The franchising industry is not writing off 2020 just yet with level of optimism rising among players.
But the industry will end the year with 70,000 less outlets due to business uncertainties or about 35 percent of the total 200,000 franchisors today. The industry will close another 20,000 by the first quarter or a total of 90,000 between May 2020 and March 2021, representing 35 percent of the the 200,000
Samie Lim, Philippine Franchise Association (PFA) chairman emeritus in a virtual press conference on Friday said business owners are still hopeful to make some money during the Christnas season to make up for their losses during the quarantine.
Lim said some franchise owners are also taking advantage of the rental subsidy by their landlords until the end of the year abd continue their business. Others are waiting for their lease contracts to expire so they will not be penalized with the forfeiture of their advance and security deposit.
A survey on PFA members conducted at the end of the five-day conference last month showed 72 percent had high to very high optimism before the conference started and shifted to 85 percent high to very high optimism by the end of the conference.
The respondents were asked the degree of their optimism.
Those who answered neutral fell to 37 percent from 53 percent while those who responded as having low degree of optimism dropped signigficantly to 4 percent from 17 percent.
Lim in his speech at the conference noted the the sector will be on its way to another golden age starting 2021 and will peak in 2025.
The group sees increase in the number of potential locations as well as new market and opportunities business opportunities in the new normal
“Franchising remains strong so we only have optimism for the future. Consumers retained their trust in the systems, values and brand promise of their favorite franchised brands compared to stand alone shops, many of which are closing one after the other as many of their owners lacked the support that only a strong franchise system can provide,” Lim said.