Professional Documents
Culture Documents
Nina Carlos
Karissa Cruz
Noel De la Paz
Bianca Pamen
FRANMAN K33
SECTION 5. REFERENCES......................................................................................... 18
SECTION 1. INTRODUCTION
In the recent years, entrepreneurs have been sprouting out in various industries
and taking over different kinds of markets as they develop and introduce the most unique
products and services yet. Businessmen and entrepreneurs use different types business
strategies in order to gain profit and acquire a high level of market shares. Others opt to
start their own businesses; others continue the family business and; others choose to
franchise.
Franchising is a strategic alliance among business people, who share the common
goal of dominating a certain market. It is a strategy for gaining loyal customers by
consistently providing them products and services of good quality. Franchising is based
on an agreement in which the franchisor provides the privilege to utilize their business
system to a franchisee. A Franchise Agreement is the binding document between the
players, which serves as the legal document that states the obligations of both franchisor
and franchisee.
There are two main players in franchising- the franchisor and the franchisee.
Franchisors are those who grant the franchisee the right to use a developed concept,
including trademarks and corporate identity for a certain period of time. The franchisor is
1
also responsible for providing the best operating system possible in order to make the
business thrive in a competitive market. On the other hand, a franchisee is responsible for
providing time, capital, and desire to utilize the brand and services provided by the
franchisor. A franchisee is expected to utilize someone else’s expertise and experience,
and maximize them in order to produce quality outputs, which is consistent with the
franchisor’s products and services. To have a clearer understanding of the players in
franchising, the table below summarizes their roles in a franchise which is from the
International Franchise Association.
Franchisor Franchisee
2
1.3.1 Advantages
High rate of success. Franchising involves tried and tested business models. Thus,
entrepreneurs who decide to buy and operate franchises are exposed to lower calculated
risks. This makes it better than starting up new businesses from scratch, which usually
comes with greater risks.
Effective operating and management practices. Most of the time, franchisors have
already discovered and perfected processes and efficiencies that are passed on to
franchisees. Thus, franchisees could either be guided to overcome lack of business
experience or be trained in polishing acquired business sense.
Established brand. The entrepreneur doesn’t have to worry about establishing the brand
to make it a household name. The strength of the chosen brand of franchise would be
enough to entice customers and guarantee success.
Easy options for recapitalization. Franchisees can ride on the outstanding reputation of
the brand or franchisor. This way, they could easily apply for and obtain approvals for
loans from financial institutions or banks. A reputable franchise is already an
appreciating asset on its own. It can be resold or liquidated any time, making it attractive
for lenders.
Greater profit. It is possible to incur lower costs on materials and supplies through the
help of the franchisor. If sales reach or exceed targets, the franchisee will surely enjoy
greater profits. This makes franchising an easier ticket to business success.
3
Franchisors imposing control. Some franchisors require their franchisees to religiously
follow their prescribed system or processes. You may eventually find adhering to such
degree of control as difficult and restricting.
Possible conflict with franchisor. It is not uncommon for a possible conflict to arise
between a franchisor and a franchisee. In some cases, the franchisee thinks that a
franchisor is being unreasonable and is squeezing too much for profits. Moreover, some
franchisors may think that franchisees are getting too lax when adhering to the franchise
contract.
No specific law for franchising in the Philippines. Currently, a law covering franchising
in the country is yet to be filed and implemented. However, all parties involved are
expected to abide by the provisions of the Civil Code as well as the Intellectual Property
Code. The franchising contract can contain odd stipulations as long as those don’t fall
into conflict with existing laws, morals, national security, and public policies.
4
1.5 What makes a franchise a success?
Having the Right Business Model- having and passing a great and clear business
model will set a franchise’s success and consistency. Franchise pioneer
McDonald’s, for instance, delivers customers a quick, convenient and inexpensive
meal, compared to traditional restaurants. Another examples is what KFC offers-
the same meal attributes but with a different menu.
Scale- the proper production scales are implemented within each franchise. With a
proper scale, the business won’t have loss and their sales assumptions will not be
undermet.
Scope- the scope of their market is not limited. A franchise has to have a wide
scope and at the same time, effective.
Location- the benefits associated with occupying primary location sites for
franchise stores. A good location for each franchise would be at an advantage into
reaching all target and future markets. Location is also important especially if the
certain franchise is offering convenience or lounging.
Market Saturation- the degree of market penetration. The lower the degree of
penetration, the higher the room for the company to grow by opening new stores.
5
1.6 Objectives
The Almario Family – Chona Aquino, Cynthia Almario, Ivy Almario, Pacita
Almario, Bobby Almario, Louie Almario and Cecile Modolo started Relish in 2009.
After observing the dying restaurant in Ponte, Makati, one of the Almario sisters took
advantage of the opportunity to establish a new restaurant, later called Relish at Ponte.
The different aspects of the business are distributed among the owners. Interior designers
Ivy and Cynthia Almario created the design of the restaurant, while the other siblings are
responsible for operations management, supplier relationship, client relationship, and of
course, finances. All restaurant specialties come from the household of the owners. The
siblings put together all their specialties in creating the menu of Relish. At the beginning,
they only had 7 main dishes, until customers demanded for more entrées. In 2012, the
6
Almario family put up their second branch in Scout Limbaga, Quezon City called Relish:
Hello Happiness.
Relish at Ponte and Relish: Hello Happiness serves cross-continental food based
on specialties of the Almario family. The family business provides a fine dining
experience at an affordable price. In 2011, Relish started to provide catering services to
small events, as well as large events with up to 600 guests.
Relish has two company-owned branches. The main branch is located in Salcedo
Village, Makati (Relish at Ponte) and, the second branch, which opened in 2012, is
located in Scout Limbaga, Quezon City (Relish: Hello Happiness). The strategic
locations of Relish are key factors to the company’s success in the food industry. Relish
is among the market leaders, and continues to compete with confidence with other
restaurants such as Apartment 1B and Bugsy’s Bar and Bistro.
The branches and locations of Relish is one of the determinants of the target
markets of Relish. Relish aims to provide its products and services to young
professionals, singles, and couples who belong to the upper class C to class B market.
Since Relish is located in the metropolitan area, it is unproblematic for the business to
reach its target market.
7
SECTION 3. FRANCHISE TEST
Legal Documents. To be legally entitled to sell franchises, the franchisor will need
guidance on developing a franchise agreement and a FDD (Franchise Disclosure
8
Document), and will need to file with appropriate state authorities on a national
basis, and other needed documents for the business.
Franchise Marketing Plans. A company will also need to sell franchises which
will require a specific marketing plan designed to get the franchisor’s message to
the targeted franchise prospect.
Franchise Marketing Tools. Once the prospect has been identified, the franchisor
will also require marketing tools to assist it in the sale of franchises.
Franchise Sales Training. The franchisor will need to understand the nuances of
the sales process and the legal constraints of franchise sales.
According to iFranchise Group, there are twelve (12) criteria that will serve as a
business’ indicator of being a successful franchisor and all are listed below.
9
services, a reduced investment cost, an inimitable marketing strategy and a diverse
market are indicators of differentiation.
10
Affordability. Affordability reflects a franchisee’s ability to pay. In order to catch the
attention of investors, a business must be affordable. Charging too high of an
investment cost will drive potential franchisees away, especially if the business is
franchising for the first time.
11
Commitment to relationships. A healthy relationship between the franchisor and
franchisee makes a strong market status. Businesses must focus on building long-term
relationships in order to effectively sell their product despite changing consumer
demands. A strong franchisor-franchisee relationship motivates the franchisees to
provide products and services to the customers, consistent to that of the franchisor.
In this section, the researchers will analyze the eligibility of Relish to franchise.
Using the 12 criteria of franchisability, they will evaluate which ones are met by the
business.
Credibility. Relish has two branches, one in Makati City and another in Quezon
City. Both branches are located in the metropolitan area; thus, the target markets
are reached, and consumers are well aware of the brand. The founders and owners
of Relish started their operations in 2009, making them active in the restaurant
industry for almost five years now. Relish has been featured in various
publications, as well as in the television show, Kris TV, in May 2014. According to
one of the owners, a lot of new customers dined in Relish to try the panna cotta,
after Kris Aquino stated that it was “the best panna cotta she has ever eaten”. All of
the stated facts are testimonies to the credibility of Relish. However, the most
prominent reflector of credibility relies on the strength of the management. The
12
operations manager is Ms. Chona Almario-Aquino. Being one of the co-owners of
Relish, she is specifically tasked on ensuring the smooth flow of operations in both
branches of Relish. The main branch has 2 managers, whom are also part of the
Almario family; and the Quezon City branch has 1 manager, recruited by one of the
co-owners of the business. Since the family is very hands on with managing the
restaurant, management strength is high; thus, it reinforces Relish’s credibility as a
business.
Differentiation. As what Paolo Aquino said in the interview, the secret of Relish is
that their restaurant was started, and is still being run by their family. Yes, there are
a lot of other restaurants that are like this but most of them just started as this. Most
of these kinds of restaurants are being forgotten once the family that owns it sees
that their business is already stable. The concept that Relish is trying share is the
experience you get when you eat at someone’s home. The food is prepared by the
family, and the restaurant is being run by the family. They are not trying to
replicate the home-cooked meals you get at your house, but rather they are just
trying to share the home-cooked meals being served in their house. As what
Spot.ph said in their review, “It’s like eating in the house of a friend that really
cooks well” their food are not tweaked or infused to suit the costumers’ taste, but
are served as their family would have it. There are even instances when some of the
family members would go to the restaurant to play their musical instruments.
13
Adaptability. Relish accentuates its goal of making the customers feel like they are
a part of the family through their family-inspired food. Just like many Filipino
families, Relish sets its eyes on providing products of high quality, at affordable
prices. This affordable, fine dining experience with the family concept is easily
adaptable to the market, since the Filipinos have always been known for their
hospitality and care for their families. Thus, Relish will be able to attract consumers
even outside their target markets.
14
Affordability. The materials and ingredients used in the Relish restaurants are not
too expensive; hence, possible franchisees can afford to franchise this. Even if their
materials are not the most expensive, they make sure that the materials and
ingredients they would use are still of good quality. This is further proven by their
change of suppliers due to cost cutting. Since the restaurant is making sure that they
don’t spend too much on business expenses, this shows that possible franchisees
would not need to worry on having a big amount of expenses.
Market trends and Conditions. In the Philippines, we can say that we Filipinos
have a way of liking the own comforts of a ‘home-cooked’ meal, as we call it,
‘lutong-bahay’. We enjoy food that reminds us of a place and time, and this is what
Relish also offers. In today’s restaurant food business, good and presentable meals
are innovated along with how much heart is put into one meal. Relish offer’s these
but at the same time, having a competitive edge by what they offer. In their existing
branches, there have been four relevant reviews that appear in top comment/review
website: zomato.com, spot.ph, muchpunch.com and tripadvisor.com. In average,
their reviews give a four over five. In their munchpunch page, people post their
cravings and reviews- with an average of then a month and with a trend for over
522 ‘crave’ on their page. As for Relish’ competitive edge, they not only serve
unique ‘home-cooked’ and family inspired meals but also offering a fine dining
twist at an affordable price. This can serve as a good opportunity into their target
15
market of top class C and above. With their restaurant ambiance and affordable fine
dining prices, Relish would be a place of comfort and people would rather choose
this compared to the busier parts especially the Makati City area.
Strength of management. All aspects of the business are distributed among the
owners of Relish. Since the owners are part of the same family, communication is
constant and effective. When problems arise, the Almario family resolves them as
soon as possible, and even calls a board meeting if necessary. Since the family is
very hands on with the operations, all owners are knowledgeable with the different
16
aspects of the business. This strength possessed by the managers is a key indicator
of a successful franchisor.
SECTION 4. CONCLUSION
Although there are already countless restaurants in today’s market there is still a
need to franchise and further expand because what Relish offers cannot be found
everywhere. In today’s market, there are a lot of international cuisines being offered
everywhere, and most Filipinos would be curious enough to try them out. But no matter
how much we love these international cuisines, we Filipinos still go back to the taste that
we grew up with and are used to. Not just the Filipino cuisines that is being offered
everywhere, but the family-inspired home-cooked meals we are used to. Yes, there are a
lot of these around but as mentioned before, what makes Relish different is that the
Almario family aren’t trying to replicate the food you eat at home; they are not trying to
be your kitchen away from home, but rather they are offering to you their own kitchen-
the kitchen that the Almario family are using. They are just sharing their home-cooked
meals to you. What they are simply trying to do is to bring you to their home and let you
eat their food. There are not a lot of these kinds of restaurants out there, this concept can
17
really be interesting to the people because we all have experienced this, going to a
friend’s home and eating their food and loving it. This experience that they are trying to
replicate is quite rare in the market. And since they have proven that their “home food” is
loved by many, this can really be wanted by a lot in the market.
SECTION 5. REFERENCES
Bibby, N. (n.d.). Doing a Franchise Feasibility Study. All Business. Retrieved August 9,
2014, from http://www.allbusiness.com/buying-exiting-
businesses/franchising/4353430-1.html
Criteria for Franchisability | iFranchise Group. (n.d.). Criteria for Franchisability |
iFranchise Group. Retrieved August 7, 2014, from
http://www.ifranchisegroup.com/franchise-your-business/criteria-for-
franchisability/
Definition of Franchising. (n.d.). , Franchisor and Franchisee. Retrieved August 9, 2014,
from http://www.franchoice.com/franchise-information-guide/what-is-
franchise/definition-of-franchising
Franchise Feasibility Studies Law & Legal Definition. (n.d.). Franchise Feasibility
Studies Law & Legal Definition. Retrieved August 9, 2014, from
http://definitions.uslegal.com/f/franchise-feasibility-studies/
Franchising Philippines: Advantage and Disadvantage of Franchising. (October 2006),
Retrieved from http://www.franphil.com/advantage-and-disadvantage-of-
franchising/
Gappa, B. (n.d.). What Is Franchising?. Franchising.com. Retrieved August 9, 2014,
from http://www.franchising.com/articles/what_is_franchising.html
Humarang, J. (January 2014) Advantages and Challenges of Franchising. Retrieved
August 9, 2014 from Entrepreneur Philippines:
http://www.entrepreneur.com.ph/franchising/
Lara, T. (2014, June 12). A restaurant that makes you say, 'Hello, Happiness!'.
philstar.com. Retrieved August 11, 2014, from http://www.philstar.com/food-and-
leisure/2014/06/12/1333706/restaurant-makes-you-say-hello-happiness
18
Mercado, C. (2010, October 13). Food Review: Relish at Ponte. spot.ph. Retrieved
August 13, 2014 from http://www.spot.ph/eatdrink/46707/food-review-relish-at-
ponte/
Mourdoukoutas, P. (October 2013). 5 Things That Make A Franchise Successful.
Retrieved August 9, 2014, from
http://www.forbes.com/sites/panosmourdoukoutas/2013/10/04/5-things-that-
make-a-franchise-successful/
What is a franchise? (n.d.). Retrieved August 11, 2014 from
http://www.franchise.org/franchiseesecondary.aspx?id=52625
Which Makati resto paid P17-M in taxes in 2011? (21 August 2011). Retrieved August
12, 2014 from http://www.abs-cbnnews.com/business/08/21/13/which-makati-
resto-paid-p17-m-taxes-2011
19