Business Opportunity: Viability of Food Franchising or Independent Food Business

in Poblacion, Cataingan, Masbate for 2019-2020

Proponents:

Banda, Jean Claudia P.

Moradas, Clint Joel A.

Ty, Georgia A.

Son, Kyla Angelique B.

Almario, Danilie A.

Labao, Joyce A.

Atendido, Jemma B.

School:

Cataingan National High School

 CHAPTER 1: INTRODUCTION

Background of the Problem:

As years go by, more business opportunities are established to provide people’s daily

needs as well as their wants. With the rapid growth of businesses, especially in food businesses,

viability of food franchising and independent food business is one of the growing concern of the

people.

Food franchise generally involves the owner of a business, known as the franchisor and a

person who has been granted a franchise, known as the franchisee to operate a business or

distribute goods and services. “Planning or buying a franchise can be so expensive though you

need large money as your capital to open such a business like that. And also the primary reason

why most entrepreneurs turn to franchising that it allows them to expand without risk of debt or

the cost of equity and it allows companies to grow using resources of others.” (Sarah Stowe,

2015)

According to Susan Ward, food franchise involves advantages like low failure rate,

business assistance, buying power, star power, and profits and disadvantages such as rules and

guidelines, ongoing costs, ongoing support, cost, and risk.

While opening your own business on the other hand can be either a sole proprietorship,

partnership, etc. This involves many consideration, such as financing, location, theme, and

staffing to give your business the best chances for success. “Opening your own business is a full

time job commitment with extra overtime. It means you will be at work a majority of the time,

especially in the beginning.” (Lorri Mealey,2019)

 According to Kimberlee Leonard, opening your own food business involves advantages

such as financial rewards, lifestyle independence, personal satisfaction and growth and

disadvantages like financial risk, stress and health issues, and time commitment.

Most of us live in a free market economy and there are many different factors which

determine how we choose to perform such as business (Analysis of opening a Franchise versus

an Independent Retail Food Business, 2010)

Many people fantasize about self-employment and a business of their own. At some

point, many did not make it into reality because they don’t really know the risks involved.

(Business Viability: A Comparison between Franchises and Independent Business)

The fundamental reason of this research is to guide the entrepreneurs in determining what

business opportunity specifically the Food Franchising or Independent Food Business is suitable

in the area.
Conceptual Framework

Business Viability

Food Independent
Franchising Food Business

Bases of
Comparison

Challenges Opportunities Profitability

Start-Up Start-Up ROE

Business Business Estimated Net

Operation Operation Income
Challenges

Every business has its own challenges during start-up and business operation. These

challenges are the risks that may put a business down or inefficient if not acted upon. So,

identifying these will trigger concern to protect the viability of a business.         

Opportunities

Opportunity is a great advantage if encountered during start-up and business operation. It

helps a business to be profitable and succeed in the industry.

Profitability

Profitability measures the success of the business operation through gain in money which

increases the viability of a business in a long-term run.

 ROE

        Return on Equity is a financial analysis used among all others to achieve a more accurate

return of income because it will focus on the income per equity or capital invested.

 Estimated Monthly Income

         To know the amount of peso on the ROE possible for a business to have in every month, an

estimated net income is to be gathered.

Research Hypotheses

Alternative Hypotheses

1. There is a significant difference between the viability of food franchising and independent

business.

       A. Food franchising is more viable in Cataingan for a large range of challenges are less

likely to happen, there are more oppurtunities, and the return of income is higher than that of

independent food business.

       B. Independent food business is more viable in Cataingan for a large range of challenges are

less likely to happen, there are more oppurtunities, and the return of income is higher than that of

franchising food.

Null Hypotheses

2. There is no significant difference between the viability of food franchising and independent

food business.
Statement of the Problem

The purpose of the study is to compare franchising from independent business in order to

determine the best way to put up a food business in Poblacion,Cataingan,Masbate year 2019-

2020. The purpose of this study is to answer the following questions:

i) What are the percentages the respondents usually encounter based on

What is the ROE and estimated monthly income of the business of every respondent?

What are the differences on the challenges and opportunities between food franchising

and independent food business?

What are the differences on the means of ROE and estimated monthly income between

food franchising and independent food business?

Definition of Terms:

The researchers explained some terminologies to be able to clarify the words used in the research

they defined the following terms:

Business - a usually commercial or mercantile activity engaged in as a means of livelihood

- the activity of buying, selling goods and services.

Viability - the ability to succeed or to be sustained

- the ability to live, grow, and develop

Franchising - buying into a system where they have worked out operations, marketing,etc.

- A continuing relationship in which a franchisor provides a licensed privilege to the

franchisee to do business and offers assistance in organizing, training,

merchandising, marketing and managing in return for a monetary consideration.

Independent Business – at the name implies – you’re on your own to figure things out.

- It usually means a privately owned establishment. A business that is free from

outside control.

Entrepreneurs – a person who organizes and operates a business or businesses.

ROE – A financial analysis for businesses in order to determine the return of net income in

every peso of equity of capital invested. The formula is net income divided by the stock holder’s

equity.

Significance of the study:

1. Aspiring Entrepreneurs – They are the main focus of this research. Identifying which is

more suitable between food franchising and independent food business could give

encouragement for the people who plans to start a business and could help them easily

decide what to put up in Cataingan as beginners in the business field. It could also refine

a better awareness in business regarding what business they will choose and could lead

them to better understanding of how important is the efficiency and viability of a

business.
 2. Existing Entrepreneurs – The data compared will also be a guide to a more viable

business of existing entrepreneurs in Cataingan. The result of this study could improve

and innovate their chosen business due to the awareness of the common challenges,

opportunities, and profitability.

3. Future Researchers – They will be aware of the viability rate between food franchising

and independent food business for the year 2019-2020 in Cataingan. This can be used as

researcher’s basis if they wish to conduct research related to this topic.

Scope and Delimitation

The focus of this study is centered to the viability of a business in terms of food

franchising and independent food business in Poblacion, Cataingan. The factors to be compared

will be the challenges, opportunities, and profitability which are the ROE and estimated net

income

The aspects of the business for it is to grow in a specific place depending on the

consumers and environment.

It delimits that the study may not generalizable to other places but specifically on

Poblacion, Cataingan,Masbate only.

General Objectives:

1. To compare which of food franchising and independent food business is more viable

in Poblacion, Cataingan.

2. To guide entrepreneurs in choosing between franchising and independent business on

which is more suitable for them in the food industry in Poblacion, Cataingan.

3. To provide awareness for aspiring intrepreneurs on the challenges, opportunities, and

profitability they will likely encounter in starting and growing food business industry

in Poblacion, Cataingan.

Specific Objectives:

1. To determine the range and percentage of challenges and opportunities the

respondents usually encounter.

2. To determine the ROE and estimated monthly income of the business of every

respondent.

3. To compare the common challenges and opportunities between food franchising and

independent food business.

4. To compare the mean of the ROE and estimated income data between food

franchising and independent food business.

 A. METHODOLOGY

Research Design:

This study used the comparative and descriptive method of research. Our general

procedure of describing is by differentiating between franchising and independent business and

its performance in Poblacion, Cataingan, Masbate. It also provides an overview of the tools and

techniques available for gathering quantitative primary research using survey questionnaires.

Participants:

The participants of this study will include existing entrepreneurs of both franchising and

independent food business of Poblacion, Cataingan, Masbate who will be selected.

Instruments:

The instrument that will determine the result is the survey questionnaire. Since it is a

quantitative research, the researchers made use of this method of data collection which uses

specific questions provided with choices for the researchers to tabulate and calculate the

percentage in graph and the return on equity.

Statistical tool

The research will make use of the t-test to compute for the data gathered since the

respondents or sample will not be exceeding 30 and also, a comparison is the main basis of the

research. The value of the test will be the basis of the comparison of data between franchising

and independent business.