Friday, December 12, 2008

Startup Tips Series: Fundamentals of Franchising by Armando Bartolome (Part 1)

Note: This is PART 1 in a series of posts on Start Up Tips: Fundamentals of Franchising by Armando “Butz” Bartolome. The full series is PART 1, PART 2, PART 3, PART 4, PART 5 and PART 6.

Last November 27, 2008, Thursday, Armando “Butz” Bartolome, the President of GMB Franchise Developers and Consultancy Firm, appeared on Bam Aquino’s Start Up show to talk about what he knows best -- “franchising”.

If you want to find out more about franchising here in the Philippines, and get great tips from the Franchi-king himself, Mr. Armando “Butz” Bartolome, you can start reading this post #1.

(START OF INTERVIEW – PART 1)

BAM: Franchising, it’s a, for people who want to be entrepreneurs, usually the first crossroad is, “Do I put up my own business or do I do a franchise?” What would be your tips probably for that crossroad in an entrepreneurs’ life?

BUTZ: Oftentimes it’s normal, when you are really at the crossroads, you really, you know, you want to find out, how do I find out, where do I, where do I start a business? I have this money, where do I go?

I often tell them, “Get the experience by getting a franchise. Because if you really define “franchising,” the real franchising is “Getting into business for yourself but not by yourself.”

Fundamentals of Franchising: Franchising is getting into business for yourself but not by yourself. (Source: Start Up)

You have somebody, like a big brother guiding you. And with all the support and the techniques and the product, that’s the brand. Because one thing with franchising, you get into business that’s proven with a proven success. There’s a model, e.

A, the product is acceptable, the fran, the brand is there, the franchisors actively support the franchisees, and advertising, all the works. So you really plug and play, no. So you minimize the trial and error.

Fundamentals of Franchising: Franchising minimizes the trial and error aspect of a business. (Source: Start Up)

Unlike if you start a business, you have a little bit of capital, but there’s so much trial and error, and with all the competition around, you can’t afford it, even advertising can’t afford it.

So I always say, you want to start, you want to get into business, get into franchising, learn the ropes. Teach and the franchisor will teach you – in terms of management, in terms of marketing your own brand, the product and that will, that will give you the success.

BAM: Ok, then, once you’ve learned the ropes already then you can venture into your own business probably.

BUTZ: Then you can probably venture into another business because you have learned the ropes, ok. You don’t need a PhD for this, ok. And really, a, a lot of people may have this limited money, but really, you want to be on business for yourself, get into franchising.

(END OF INTERVIEW – PART 1)


What we can learn from the interview (part 1):

1. Franchising is getting into business for yourself but not by yourself. This was how Mr. Bartolome defined “real” franchising. True.

It’s like college community work – our instructors have always stressed to us that we (students) should never work for the community; we should work with the community.

Mr. Butz said that you have someone like a “big brother”, (the franchisor) who will guide you in running your franchise, but, take note, they will not run the business for you.

2. Franchising is not really “plug and play”. I think it’s “plug, work and play”. I think that franchising is really not “plug and play” because even if you “plug” (take action, meaning, get a franchise), everything will not be taken cared of for you, it’s not “automatic”. You still have to work to get your franchise off the ground.

Mr. Bartolome will mention, in the later part of the interview, that in franchising: “you get a franchise, the 80% is still your work, the 20% is the brand.” (to which Bam Aquino somewhat disagreed) :-)

3. Franchising minimizes the trial and error aspect of a business.
Running a business can be costly. Starting a business can be “costly-er”.

Mr. Bartolome explained why starting a business (by getting a franchise) can minimize your costs compared to putting up your “very own” business: “one thing with franchising, you get into business that’s proven with a proven success. There’s a model, e.”

He further explained: “Unlike if you start a business, you have a little bit of capital, but there’s so much trial and error, and with all the competition around, you can’t afford it, even advertising can’t afford it.”

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