#rdrtalks | Bakit Hindi at Dapat mag Franchise?

Summary

The video script is an in-depth discussion on the franchising industry, focusing on the importance of due diligence when considering a franchise opportunity. Business CEO Boss Eric of TNC Boss emphasizes the need to verify a business's legitimacy through proper registration, financials, and a clear business model. He discusses the significance of a franchise manual, agreement, and the concept of proof of concept. The conversation also touches on the challenges of the pandemic's impact on businesses and the strategies TNC has adopted to remain profitable, including diversifying into food services. The script concludes with an invitation for interested individuals to inquire about franchising opportunities with TNC, highlighting the brand's 17-year history and the potential for passive income.

Takeaways

• 😀 The franchising industry is significant and growing in the Philippines, with many businesses exploring this model.
• 💼 To start a legitimate franchising business, it's crucial to have a registered business with the Securities and Exchange Commission (SEC) and a Department of Trade and Industry (DTI) permit.
• 📈 Financials are a key consideration for potential franchisees, as they indicate the profitability of the business model.
• 🏢 A company-owned store is essential as it provides proof of concept and demonstrates the business's ability to operate profitably.
• 📑 Documentation, including a franchise manual and franchise agreement, is vital for outlining the terms and operations of the franchise.
• 🔍 Due diligence is essential for potential franchisees to verify the legitimacy and profitability of the franchise opportunity.
• 🏫 The importance of location and demographics in franchising cannot be overstated, as they significantly impact the success of the business.
• 🌐 Online visibility is important, but physical location and community-based business models are also crucial for certain types of franchises.
• 🛠️ A successful franchise provides a system and operational support to minimize the chances of failure and increase the likelihood of profitability.
• 💰 The inclusions in a franchise package are essential to review, as they eliminate common business mistakes and provide a proven business model.
• 📈 The services industry is highlighted as a booming sector for franchising, with high profit margins and less reliance on physical products.

Q & A

What are the key considerations when starting a legitimate franchising business?

The key considerations include financials to check the profitability, ensuring the business is registered with the appropriate authorities like the SEC or DTI, having a business permit, a franchise manual, and a franchise agreement.

Why is documentation important in franchising?

Documentation is crucial as it includes the franchise manual and agreement which outline the terms and operations, providing a basis for understanding the franchise's offerings and ensuring clarity and legal protection for both parties.

What does the franchise manual typically contain?

The franchise manual typically contains the context of the franchise's operations, serving as a guide for franchisees on how to run the business according to the franchisor's standards.

How can one verify the profitability of a franchise business?

One can verify profitability by examining the financial documents provided by the franchisor, which may include statements showing the current status and earnings of existing stores.

What is the significance of having a company-owned store in franchising?

A company-owned store is significant as it serves as a proof of concept, demonstrating the business model's viability and profitability, which is essential for attracting and reassuring potential franchisees.

Why is due diligence important for potential franchisees?

Due diligence is important for potential franchisees to avoid being deceived and to ensure they are making an informed investment. It involves verifying the franchisor's claims, financials, and business operations.

What is the role of demographics in choosing a location for a franchise?

Demographics play a crucial role as they help determine the target market's spending power and preferences, which are essential for the success of community-based businesses like franchises.

How does the franchisor ensure that franchisees follow the agreed guidelines?

The franchisor ensures adherence to guidelines through a franchise agreement that outlines penalties for non-compliance, including possible removal of signage and termination of the agreement.

What are the benefits of investing in a services business as a franchise?

Investing in a services business as a franchise can be beneficial due to the high profit margins and the lack of physical inventory, which reduces the risk associated with product spoilage or obsolescence.

How does TNC, as a franchising business, adapt to changes like the pandemic?

TNC adapts to changes by reassessing community acceptance, learning from the situation, and adjusting the business model accordingly. For instance, during the pandemic, TNC re-evaluated its concept to ensure it aligns with the new normal.

What is the minimum investment required to start a TNC franchise?

The minimum investment required for a TNC franchise is PHP 5 million, which includes the cost of setting up the business, such as the computers and other necessary equipment.

How does TNC support its franchisees in terms of transparency and management?

TNC supports its franchisees by providing transparency through access to live income reports and CCTV feeds, and by managing the business operations to ensure profitability and efficient use of resources.