Philippine Franchise Association - the peak of the development of the franchise business in the country will be reached in 2025

The Philippine Franchise Association (PFA) expects the number of franchised outlets in the country to increase to 250,000 by 2025.

PFA Founder and Chairman Emeritus Sami Lim made a statement yesterday at an online seminar. The gist of this statement is that the number of franchised outlets will decrease this year due to the ongoing quarantine. The industry can only bounce back if the business has certain services, such as shipping. The growth of the franchise market is planned for 2021.

According to him, out of 200,000 outlets in early 2020, only 130,000 outlets will remain by the end of the year, and by the first quarter of 2021, only 110,000 outlets will remain, because distressed and unprofitable franchise companies lose revenue and were forced to close their outlets due to the COVID-19 pandemic.

PFA Chairman Richard Sans said the franchise industry will lose about 200 billion Philippine pesos of possible revenue due to the COVID-19 pandemic this year. He also said that the closed franchises will be replaced by new and more competitive players in the market. This will allow the country to reach a number of more than 250,000 franchised outlets by 2025.

According to the PFA's statistics department, there were 2,000 domestic and foreign franchise brands in the country prior to quarantine. When the government imposed quarantines to prevent the spread of the virus, Lim warned that the industry was in dire straits and needed government subsidies, but recent polls by PFA members show that more than 70% of people see positive developments in franchising in the future.

According to Sami Lim, the golden age of franchising and the opening of 250,000 outlets will be achieved through strict adherence to three principles: an objective assessment of reality, the fastest and most effective actions, and active expansion in the market. “By 2021, we must actively accelerate our expansion plan, leveraging an unprecedented number of good potential franchisees, available offices across the country and a good pool of available management talents,” he said. He noted that the greatest growth among franchise companies is observed in the field of medicine and personal care.

Chris Lim, PFA's director for ACEAH and Special Projects, said that because of pandemic demand for franchises based on remote work, such as "cloud restaurants", will increase.

He said he hopes to replicate the remote business model in Southeast Asia as well as in Europe.

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