Why Philippine Franchising Matters: FLA (Singapore) Guide to Asia's Franchise Giant

Why Philippine Franchising Matters: FLA (Singapore) Guide to Asia's Franchise Giant

  • 02 Dec 2024

The Philippines has emerged as a dynamic hub for franchising in Asia, driven by its youthful population and robust economic growth. The nation’s franchising sector is projected to expand by 12% to 15% in 2023, reflecting its increasing appeal to both local and international investors.

FLA (Singapore), renowned for its expertise in ASEAN markets, is dedicated to guiding businesses through the complexities of regional expansion. One of the premier platforms for exploring franchising opportunities in the Philippines is Franchise Asia Philippines, scheduled for April 24-27, 2025, at the SMX Convention Center Manila.

Economic Indicators and Market Potential

The Philippines boasts a rapidly growing middle class, leading spending and a surge in demand for diverse products and services. The nation’s GDP growth rate consistently exceeds 6%, making it an attractive market for franchisors.

The digital transformation sweeping the country further amplifies market potential. With a burgeoning digital economy, businesses can leverage online platforms to reach a wider audience, enhancing brand visibility and customer engagement.

Industry-Specific Opportunities

  • Food and Beverage (F&B) Sector: The F&B industry remains a cornerstone of the Philippine franchising landscape. Trends such as “food as the new fashion” highlight the consumer preference for unique dining experiences, presenting opportunities for innovative F&B concepts.
     
  • Retail Franchise Landscape: The retail sector is evolving with the rise of “retailtainment,” where immersive experiences drive consumer purchases. This trend opens avenues for franchises that blend shopping with entertainment.
     
  • Service-Based Franchise Potential: Services like home improvement, maintenance, and educational programs are gaining traction, catering to the needs of a growing middle class seeking convenience and quality.
     

FLA (Singapore) Value Addition

FLA (Singapore) offers comprehensive support to businesses aiming to enter the Philippine market:

  • Market Research Support: Providing in-depth workshop that provides insights into market dynamics, consumer behavior, and competitive analysis to inform strategic decisions. Click here to watch the recording.
     
  • Compliance Assistance: Guiding businesses through the regulatory landscape, ensuring adherence to local laws and smooth market entry. Enhance your understanding of market entry requirements and franchisee recruitment strategies by enrolling in our WSQ Franchisee Recruitment and Market Entry Strategies course today!
     
  • Network of Industry Partners: Leveraging a robust network of industry contacts to facilitate partnerships, collaborations, and business growth. More details can be found here.
     

Learning Points from FLA (Singapore)’s October 2023 Trade Mission to the Philippines

From October 26-30, 2023, FLA (Singapore) led a highly impactful trade mission to the SMX Convention Centre in Manila, showcasing the vibrancy and potential of the Philippine franchise market.

Key Highlights from the Trade Mission
 

Exhibition Success

The event featured two Singapore Pavilions with 16 booths showcasing 12 prominent Singapore brands. The exhibition buzzed with energy from the grand opening ceremony, drawing a large crowd of enthusiastic potential franchisees and business partners. Singapore brands left a strong impression, effectively forging meaningful connections and advancing their market entry efforts.

Market Visits

Participants also visited key locations, including Shangri-La Plaza Mall, Pet Lovers @ Robinsons Galleria, and Rustan’s, where they gained invaluable insights into the Philippine business landscape, including leasing practices, consumer trends, and the success factors of top-performing brands.

  • Check out moments from the market visits on Facebook.
     

Key Learnings from the Trip
 

1. Consumer Trends
The delegation observed a strong preference for experiential spending among Filipino consumers. Highlights included:

  • Retailtainment: Combining unique entertainment with shopping experiences to influence purchase decisions.
     
  • Food as Fashion: Social dining experiences catering to all demographics, emphasizing aesthetics and shareability.
     
  • Asian Pop Culture: Driving sales with trends in music, fashion, and entertainment.
     

2. Leasing Practices
Understanding local leasing norms is crucial for operational planning:

  • Contracts: Short-term leases (1 year) are common, with renewals for 2 years, while larger spaces like department stores have 10-year agreements.
     
  • Rental Costs: Ranges between 300-1,000 PHP per sqm, depending on location and size.
     
  • Sustainability: Rental costs should not exceed 10% of sales revenue, and manpower costs should stay at 8%.
     

3. Market Entry Tips
To align with Filipino preferences, participants learned to:

  • Adapt business models to suit cultural nuances and consumer habits.
     
  • Focus on location strategy and partnerships with key landlords like SM Group, the largest retail-space provider in the Philippines.

The trade mission was supported by an impressive lineup of Singapore brands, including:

1. Cat & the Fiddle Cakes 
2. Playmade by 丸作 Cray Ventures 
3. Honeypot Wax Boutique 
4. Kinderland Singapore 
5. Kopifellas 
6. Kskin 
7. See Hai Tat Med Hall, Three Star Brand 
8. Subway Singapore 
9. Sunpark Singapore, Takagi Coffee, Maji Curry SG, Kazan Ramen, Kyoto Ramen 
10. Tree AMS (Franchise Management System) 
11. Asiawide Franchise Consultants 
12. Franchising and Licensing Association (Singapore) 
13. The MUI Group, Laura Ashley Singapore, Benjamin Barker 
14. Ice Cream Brandz, Geláre SG 
15. Enterprise Singapore

Conclusion: Setting the Stage for Franchise Asia Philippines 2025

The October 2023 trade mission underscored the immense potential of the Philippine franchise market and provided participants with essential insights to succeed.

Looking ahead, Franchise Asia Philippines 2025 offers an unparalleled opportunity to expand into this emerging market. With support from FLA (Singapore), including market research, compliance assistance, and networking with industry leaders, you can position your franchise for success.

👉 Join us at Franchise Asia Philippines 2025! Learn more and register here: Franchise Asia Philippines 2025