Pros and Cons of Franchising a Bakeshop in the Philippines

Pros and Cons of Franchising a Bakeshop in the Philippines

What are the Pros and Cons of Franchising a Bakeshop in the Philippines?

  • Pros:
    • High success rate
    • Support from the franchise
    • Great source of income
  • Cons:
    • Every decision must come from the management
    • Competitions arise
    • Lack of control

 

Business-minded individuals will always think of ways on how they can invest. A few of them would consider opening a franchise, which is often seen as a low-risk way of starting a business. These people like this option because of the benefits it can offer them. Admittedly, this kind of business venture also has some drawbacks that you need to be mindful of.

In this article, we shall be discussing the pros and cons of deciding to open a bakeshop franchise in the Philippines. If you are interested to learn more, then keep on reading.

 

Pros

There are many advantages to franchising a business in the country, especially if you are going to franchise the shop for people to buy the best cakes in the Philippines. We listed down some examples below.

High Success Rate

When you buy a franchise, you are buying an established concept that has a successful history. A recognizable and trusted brand is a key element to business success. Research shows that franchisees have a better chance of success compared to the people who run independent businesses.

If you think about it, building a reputable brand takes a lot of money; it may also take years of hard work before you reach the success you want. By partnering with a well-known franchisor, you are somewhat taking a shortcut. Your target customers will instantly recognize your brand, which means you don’t have to do any extra effort to get your name out there.

Support from the Franchise

Once you take up your franchise, your franchisor won’t simply leave you on your own without having any word of advice from them. You will get a lot of help in starting up the franchise as well as running it afterwards.

Essentially, your franchisor will provide you with the equipment, supplies, instructions, and training that is needed for you to run the business. The training that will help you manage and market your franchise will also be included in the package they will supply to you.

Your franchisor wants you to succeed so they will do what they can to help you get to there.

Great Source of Income

Those who are interested in this business venture must pay a fee to their franchisor. They would ask you to shell out some cash to start your business. However, you should be able to get this money back (and more) after you have established it properly.

With a franchise, you will have a great source of income every month. Plus, you can have other privileges from your franchisor; examples of these are discounts and access to lower inventory prices.

In addition, the collecting buying power of a franchise group allows you to purchase ingredients and equipment at a lower cost compared to independent businesses, which usually have less bargaining power with the suppliers.

Cons

Of course, running this business venture also comes with risks and disadvantages. Let’s discuss some of them below.

Decisions must come from the Management

The main disadvantage of buying a franchise is that you must follow the rules and guidelines of the franchisor. Some franchisees need to report the financial information and updates to the head company. It’s a lot harder to innovate with franchising than if you own business outlets. Even if you came up with a new idea, you have to negotiate with your franchisors to get them to accept of your suggestions of new products and strategies instead of putting the new idea in place of your own.

The great thing about this, however, is that you won’t end up with making difficult decisions. You also wouldn’t worry about running the entire business, which is great for those who have other things to manage.

Competitions Arise

While investing in a well-known franchise is pretty easy, you should still be mindful that your business is not the only who offers certain products and services to the consumers. Franchises are everywhere and they have taken over shopping malls and neighborhood plazas, which means they could be everywhere.

There’s little you can do about your competitions. But you can definitely look for a great location that is easily accessible to your customers. Additionally, franchising a shop where they can buy the best cakes in the Philippines will instantly entice them to purchase from your product selection.

Lack of Control

The lack of actual control you have over your franchisor means that even if you run a successful brand, you still need to conform to the uniform operating procedures. In fact, you might need to sign a contract where the things you can and cannot do will be indicated, preventing you to have some creative freedom.

These restrictions may be disheartening for those who have so many ideas they’d like to try out. But remember, you can always voice out your concerns and suggestions to the head company. The things you shared will then be put into careful consideration—which is probably best since it won’t just affect your business venture, but others’ as well.

 

Key Takeaway

Many people are thinking of getting into a business venture that will provide them with many benefits. Investing in a franchise is certainly a great option for them to choose; some are even looking up information on how they can open a bakeshop franchise in the Philippines. Just remember to do your homework and learn not only the pros but also the cons of franchising. This should give you more information on how to successfully run your business.


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