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Local Franchising Industry Remains Strong

Despite the economic slowdown, the domestic franchising industry remains robust with a projected 5 to 10 percent growth in sales this year over last year propelled largely by a robust homegrown franchises, which is growing faster than the foreign brands.

Robert F. Trota, president of the Philippine Franchise Association (PFA), told reporters at the opening of the 17th Philippine International Franchise Conference and Expo (PIFCE) that the growth in the local franchising has been robust despite the economic slowdown.

“We are hitting the numbers. People do suspend their purchases for the luxury items but not food and other necessities,” he said noting that homegrown franchises are boosting this domestic industry rather than the foreign brands.

Homegrown franchises now account for 65 percent of total franchises in the country while the foreign brands are now limited to 35 percent.

Back in 1995, the international concepts account for as much as 85 percent of the total local industry.

The PFA is composed of 240 member brands most of which are homegrown franchises.

Trota attributed the rapid growth in homegrown franchises to new entrepreneurs, who were retrenched from their jobs and are putting their separation pay into franchise business because this is a proven formula for success.

“Franchising has 90 percent success rate,” Trota pointed out.

Trota also cited the Filipino ingenuity and creativity in the new Filipino concepts making them more resilient under the economic downturn.

“Remittances from the overseas Filipino workers are also fuelling growth and the fact that once these Filipino entrepreneurs put 100 percent of their attention into their businesses make them more successful,” Trota said.

Also aiding the local franchises is the low interest rates being offered by the local banks unlike in the US where bank loans are difficult to obtain at this time.

“Bank of the Philippine Islands even proposed to make a presentation to our members,” he said noting that franchising is one sector that banks prefer to lend into because of their proven high success rate.


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