Franchise Times’ trip to Philippines is whirlwind couple of days
An aerial view of a suburb of Manila in the Philippines.
Leads were plentiful—and top-notch—and the environment proved franchise friendly. What’s not to like about the latest franchise trade mission to the Philippines?
This time it wasn’t a man-made disaster that endangered a franchise trade mission. Past trade missions, a collaboration of Franchise Times, the International Franchise Association and the U.S. Commercial Service, have had to reassess the feasibility of going to certain countries after a shopping center bombing in Kenya, political unrest in Egypt and a U.S. government shutdown which threatened to send the U.S. Commercial Service specialist leading the mission, Jennifer Loffredo, home from Lagos, Nigeria (where Boko Haram had just days before killed 40 students at a college in northern Nigeria).
Violence in Thailand had some of the planners concerned early on, but once Thailand dropped off the radar, we had clear sailing to the Philippines. Until the typhoon.
The Philippines is Mother Nature’s playground: volcanoes, floods, mudslides, tsunamis, earthquakes, typhoons—the 7,107-island country has them all.
Fortunately for most of the 13 franchise executives who spent almost an entire day in the air to reach Manila, the typhoon had already come and gone. William Edwards of EGS, who represented six of the 14 brands, however, arrived a day early and watched the sideways rain pelt his window in the high-rise Ascott Makati Hotel.
Jeepneys, assembled from jeep and military truck parts, are a popular form of transportation.
Not all the locals had such a safe view. Yna Quiambao, a commercial specialist in the U.S. Commercial Service’s Manila office, said her house had lost all power. She brought all her family’s cell phones to the hotel to charge while working, and her husband took the rechargeable lamps to his workplace to power up for night. It was the first time her 2-year-old had to sleep without air conditioning, she said. Which was no small feat considering the heat and oppressive humidity. She grimaced when she said her mother, who watches her child, was exhausted because no electricity meant no “electronic babysitter,” and she was down on the floor playing with her grandchild without the occasional break to watch movies or play video games.
The only aftershock for the trade mission attendees was we had to skip eating the local food since most of the nearby restaurants didn’t have generators to keep food from spoiling.
This is the sixth trade mission Franchise Times has gone on. Its fate was up in the air because Asia is far to go for a stop in just one city. International franchise execs, however, know how to multi-task, and for most of the attendees, Manila was just one of the stops they made on their quest to populate Asia with their brands.
One of the many things franchise execs want to know about a country they’re expanding into is the state of the supply chain. Being able to import proprietary food items at a reasonable cost and as hassle-free as possible can make or break a deal.
The cold supply chain is starting to develop here, says Aliza Totayo, U.S. Commercial Service officer for the Philippine’s office, but a bigger void, at least in her eyes, are dairy cows. The weather is too hot and humid for the animals’ comfort. As a result, yogurt and cheese are luxury items. So while the rest of the Americans at the U.S. Embassy reception on our first night there were heading for the seafood, she was filling her plate with cheese.
Aliza Totayo, U.S. Commercial Service officer for the Philippines.
Wine, because it needs to be imported, is also expensive. Production of local beer keeps its cost down, and juices are popular. In the grocery store we visited, the aisles were marked with flags to show where the food was imported from. The U.S. had the most flags flying from endcaps.
We were there during the work week and the large, meandering shopping center was always crowded—a respite during the heat of the day and a young people’s hangout at night.
The Filipino palate veers toward the sweet side. As proof of this, homegrown franchise Jollibee sells sweet spaghetti sauce over noodles, alongside hamburgers and fried chicken. French fries aren’t just dipped in tomato ketchup, the preferred condiment is banana ketchup dyed red. The McDonald’s in the mall next to our hotel has a separate counter and dedicated cash register for its dessert offerings.
The longest lines on the day I visited the mall were at Dairy Queen, which means they must have a reliable generator to keep the ice cream frozen.
Traffic, as in all the large cities our trade missions have visited, was congested. Motorbikes were at a minimum. Crowding the streets were Jeepneys, makeshift buses assembled from military jeep and truck parts. They were a bit disconcerting, as if a Jeep Wrangler had mated with a minibus once owned by Elvis. All were a shiny patchwork of creative soldering and graphics—as if someone held a decorating contest and every driver wanted to win.
Riders pile onto the two facing seats or stand on running boards, hanging onto the roof. The back door is left open so people can jump in and out quickly. The cost of the ride is the equivalent of 20 cents and often people need to take two or three Jeepneys to arrive at their final destination, says John Peddar with the Global Franchise Group. Another creative solution to crowded streets was bicycle hooks were placed vertically up walls, rather than the traditional racks on the sidewalk that take up valuable curb space.
Thanks to Mother Nature we were not seeing Manila at its best. Metal frames for oversized billboards along the city streets looked like neglected infrastructure rather than modern commercialism, since the impending typhoon had necessitated taking them down.
Meetings, meeting, meetings
While it’s a valuable add-on to be briefed on the business climate by the experts at the U.S. Embassy, the real reason we’re all there—at least the franchisor reps—is for the long day of one-on-one meetings. This trip had another bonus—attendance at the Franchise Asia Expo.
Each brand had its own room for interviews, rather than being in one big ballroom, with the distractions of hearing the repetitive pitches of their peers and seeing the same person they had just spent 20 minutes talking to sit down at another brand’s table.
Setting up these meetings is the bane of the specialists’ workload when they can’t recruit enough qualified investors for each brand, and a mountaintop experience when the right partners connect. The U.S. Commercial Service in-country specialists are cautious about not over promising—they never want to fail to meet expectations. One way the specialists have found to manage expectations is to invite companies on the trade mission with the caveat that the trip is for exploratory purposes and a certain number of meetings are not guaranteed.
Peddar with Global Franchise Group was one such participant who fell into this category, but he left the trade mission with solid interest from two of the largest franchisee companies in the country.
While past trade missions allowed for more group bonding time, here some participants had evening meetings with prospects.
The final day was reserved for any of us who wanted to attend the Franchise Asia Expo. We were escorted through the event as VIPs, while several photographers snapped our picture every time we stopped at a booth.
One of the leaders of the Philippines franchise community is Samie Lim, the go-to guy for both the history of franchising and the future, since as a licensee of FranCorp Philippines he is helping package and sell upcoming concepts. His connections to the U.S. is also one of the reasons there are so many Certified Franchise Executives in the Philippines.
It’s still too soon to see if the brands on the trip will be successful in the island country. But the work of the trade mission doesn’t stop when the company representatives get on a plane. The U.S. Commercial Service shifts gears and becomes the resource for grand openings, background checks on candidates and multiple other opening functions, says Kristin Houston, a senior international trade specialist in the Irvine, California, office and the mission leader.
For instance, she said, since the U.S. Ambassador to the Philippines mentioned at the opening reception how happy he was to see World of Beer coming there, he just might be asked to be the first one to sip a beer at the franchise’s grand opening.
Open it and they will come—with the full force of the U.S. government in tow.
For more stories, check out FT’s blog.
A look at one man’s international lifestyle
Rogelio Martinez, co-owner of Tutor Doctor, lives in Costa Rica where he plays golf every day, dives as often as he can and spends at least one day a week at the beach. With all that course time, he still considers himself a “weekend golfer,” but he tries to schedule a round of golf wherever his travel schedule takes him. And to date international franchise development has taken him around the world and back several times.
Rogelio Martinez and Sabine Nevermann both worked the booth at the Franchise Asia Expo in the Philippines.
Moving to Costa Rica was a lifestyle choice, he says, but it’s also where his German-born wife wants to live. Their two children attend a German school in the Spanish-speaking country and are fluent in German, English and Spanish. German is their first language.
Martinez speaks five languages. He graduated from the Program on Negotiations at Harvard Law School, the MBA program at University of Montreal, franchise management from Georgetown University, bachelor’s of international business at Monterrey Tech, International Finance at University of Geneva and Project Management at University of Toronto. Perhaps a little overqualified for a tutor, but not for setting up the brand in foreign lands.
His wife, Sabine Nevermann, has joined him as his research assistant. She, too, is overqualified for the job, but the work allows her the flexibility she needs to raise her children. “She’s very good at what she does,” Martinez says. “I just say this is what we need and I know that she’ll do it and have it done on time.” Plus, he adds, “she’s friendly and people like to talk to her,” so she’s a good partner at trade shows.
Nevermann attended an earlier trade mission to the Middle East as a spouse, but also so that she could see in person one of the communities she had helped plan in the UAE while working for her previous company.
Before embarking on the trade mission, Martinez already had a committed franchisee, he just wanted to wait to sign the agreement until Martinez was in-country. Coincidentally, several years earlier, the franchisee had signed a deal for several Outback Steakhouse with another trade mission participant, Donnie Everts of World of Beer, when he was with Outback. This time the multi-concept master was buying a territory for his nephew to develop 30 Tutor Time units.
Coincidences abound on trade missions because the participants’ paths cross often as they crisscross their way across the world. On the trade mission to Sub-Saharan Africa, one of the participants Clive Robinson, the master for Curves for Women in South Africa, was along to help sell that concept in the other two stops on the mission. By the end of the trip (and a few follow-up meetings), he also became the master for Tutor Doctor in South Africa.
It’s a small world—and franchising is making it smaller still.