All You Need To Know About Expanding Into The Philippines Via Franchising (Part 1 of 3)
1. The Philippine market offers an innately large consumer base that is attractive for franchise operators.
Its strategic location makes the country an appealing option as a franchise hub to launch a future Asia-Pacific expansion.
2. Four fundamental ways where foreign franchisors may chose to enter the Philippine market:
2.1) sole ventures
2.2) joint ventures
2.3) direct international franchising, and
2.4) master franchising
3. The most viable franchising entry modes in the Philippine market is through the use of joint venture with a local firm, or appoint a local company to act as a master franchisee and lead the network expansion in the country.
4. A joint venture (JV) is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity.
They exercise control over the enterprise and consequently share revenues, expenses and assets while Master International franchising refers to the contractual agreement between the franchisor and an independently owned sub-franchisor to develop a specified number of franchises in a given area in exchange for the exclusive right to use the business format for a specified period.
Look for out Part 2 of 3 on CBO’s proposed 5 Due Diligence measures to take before making the plunge into the Philippines…
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