By Justine Irish D. Tabile, Reporter
THE Philippine Franchising Association (PFA) said the industry is expected to grow 10% to 13% next year, driven by the food, services and retail segments.
“The 10% is our projection next year and on the high end, we are looking at 13%,” according to Sherill R. Quintana, PFA chair, adding that she hopes the growth rate extends to a five-year timeline.
She delivered her projection at a briefing on Monday ahead of the Franchise Asia Philippines 2023 International Franchise Expo.
Last year, the franchising industry booked P27 billion in revenue, with revenue growth projected at 13% this year.
PFA President Chris Lim said one of the big drivers for industry this year is food, while services are expected to recover next year after having lagged coming out of the pandemic.
“This year, food is what’s been driving it a lot. If you look at all the reports, a lot of the food players are probably higher than pre-pandemic levels. Services in the industry have lagged, like salons and spas. Some of them haven’t even fully opened yet, but we see a lot of them opening and recovering by next year,” he said.
He said that the industry should watch out for agricultural franchising as there is a big push for such businesses in the Philippines.
“We think franchising can serve that sector a lot from the retailers, from those who supply inputs to the franchise or to the agriculture sector, or even servicing,” Mr. Lim said. “We can see a whole ecosystem building that will support this agricultural shift.”
Richard Sanz, overall co-chair of Franchise Asia Philippines 2023 and chief executive officer of BBK Group, said coffee could drive the growth of the industry in the next five to 10 years.
“During the pandemic, we noticed that there were a lot of homebrewers who really specialized or upgraded their coffee experience,” Mr. Sanz said. “When things opened up, there was a void that needed to be filled … driving so many coffee shops to open.”
He said this trend is apparent elsewhere in Asia.
“If you look at Korea and Japan, coffee has been driving a lot of their F&B (food and beverage) markets. The Philippines is, I would say, maybe 10 years behind… but it’s quickly growing and it’s a very big market to fill,” he added.
The international franchise expo is set to run between Oct. 27 and 29, running back-to-back with meetings of the World Franchise Council and Asia-Pacific Franchise Confederation between Oct. 25 and 27.
