Business Franchising: A Feasibility Study (draft edition)

Chapter 1 - Introduction

Rationale
Progress and development can be carried with time as both are intertwined to each other. The overseas life of Filipino workers are basically natured by the growing and expensive familial needs of all including single workers who opt to have something before engaging to their own future.

Eventually the absence of a clear plan had brought the OFW's and OFW-m to trial and error where most have landed back to square one.

In the Philippines among the reforms keenly awaited by the financial markets is the Personal Equity Retirement Act (PERA), which provides tax incentives for up to P50,000 in annual investment by an individual. Similar to a law that catapulted the mutual fund industry in the United States, this bill allows investors to realize higher compounded gains for investments set aside each year for as long as the funds are left untouched until age 55.

Under the PERA bill, an individual who starts investing P50,000 each year at age 25 will have P6.1 million in additional retirement funds when he’s 55, based on Bangko Sentral ng Pilipinas simulations. If he saves only P10,000 each year, he can still get about P1.2 million upon retirement.

On the other hand, the same BSP simulations showed that an overseas contract worker who sets aside $50 a month for five years can end up with P1.2 million by the time he comes back home.

There is no difference in the amount but on the time frame.

The previous case study on business venturing published last month has presented some recommendations and one of it was a team-organizing to engage on cooperative if not a corporate business with a presented and approved feasibility study. It beacons good hope for all OFW-m that as their time is nearing twilight, a pioneering business venture is also concieved and be given birth before their home-coming.

Conceptual Framework and Paradigm of the study

The concept of engaging to franchise business made some OFW-m to brainstorm if it is possible to have one in Philippines while they are still abroad having a greener pasture. Others who have international spouse and are based in their spouse' land are conceptualizing the same program.

Business corporations who are open for franchise to the public have some requirements to fulfill in order to engage business with them. The requirements are huge to tackle by one's savings and obviously need the teamworking of interested investors.

Paradigm of the study

Input Moderating Variable Output

• Franchise Requirements
• Location Population, city income costumers, lot and building
• Training Managerial staff manpower
• Team organizing legal aspects Team Captain
• Capital investment corporate system profit/divedend
• others factors

Statement of the Problem

General Problem

The study will aim to look on the minimum numbers of investors to engage in franchise business with a specific minimum share of investment needed to initiate a business by a team of OFW-m.

Specific Objectives

The study will find answers and solution for the following specific problems:

1. What possible business franchises like fastfood chains are open in the Philippines for any Filipino investors with a winnable or feasible status?

2. What are the requirements needed by these business corporations for a franchisee to own one?

3. Where are the best fit locations where the business can have the most feasible costumer considering the population of the place, the gross income of the city, and cultural factors of the possible consumers?

4. Considering the franchise fee, the lot and building and other resources, how much is the possible capital needed in order to transact a business franchise?

4.1. How many possible investors are necessary to feasibly engage to the business franchise?

4.2. How much is per share of investment is necessary to engage to the franchise business?

5. What are the necessary manpower needed and their qualifications to make the business operational and manageable.

Chapter 2

Fast Food Chains and Franchise in the Philippines

Winning investment is a dream of all. In one of the fastfood chains in the Philippines, Jollibee Food Corp. or JFC has a standard policy. And I quote:

Joining the Jollibee Group is a winning investment . Through the years, we have developed into a company with the image that prizes customers above anything else. This is due to the fact that we are always up to date with current consumer trends, keeping a keen eye to what our customers are looking for. We constantly introduce new products, we keep in touch with our customers through various programs and promotion and we develop marketing campaigns that touch our customers' sentiments.

At present, there are more than 570 Jollibee stores in the Philippines. More than half of these are operated by franchisees. However, demand does not wane and opportunities still abound in various regional operations in and around Mega Manila, North Luzon, South Luzon and the Visayas-Mindanao areas. Market opportunities extend to territories abroad. Currently, Jollibee operates 12 stores in the USA. It is also present in Brunei, Hong Kong, Saipan & Vietnam.

The Three B's to Attaining The Company Vision

We at Jollibee have always envisioned the company to become the dominant fast food chain in all the territories we operate in. This vision is the compass that guides us in carrying out our three B's:
Boost the standards of the fast food industry

Build brand satisfactions; and

Broaden our reach to customers

The #1 Employer in the Philippines

In a recent survey made by the Hewitt Associates, as cited in the Far Eastern Economic Review and The Asia Wall Street Journal, the Jollibee Group was the only Philippine Company that made it to the top 20 of Asia's Best Employers list, ranking #16. We also ranked 3rd among Asia's Most Admired Companies in 2000 and we were cited as #1 in Overall Leadership among Top Ten Philippine Companies. Recognizing our drive and our entrepreneurship, we were also named the "Global Growth Company" by the World Economic Forum. Moreover, we are recognized as The Most admired corporation in the Philippines by Asian Wall Street Journal Review 200 (formerly Far Eastern Economic Review 200) for 7 consecutive years (1998-2004)
A Well-Loved Brand

While our awards and achievements already say a mouthful about us, the true test of success is how well we are loved by our consumers. Customer satisfaction has always been key to our success. Never losing sight of our goals, Jollibee has grown to be one of the most recognized and highly preferred brands. We are now the market leader among fast food chains, claiming a market share that totals to more than half of the entire industry.

A Reputable Fast Food Chain Company

The Jollibee Group is a reputed leader and innovator in the fast food industry. Franchise opportunities with us comprise three market segments; namely the Hamburger chain (Jollibee); the Pizza-Pasta fast food segment ( Greenwich ); and the Oriental Food market (Chowking). Recently, we have welcomed into our family, our latest acquisitions -- Red Ribbon, Yonghe and Chun Shui Tang Tea House. With Jollibee, entry into the fast food market becomes easier and more lucrative.

Application Requirements

If you have...
Good community standing Strong leadership and people-handling skills Willingness to devote time in managing the restaurant Can successfully complete the required training program .
... then you have what it takes to be a franchisee of Jollibee!
Apply now for Jollibee franchising! Just follow these steps:
Download and print a copy of the Franchise application form. Please make sure to fill-out the form completely. Prepare a proposal containing the following documents:
• Letter of Intent - containing the exact address of your proposed site, your exact mailing address, contact numbers, etc.
• Vicinity Map of Proposed Site - that will more or less guide our field personnel who will go there and conduct an on-site evaluation.
• Legal document certifying applicant's ownership of the site.
• Detailed resume or bio-data.

Mail these documents to:
JOLLIBEE FOODS CORPORATION Franchising Relations & Internal Events Department 5th Floor, Jollibee Plaza Building #10 Don Francisco Ortigas Jr. Road, Pasig City 1600
If you already know the specific site/location, you may submit the documents to the address below:
For site/locations within Metro Manila: MR. DINDO R. BRISUENO Network Development Manager for Mega Manila 8/F Jollibee Plaza, #10 Don Francisco Ortigas Jr. Road,Ortigas, Pasig City Email: dondi.brisueno@jollibee.com.ph

For sites/locations within North Luzon: MR. EMMANUEL H. ARQUELADA Network Development Manager for North Luzon 29/F Jollibee Plaza, #10 Don Francisco Ortigas Jr. Road,Ortigas, Pasig City Email: emmanuel.arquelada@jollibee.com.ph

For sites/locations within South Luzon: MS. MARIBELLE CRUZ Network Development Manager for South Luzon 9/F Jollibee Plaza, #10 Don Francisco Ortigas Jr. Road,Ortigas, Pasig City Email: ting.cruz@jollibee.com.ph

For sites/locations within Visayas/Mindanao: Network Development Group for Vis-Min c/o MR. DENNIS SIMON Cebu Office: 2/F Jollibee P. Del Rosario cor. Pelaez St., Cebu City Manila Office: 5/F Jollibee Plaza, # 10 Don Francisco Ortigas Jr, Road Ortigas Pasig City Phone number : Cebu Office: (032) 256-1960 loc 2075 Manila Office:(02 ) 634-1111 loc 7068 Email: dennis.simon@jollibee.com.ph

Upon receipt of application, this will take 2-3 months of processing. However, submission of an application form does not obligate you or Jollibee in any way. It is just the first step in the application process, which is an evaluation of your proposed location.
Jollibee franchise ranges from 15M to 30M (USD266,445.00 to USD532,890.00).
Details of investment cost, return of investments and other franchising details will be discussed with you once your application has been approved.

Training Program

There is a measure of comfort to be derived from the fact that a mother company or franchisor will provide continuing support to its franchisees.

Even before a new Jollibee franchisee gets started with building his restaurant - he undergoes a Basic Operations Training Program (BOTP). This training is supplemented with other programs that will enrich the franchisee's management and analytical skills needed in the operation of the restaurant.

Other foundations necessary for a restaurant to take shape - such as store layout & design, equipment specifications, furniture & fixtures and construction management are among some of the major areas where Jollibee provides its support.

In addition, creative advertising & marketing programs, product development, manufacturing & logistics facilities provide the framework to support its growing network of stores. Field personnel will render consulting services once the stores are operational.

This exciting mix of profitability and initiating an influx of employment opportunities for the community has encouraged many entrepreneurs to establish franchises not just in Metro Manila but in the different provinces in the Philippines and in countries across the globe.

Jollibee's 29-year success is most definitively attributed to its franchising system and the quality of its franchisees. Jollibee franchisees uphold the company's stringent standards in food quality and service.

Q and A

How much is the investment required for a Jollibee restaurant?

The financial requirement depending on the final store size and facilities ranges from P15 to P30 Million.

What is included in the investment?

The investment includes the construction of the store, kitchen equipment and facilities, furniture and fixtures, air-con system, signage, and pre-operating expenses.

How much is the return on investment?

The restaurant profitability is dependent on several factors such as sales, market potential, investment and the ability of the franchisee to control his operating expenses. Other questions on financial viability will be discussed only during the interview process.

What is the required lot size or floor area?

The size of the property required for a restaurant is dependent on the store model that will be developed in a particular market.

How long is the training program?

The franchisee is required to successfully complete a 3-month full time Basic Operations Training Program (BOTP) at a designated training store.

Who will provide the manpower to operate the restaurant?

Jollibee will assist the franchisee in the recruitment and training of its management team. However,this team will be employees of the franchisee who is responsible for their salaries and benefits while on training

Other food chains like Chow King also offers franchise for ten years. Franchise ranges from P9m to P12 m with an ROI in a frame of 3 to 4 years. It requires an area of 250 to 300 square meters. A franchisee shall be an individual although he can be a major part of a corporation. Chow king has more than 300 stores in the Philippines, USA, Indonesia and recntly in Middle East.

to be cont.