Key Considerations When Opening a Bakeshop Franchise in the Philippines

Key Considerations When Opening a Bakeshop Franchise in the Philippines

October 18, 2018 | maigne

Just like any other business, opening a bakeshop franchise in the Philippines is a huge investment. With many food outlets and stores at almost every turn, you would think that another one won’t get any attention anymore. On the contrary, the newer you are, the better the chances that your business will grow!

In the Philippines, people tend to patronize what’s new over the things that they’ve always had access to. With that being said, opening a bakeshop franchise might just be the next big thing in your town or city! In order to be successful in your venture, you need the combination of a solid mindset, a concrete plan, and a comprehensive financial outline, which is all provided in this article!

A Bakeshop Owner’s Mindset

A Bakeshop Owner’s Mindset

Owning a bakeshop franchise in the Philippines is different from running an ordinary food store. Everything you make is best when it’s fresh out of the oven. As a result, products that aren’t sold on the same day that they were made will be considered obsolete. Because of this, you’ll need to have a solid understanding of what you should do during certain situations.

If you want to find out how to open a bakeshop in the Philippines, you have to keep in mind a few aspects that are important for owning a business in general. Below are three important things that every business owner should at least have basic knowledge about:

Logistics – Take note of the place where your bakeshop will be set up. Decide on a location that can be accessed by around a thousand or more families, or at least an area with heavy foot traffic. If that can’t be achieved put a little more effort into attracting customers by other means!

Another thing to take note of is the competition you might encounter when you set up shop in a certain location. Take note of every bakery, grocery store, and food outlet that have similar products as yours.

Marketing – Identify your unique selling point. Define the key facets of your business that will keep people coming back. Use that to your advantage when trying to attract more customers!

Make sure that you use both traditional and digital efforts when trying to expand your reach. Speaking of which, your digital presence should reflect your brand while showcasing all of your products and embodying your values! When you can, you should also look at your product’s reviews and find ways in which you can improve among those!

Human resources – a bakery is nothing without the employees that run it. In most cases, people would suggest hiring the finest staff possible, but in reality, it this can’t always be done. Rather, you hire the people who are willing to learn — those who are open to new developments and new opportunities.

These people are the easiest and most effective people to train. Your job as the bakeshop owner is to keep them motivated by providing them with the tools they need to succeed! Remember: a motivated staff will always strive to provide quality products and service to your customers!

And finally, every bakeshop owner needs to choose what they will specialize in. Bread is something that is very common all around the Philippines. You’ll see a lot of bakeshop franchises in the Philippines that focus on bread, most of which are even family-owned! Cake shops, while fewer, are definitely more in demand.

Take note that baking a cake and baking bread are two very different processes. And of course, it’s up to you to decide on which one you’ll be focusing on!

Your Bakeshop’s Business Plan

Your Bakeshop’s Business Plan

A key ingredient in creating your bakeshop is, of course, your business plan. Starting with a business plan is important because it’s basically the outline of your whole business. It is a road map that details the goals and objectives of your business, going as far as explaining how you’re going to achieve them. Here’s how you can prepare your own business plan for your bakeshop franchise in the Philippines!

  1. Start with a lean plan. To put it simply, a lean plan is your entire business plan written on one page and it states only the most important details for your business. Most of the time, this lean plan, when polished, is already enough as a guide. However, you can also choose to expand on it, eventually leading into a more detailed business plan.
  2. Identify your “opportunity.” The second section in your business plan (the first part will be discussed last) is the “opportunity” section. Basically, you have to identify what your bakeshop will be selling, and how it will solve a problem for your market. In the context of bakeshops, you’ll be selling baked goods in order to solve the lack of bread, cakes, etc., in the vicinity. It’s up to you to add your own special twist on what you’re selling. You should also research your target market as well as your competition. Sometimes entrepreneurs even create buyer personas i.e. the embodiment of your target market. Take note that the more detailed this section is, the easier all the other parts of your business plan will be!
  3. Plan out your executions. Now that you’ve already identified your main products, you must then explain how it can be turned into a business. In this section, you should discuss a lot about your marketing and sales plan, the procedures for your operations, and of course, how you will be measuring everything in order to see success!
  4. Introduce your team! Great ideas are nothing without a team that can help achieve it. In that regard, you should also include in your business plan the people who will be working with you and the key characteristics that you’re looking for in people you’re going to hire. Aside from the people you’ll be hiring, you should also mention in this section a general overview of your legal structure, the location of your store, and a short history if you’ve already done your business before!
  5. Detail your financial plan. Of course, you need to add a realistic and reasonable financial forecast for your business. Make sure that you include all of your expenses from the start of your business preparations. Afterward, you should also detail how your business will not only break even but also turn in a profit for you and your possible investors!
  6. Write your executive summary. This is a general overview of your business plan and is the first part of the traditional business plan. Write this last so that you already have all the details to make it comprehensive and understandable to whoever will be reading it.
  7. Compile the appendix. If you have any collaterals such as brand logo designs, poster and slogan pegs, letter and memo templates, and digital content, then you should include them all in the appendix. The purpose of the appendix is for you to have a copy of all your collaterals everywhere you go. Some investors take a good look at collateral to determine how your business plan will turn out.

Your business plan is not just a guide, it is also the what entrepreneurs would show investors in order to convince them to help fund the business! Make sure that you always have a copy of your business plan on hand so that any changes can easily be made!

Budgeting and Financial Outlook

Budgeting and Financial Outlook

Every bakeshop franchise in the Philippines has their own financial outline. Some only use the one that is part of their business plan, others add another layer to their finances. Well, of course, every expenditure and investment needs to be recorded in a ledger. But all of that is somewhat technical. Unless you truly want to learn the processes of accounting, we suggest letting an accountant handle your finances, and learn the processes along the way.

Playing around your finances isn’t really easy. Sometimes some expenses are essential in order to push your business to new heights. With that being said, we all know how hard it is to budget everything you want and you need for your bakery, that is why listed below are a few financial tips that should help you as you start out with your new bakeshop business!

Acquire the essential equipment. A bakery would never be able to operate without the right equipment; any business won’t be. Remember that an initial investment is needed to get the highest quality equipment for your business. This is usually a big part of your budget, but there are a few ways to make obtaining the equipment easier! Many financial loans are available for new businesses, but if that’s something you’d like to avoid, then you can try equipment financing! Equipment financing is somewhat like a loan, but is a lot more fluid, depending on the finance agreement that you end up with.

Don’t focus on branding at the start. A lot of businesses jump the gun and brand every little thing that they have. Bags, boxes, plastic cups, you name it, they would have the name and the logo of a business right from the beginning. In reality, this is an impractical thing to do. In essence, all this branding at the start is all just a waste of money. It’s okay for your products to be packaged in generic packaging at first. Let a year or so past first, a lot can happen in that span of time and hopefully, you’ll be able to identify the things that you really need. Once you’ve identified them, then you can start with your branding efforts!

Recognize your break-even point. Every bakeshop franchise in the Philippines starts out small. With that being said, success depends greatly on getting sales that surpass your break even points based on your fixed expenses. Somewhat challenging for new people industry, you have to make sure that both the fixed and variable expenses won’t overwhelm your sales.

Embrace credit cards! More of a sales tip than a budgeting tip, but in general, letting customers know that they can make use of their credit card is an effective strategy to maximize sales! Most people with credit cards tend to use it a lot, and it helps to maximize the purchases as well! Let customers know that you accept credit cards and see just how much it can help your business profit!

Legality of Franchising in the Philippines

Legality of Franchising in the Philippines

An essential part of any business starting up is procuring the legal documents required. Thankfully, the legal process of starting up a business in the Philippines is relatively well-known. Apart from the articles found on the website of the Department of Trade and Industry, there are other more helpful articles regarding starting up your business!

When it comes to franchising, however, there are fewer sources available — hence, the point to be discussed in this section, particularly the legal processes needed in setting up a bakeshop franchise in the Philippines.

In the Philippines, single unit franchising has always been very common, but lately, an increasing number of franchisors are becoming interested in a more large-scale, multi-unit franchising formats such as development agreements and master franchising agreements. Aside from that, local franchising has begun to explore conversion franchising—a case when an independent store owner in a similar business converts his store into a franchise, and passive franchising—a case where the franchisee is interested in providing capital but not in the managing of the franchise.

Another important thing to take note of is the fact there is no special law in the Philippines about regulating franchising. With that being said, many international franchisors choose to enter the Philippine market through joint ventures and master franchising agreements. A key reason why foreign companies do this is that the Law prohibits a foreign national and corporation from owning land in the Philippines and from entering into specific sectors of the market.

Take note that franchise agreements are categorized as technology transfer agreements or TTAs. In 2010, DTI released a non-binding advisory under Bureau Order No. 10-24 Series of 2010. Under this advisory, a franchise agreement is defined as:

“A written contract or agreement between two or more parties by which a franchisor grants the franchisee the right to engage in the business of offering, selling, or distributing goods or services under a marketing plan, system or concept, for a certain consideration. Unless otherwise provided, this includes the use of a trademark, service mark, trade name/ business name, know-how, logo-type advertising, or other commercial symbols associated with a particular business.”

Keep this in mind when you plan on the path of setting up an international bakeshop franchise in the Philippines!

Own a Bakeshop Franchise in the Philippines with Original Cake!

If you find that spreading happiness through the best sweets and the best cakes in Manila is your calling, then contact Original Cake now for a huge franchising opportunity!

Original Cake is a Taiwanese Cake Outlet that sells simple yet extraordinarily delicious cakes made with lots of love and the simplest of ingredients!

Over the years, Original Cake has expanded to three South East Asian Countries and is still looking to expand their reach to the West, and the rest of SEA, particularly here in the Philippines!

If you’re interested in franchising Original Cake, visit our website for more information!