By IRMA ISIP and RUELLE CASTRO
The franchise industry is seen growing 12 to 15 percent this year with prospects on food and services bouncing back from the pandemic, according to Sherill Quintana, chair of the Philippine Franchise Association (PFA).
Quintana said the franchise industry targets to bring abroad 30 more local brands in addition to the 20 that now have presence overseas.
The target is to bring the number of local brands with international presence to 50 in three years.
As of September 2022, the franchise industry was valued at P150 billion.
Sam Christopher Lim, PFA president, said there are about 800 franchised businesses in the Philippines, making the country the 7th largest in world. These franchises have 2 million direct and indirect workers.
PFA is hosting in Manila the World Franchise Council and the Asia-Pacific Franchise Confederation to the annual Franchise Asia Philippines 2023. The international conference will be held on June 7 and 8 while the International franchise expo will be held in October 27 to 29.
Meanwhile, real estate consultant JLL said foreign retail brands are taking spaces abandoned by local brands in the market.
Brands related to the food and beverage category continue to have the most activity, both in store openings and closings, JLL said.
Janlo de los Reyes, JLL Philippines head of research and strategic consulting, said the retail sector opened a total of 49,800 square meters (sq.m.) of space last year while it closed 22,300 sq.m.
“The retail sector saw more store openings than closings in the last quarter of 2022, with move-ins from several foreign brands,” de los Reyes said.
The holiday surge drove retail store openings in the last quarter of 2022 which carried over to the first month of 2023, he added.
Foreign brands such as Mitsukoshi, Decathlon, No Brand and True Value opened new stores, while brands such as Feta Mediterranean, PaperMoon Café and Levi’s moved out or closed stores, he noted.
The last quarter also saw many local brands across different retail categories move out, JLL said.
Vacancies, meanwhile, dropped to 5.1 percent in the fourth quarter of last year, down 32.8 basis points from 2021. “However, this is still far from pre-pandemic levels of around 3 to 4 percent,” JLL said.
The drop in vacancies resulted in higher rents that now average at P1,705 per sq.m. per month, up 9.3 percent from the previous year.
