Ref.

The Benefits of Franchising

According to the latest data from the Philippine Franchising Association (PFA), the franchising industry in
the country is projected to rise by a whopping 25 percent to $31 billion this year due to the Philippines'
strong economic growth.

Franchising Success Rate

The success rate of franchising in the Philippines has hit 90 percent with most of the available franchises
with proven business models. This percentage is based on the latest statistical data from PFA, citing that
with only a 25 percent success rate, this is better than the retailing industry.

Reference:

Franchise Market PH. (n.d.). Why You Should Franchise in the Philippines Now (2020). Retrieved from
Franchise Market PH: https://www.franchisemarket.ph/blog/why-you-should-franchise-in-the-
philippines-now.

Ref. 2

The latest statistics from the Philippine Franchising Association (PFA), the largest and oldest franchising
organization in the Philippines, indicate that there are close to 900 franchises operating in the country
from just 50 in 1995 and 64 percent of these are homegrown. These are primarily in food, service and
retail.

Franchising has thus become a major force in the economy, accounting for an estimated 15 percent of
the annual retail sales of roughly $5 billion.

Today, franchise concepts are offered by successful small and medium-scale enterprises (SMEs) for
below P50,000, such as water-refilling stations, beauty salons and food businesses in kiosks, carts and
stalls.

Reference:

Philippine Daily Inquirer. (2020). Filipinos Are More Into Franchising. Retrieved from Franchise
Philippines: https://franchisephilippines.org/filipinos-are-more-into-franchising/

Ref. 3

The 2019 List of Establishments of the Philippine Statistics Authority (PSA) recorded a total of 1,000,506
business enterprises operating in the country. Of these, 995,745 (99.5%) are MSMEs and 4,761 (0.5%)
are large enterprises. Micro enterprises constitute 89% (891,044) of total MSME establishments,
followed by small enterprises at 10% (99,936) and medium enterprises at 0.5% (4,765).

Sectoral Distribution

The top five (5) industry sectors according to the number of MSMEs in 2019 were: (1) Wholesale and
Retail Trade; Repair of Motor Vehicles and Motorcycles (462,492); (2) Accommodation and Food
Service Activities (144,024); (3) Manufacturing (115,387); (4) Other Service Activities (65,918); and (5)
Financial and Insurance Activities (46,100). These industries accounted for about 83.35% of the total
number of MSME establishments.

Reference:

Department of Trade and Industry. (n.d.). 2019 MSME Statistics. Retrieved from Department of Trade
and Industry: https://www.dti.gov.ph/resources/msme-statistics/.

Ref. 4

The Philippine franchising sector is seen shrinking by 70,000 outlets to 130,000 by the end of 2020 from
a peak of 200,000 stores at the end of 2019 due to the onslaught of the coronavirus.

The Philippine Franchising Association (PFA) estimates that the number will further decrease to 110,000
outlets by the end of the first quarter of 2021, including those owned by franchisors and franchisees.

Reference:

Domingo, R.W. (2020). Up to 40% of franchises seen closing due to COVID-19. Entrepreneurship.
Retrieved from Inquirer.Net: https://business.inquirer.net/308757/up-to-40-of-franchises-seen-closing-
due-to-covid-19.