The Philippine Franchise Association (PFA) is optimistic that the franchising industry would recover next year from the economic impact of coronavirus disease 2019 (Covid-19) pandemic.
In a briefing on Friday, PFA founder and Chairman Emeritus Samie Lim said the global contagion likely shaved the number of franchisees in the country by more than half this year.
“The franchising industry recorded some 200,000 franchisees in 2019. When the dusts from the pandemic settle sometime in 2021, I believe we will have only about 111,000 franchisees left standing,” he said.
Despite this, Lim said the industry could achieve a “golden age“ by 2025 if players would start rebuilding their businesses next year by repackaging their product or service offerings, rethinking their communication strategies, refinancing, and reaching out to new partners.
“By 2021, we should accelerate aggressively our expansion plans, taking advantage of an unprecedented number of potential franchisees, the good available locations all over the country, and the good pool of available management talent,” he added.
According to him, franchises that caters to health and beauty are likely to prosper next year.
PFA Chairman Richard Sanz said that before the pandemic, the industry’s contribution to the country’s gross domestic product was about 7.8 percent.
But this would change this year, he added, as results of a survey — conducted when most of the country was under enhanced community quarantine — showed that almost half of respondents from the industry displaced 60 percent of their employees.
The survey also revealed that two-thirds of the respondents have only cash reserves enough for one year, and the remaining 30 percent have cash reserves of more than one year.
They also need P1 million to P20 million to normalize their operations after the enhanced community quarantine and its modified form were imposed from mid-March to end-May, which, according to Sanz, is one of the challenges of restarting a business.
In this regard, he said small businesses needed government support through tax incentives and a longer debt moratorium.
“Having said all of these, my key takeaway is with the right support, the Philippine franchising sector can recover faster to continue its role as a creator of businesses and jobs,” Sanz said.
“What I’m seeing is that optimism is being driven by the franchising sector. So we are hoping that we will have a strong bounce back after this,” he added.
PFA President Sherill Quintana said that, as the franchising industry was responsible for at least 2 million jobs in the country, it was important to be prepared to cope with the pandemic’s impact.
“We need to close our ranks and rally optimism [in] the sector for both the franchisees and the franchisors, as well as our suppliers in the supply chain,” she added.
Quintana also said optimism in the industry was at a record high, as a recent survey showed that 72 percent of the respondents had a positive outlook with their respective businesses going foward.
“As you can see, everyone is really optimistic looking forward… We can only say that we are now beyond surviving [and are] looking forward to thriving in the franchising sector,” she added.
This is story is originally published by the Manila Times, to view the original post please visit https://www.manilatimes.net/2020/10/04/business/sunday-business/franchise-group-recovery-in-2021-golden-age-by-2025/775793/