THE US Franchise Trade Mission, with representatives from 14 American franchises headed by US Department of Commerce Senior International Trade Specialist Kristin Houston, is pitching business concepts to local businessmen as it declared its strong interest in expanding in the Philippines.
“We started this conversation seventeen months ago. February of 2013 was when we started inquiring these companies what countries they felt are most important and the best strategically, the best dynamic in the country for success in franchising, and the Philippines was the one they mentioned as an important market,” Houston told reporters in a roundtable meeting in Makati.
A total of 23 franchise companies applied for the delegation, but only 14 brands were chosen after an evaluation by the US commercial services as to which franchises have the biggest chance of success in the Philippine market.
“Some of them are already in other countries but they mentioned that the Philippines is a very important market for them to enter. We only took the ones we felt had the greatest chance for success,” Houston added.
The Trade Mission comprises a variety of US businesses including those in education, cleaning, food, fitness, and others. The 14 U.S Franchises are Edible Arrangements, Jan-Pro Cleaning Systems, Panda Express, Pretzelmaker, Russo’s New York Pizzeria, Title Boxing Club, World of Beer, Great American Cookies, Marble Slab Creamery, PJ’s Coffee, RadioShack, Tilted Kilt Pub & Eatery, Tutor Doctor, and Wow Café.
Josh Merin, director of the International Franchise Association, the oldest and largest franchise association in the world, said that there is a dramatically growing interest in the Philippines as a franchise market.
There are 42 IFA members who are active in the Philippines and more than half of the top 20 U.S franchises are here in the country, including the highly visible McDonald’s and Burger King.
“Companies are saying that the Philippines is a much more appropriate and sophisticated market than ten years ago. Some of the reasons for this evolution are the growing Philippine economy, the perceptivity to US brands, the strong cultural ties between the US and the Philippines, and the growing sophistication of the Philippine business sector,” Merin said.
He also said US companies and Philippines investors are in the first stage of conversations and negotiations of terms that might take a month or two.
“As the negotiations advance and both parties . . . (express) interest in each other, there will be a discovery day whereby the Philippine investors will go to the US for two or three days with all the executives and all the departments within the US franchise where they will get to understand how it operates for them and vice versa,” Merin said.
This “discovery day” will be the chance for the US companies to engage with the Filipino investors because they both want the best chance at success, Merin added.