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3 Franchising Tips from the Founder of Bibingkinitan

Bibingkinitan CEO Richard Sanz says to do it right from the start to multiply success and not problems.

Franchising is about replicating your business. So it is important to have strong foundations and a profitable business model so that franchisees can replicate your success and not your problems.

“Some people would come to me and tell me they want to franchise their business so that they can expand and scale up,” said Philippine Franchise Association (PFA) chairman and Bibingkinitan CEO Richard Sanz said in a recent webinar. “That’s good. But there are those who want to franchise their business because they want to save their business from closing down. Some are experiencing losses and problems and they are looking at franchising as the savior to their business.”

Franchising does not make a business profitable. If a business is losing money, franchising will just replicate an unprofitable business. This is why Richard Sanz shared a few tips to make sure you start your franchise journey right.

1| Determine the viability of your business model before franchising

Franchising has a multiplier effect. Richard Sanz emphasized that if your business is currently doing great, franchising will multiply and enhance your success. This means that the success rate of franchising your business depends largely on your current business model or prototype: whether it’s simple, relevant, quality, and profitable.

“But if your business is already experiencing some problems, franchising will only multiply your problems,” he cautioned. Imagine if your current business is experiencing problems on supplies, logistics, or on marketing. Franchising will not solve these problems. In fact, your business will only suffer from franchisees that will definitely face the same problems.

Determining the viability of your business model is definitely the top priority even before you go into franchising. If your business is currently problematic, you have to re-think your business, finetune the systems and operations, or you can change your business model and start a better one. Once your business becomes stable and profitable, that’s the time you can look into franchising so that you can expand your reach and enhance your success.

2| Know your market well

Businesses who go into franchising have a vision of scaling up to dozens, hundreds and even thousands of stores. “You will need many locations [for your franchised stores]. So, one of the most vital things is to know your market well so you will know where to expand.”

Although it’s the responsibility of the franchisee to find locations, they will rely on the franchisor's expertise to determine the viability of those locations. “Know the demographics and psychographics of your target market. Knowing your market well is very important in pinpointing the right location for your stores,” said Sanz.

Knowing your market also helps in determining the correct product mixes, local store marketing and promotions your franchisees should run. All critical ingredients to the success of your franchise network.

3| Have a structure for location evaluation so you will know the right location

“This can determine the success of your franchise business,” Sanz stressed.

The challenge does not end in identifying and finding the right location. A franchisor also has to secure that location. The business industry is very competitive and prime store locations are easily filled up.

Having a system or mechanism to rigorously evaluate if a location is right for your business is therefore crucial. You can designate an expert locator among your staff or you can set up a team who will be responsible for store location evaluation and acquisition.

“During the pandemic, there were a lot of stores that closed down and this gave an opportunity for other businesses to come in,” Sanz shared.

Though the pandemic has affected those businesses which heavily depended on foot traffic, other businesses that are innovative enough to stay afloat were given the chance to lease the right locations for their franchised businesses.

The importance of store location lies in its capability to affect or determine sales and performance. If your store is located in a busy area where your target market is usually found, then your store will definitely rake in profitable sales.

“We wouldn’t be able to grow this big and last this long if it wasn’t for franchising because it is a very vital part of our operations,” Sanz said. He shared that when Bibingkinitan started in 2006, it became a big hit right away. Through franchising, Bibingkinitan now has 200-plus stores nationwide, with two master franchises in Dubai.

“Francorp has helped us along the way,” he said. “Franchising helped us achieve the scale that we wanted.”

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