Franchising in the Philippines

Abstract

The Philippine market offers an innately large consumer base that is attractive for franchise operators. Its strategic location makes the country an appealing option as a franchise hub to launch a future Asia-Pacific expansion. Additional favorable factors include: Wide use of the English language, Cultural affinity with American values, low labor cost, large pool of skilled labor and management talent, and moderately well-placed infrastructure. The competitive climate that exist in the more urbanized locations in the country forces new entrants to creatively innovate and adapt quickly to the environment in order to succeed. Challenges associated with the lingering political instability, weak currency, corruption, and peace-and-order problems in the Philippines are serious issues international franchisors need to face head on. There is no clear indication as to when these challenges will be mended. However, for the more valiant and aggressive franchisors willing to face the current risks in hope of long-term gains, and who are prepared to introduce flexible contractual arrangements, the Philippine market appears to be a unique investment haven. © 2006 Springer Science+Business Media, Inc.