Monday, December 15, 2008

Startup Tips Series: Fundamentals of Franchising by Armando Bartolome (Part 6)

Subtitle: One thing to look for in a brand – its potential for growth

Note: This is PART 6 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.

PART 6, Mr. Bartolome talked about looking first at one brand’s potential before getting a franchise. Here’s PART 6 of Bam Aquino’s interview with Mr. Armando Bartolome:


BAM: Would you always go for the name brands first, I mean, would you go for the Jollibees, and you know, all these big names first before the smaller stalls, or really depends on the franchise also?

BUTZ: You know, you just have to look at the potential of the brand. I’ve seen a brand, like from Iloilo that was nowhere, it was not even known, and now is really in Metro Manila and the provinces, and it’s reaching a hundred stores.

BAM: So there’s that investment component talaga, no. you have to look at the potential of this franchise because you’re getting in cheap, basically, if it has a large potential.

BUTZ: Because in franchising, when you get it (at) this amount, that amount will appreciate, e. it’s more than a stock market, because as the franchisor and the franchisee work together, and I call it synergy, the brand appreciates. So (you) may get it at this amount but the newcomers will get it at that amount. So if you’re this original franchisee, you see the appreciation.

BAM: Can you sell, can you sell your franchise to another person? Is that possible?

BUTZ: Well, the first thing, the first option is, if you want to quit, and that’s written in the franchise agreement, the first thing is, the franchisor has the right, you know, you can offer it, you have to offer it, the right of (first?) refusal. But if the franchisor says, “No, I don’t have the time or the money,” um, then you can opt to get another applicant based on the qualification of the franchise.

BAM: And sell your franchise.

BUTZ: Yes.

BAM: So in that case, it’s really is, an investment.

BUTZ: You can, you can still bailout, you can bailout. Well the common word “bailout”. (laughs)

Check the franchise agreement for the rules of termination. (Source: Start Up)


Things to remember…

1. Look at the potential of the brand, not how big the name is. Yes, I know, big brands can be pretty tempting, especially if you have the money. But it’s not always about how big a brand is. Entrepreneurs can see the potential of everything, they are visionaries, you see. Don’t consider only the big brands. Everything has potential when seen through the eyes of an entrepreneur. :-)

2. The value of one brand appreciates over time. Important keywords here are patience, self-discipline and hardwork. Stick to your goals. You and your brand will get there, eventually.

3. Check the franchise agreement for the rules of termination. When I was still in college, our instructors would usually tell us: “When in doubt, ask.”

In business, particularly in franchising, when you’re in doubt, you can always do two (or more) things – ask or read the franchise agreement. You’ll get in trouble if you think that the “Real men don’t read the manual” mantra also applies in business. :-)

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