Franchise Association said the sector, which generated 463,000 in jobs posted Euro 55 billion in industry turnover.
In the Philippines, franchising accounted for US$9.45 billion or 30 percent of retail output in 2010 with over a million employment opportunities generated. The sector is expected to grow by 20 percent in the next two years. Lim said this is attributable to several factors like the entry of new players from micro, small and medium enterprises (MSMEs), continued rise of the business process outsourcing (BPO) industry, and introduction of indigenous and food concepts.
“The country is riding the crest of political and economic stability that is highlighted by new investors’ confidence in the country. With consumer index at an all-time, the Philippines offers the most strategic place for expanding and investing in franchising.
The Philippines still has to enjoy the full benefits of franchising as a strategy for growing one’s business,” Lim added. We always benchmark with what the other countries are doing to maximize the potentials of franchising.
In his meeting with representatives of UK’s Royal Bank of Scotland (RBS), Lloyds TBS, and HSBC, Lim noted the banks’ full commitment and support in helping grow the British franchising sector. These banks offer funding programs for both newcomers and established franchises.
RBS has allotted a £100-million franchise fund for new business entrants. It can lend up to 70 percent of the amount required for the franchise business with repayment terms up to 10 years.
Likewise, Lloyds TBS provides between 50 to 70 percent of the total start-up funding required including working capital. HSBC has had a franchise unit for over 20 years that offer investment advice on how to finance a franchise.
Similarly, more and more Philippine banks are now looking more closely to franchising and are offering better programs, Lim noted.
“Hopefully, more financial institutions would be inspired by the lending programs of these banks to enable aspiring and established Filipino franchise players reap the many tried-and-tested investment benefits of franchising. With banks establishing a franchise lending and assistance fund, the sustained growth of Philippine franchising is secured.”
To know more about the event, visit www.franchiseasia.com.ph or www.pfa.org.ph and register on-line for special admission rates. Other details can be obtained from the PFA Secretariat at tel. nos. (02) 687-0365 to 67; (02) 798-2543; 0917-8320731, or e-mail firstname.lastname@example.org. For more information on the Expo, call the exhibit management team Global Link MP Events at (02) 750-8588; 0917-8320732 or e-mail email@example.com.