A Feasibility Study on Franchising of Potato Corner

Transcription

1 Bachelor of Science in Business of Administration Major in Management School of Management University of Asia and the Pacific A Feasibility Study on Franchising of Potato Corner Submitted in Partial Fulfillment of the Requirements for MGT221: Entrepreneurship and Innovation Submitted by: Hipolito, Juan Miguel Jao, Patricia Francesca Lopez, Anna Pamela Orense, Celina Ortiguera, Ma. Samantha Regina Ramos, Francesca Alexandria Rizo, Maria Fatima Concepcion Supan, Renzo Submitted to: Mr. Eric Parilla Faculty-in-Charge April

2 INTRODUCTION I. Current Market Situation Marketing A. PSIC Code Item Code Description Section I Accommodation and Food Service Activities Division 56 Food and Beverage Service Activities Group 561 Restaurants and mobile Food Service activities Class 5610 Restaurants and mobile Food Service activities Sub-Class Refreshment stands, kiosk and counters Table 1. Industry Classification (PSIC) from National Statistical Coordination Board. According to the Philippine Standard Industrial Classification code (PSIC), Potato Corner which is a franchise is classified under Section I of the Accommodation and food service activities. It is under Division 56 which is the food and beverage service activity and falls under group 561 and class 5610 which is the restaurant and mobile food service activities. In addition,potato corner is considered a franchise and a kiosk type of business and therefore falls under subclass which is the refreshment stands, kiosk and counters. (NSCB, 2009) B. Describe Industry Food cart or also known as Kiosk are mobile kitchen usually set up in places such as the streets, malls and offices in order for students and workers to enjoy a quick snack. The franchising business of this type is seen to have been increasing in the Philippines. In fact, it is said the the Philippines is considered to be the franchising hub of asia where franchising business has made remarkable growth in the past few decades. Some of these sectors include retail clothing, education and training, hospitality and wellness, personal care, cafes, confectioneries and bakeshop and food carts. ( Manila Reviews, n.d) In the year 1992 of October, Jose P. Magsaysay Jr. President and CEO of Cinco Corporation decided to innovate and add a twist to the french fries we eat. In the 90 s flavored popcorn was a hit; with this, he thought of adding flavors to the fries such as barbeque, sour cream, cheese and many more. Magsaysay's idea of making flavored french fries was a hit. By 1993, Potato Corner decided to expand by being open for franchising. It was seen that the sales had been 2

3 increasing and the demand for these fries were high; with this in the first year of potato corner being open to franchising, there were around 74 outlets despite the business being new entrant. In the year 2003, Philippine franchise Association and the Department of Trade and Industry awarded Potato Corner the franchise excellence hall of fame award. Today, with over 500 branches in the Philippines and around the world, Potato Corner is an ideal partner in making a secure investment for your future. Potato Corner has been a trailblazer in the franchise industry having been in business for 24 years, both in the Philippines, as well as around the world. With locations in Indonesia, USA, Panama, Australia, Singapore, Thailand, Dubai, and other countries in the pipeline, it is with no doubt that Potato Corner is the brand to partner with. Mission of Potato Corner Potato Corner, the first and the original Flavored French Fries prides itself in being a Global Brand that serves the best flavored fries to its customers, and by providing limitless opportunities for its Franchisees. In the celebration of our 24th year, Potato Corner embodied the theme: Championing The Game, which essentially means working our hardest to ensure that we provide quality products to our customers, and excellent service to our franchisees. Our Cheese, Barbecue, and Sour Cream flavored fries have been a staple snack for many Filipinos, as well as our friends around the world. It is our standard to maintain top quality French Fries with the right crispiness and texture, which is then shaken to perfection with the customer s preferred flavor. It is because of our customers that we are able to succeed as a brand. We take pride in giving our franchisees an opportunity to grow with us; we make sure that we work hand-in-hand with them in ensuring that their branches reach optimum sales while maintaining the quality of products and services that we provide our most loyal customers. With this, we make sure that that as we grow, our franchisees grow with us. C. Different Problems and Challenges Faced Franchising is one of the successful businesses established in the Philippines. This industry has the capability to adopt easily and grow in this tough economic environment. However, franchising industry still faced different problems and challenges due to the growing competitive economy. Some of the problems and challenges they are facing are: Price sensitive consumers, growing competition, adapting to the needs of the customers, rising costs, and working relationship with franchisor. First, consumers are starting to spend less and become price sensitive because of the increase in cost of living. There are a lot of economic factors that affect the consumer s buying behavior. Due to the increase of cost of living, consumers nowadays spend their money on the things they really need rather than buy what they want. In effect, the purchasing behavior of the consumers in this kind of industry happens occasionally, as a reward, and only if they have excess money 3

4 to spend for their unnecessary need. Businesses like this should find new ways on how to convince their consumers to buy and satisfy them especially those who value money. Second, a growing number of competitors are present in the food industry. There are a lot of known competitors in the franchising industry such as Mcdonalds, Jollibee, etc. In the case of potato corner, these competitors mentioned also offers flavored fries and gives a lot of variety of food unlike the potato corner who focuses only on fries. This also gives their consumers a convenience as they provide a lot of choices for the consumers as well as a place to stay. As a result, it increases the competition in market share and makes the other brands to be competitive in terms of their performance. Third, adapting to consumer needs is one of the biggest challenges that the industry is facing. For instance, many people nowadays are becoming more conscious on what they eat which they may prefer healthier food. Consumers opting for healthier food options is one of the example that the industry may want to improve in order to satisfy the needs of their customers. It is important to consider the needs of the consumers in the development of the brand in order to stay in this competitive market. Fourth, the rising costs for franchises in the food and restaurant industry. The increasing utility costs, equipment costs, maintenance costs and etc. are putting more strain on the bottom line of franchises. With customers being price sensitive, it will be difficult for franchises to pass on these costs to customers. Fifth, working with the franchisor is the toughest challenge in the franchising industry. It is a legally binding relationship that last for a long time. The franchisee s relationship with the franchisor will be extremely important. Thus, franchisor and franchisee should have an open communication. Franchisors determine the direction of the business, the marketing and the product offering, this can often put them at odds with their franchisees who view them as a challenging business partner that does not engage them enough in the decision making process. Analysis: Despite the success of the franchising industry in the Philippines, problems and challenges are normal to the business but this can be avoided or reduced. Some people may think that opening a franchise is easy and a simple way to start your own business. One thing that a franchisee must always remember is that they are not the superior of the business they want to enter in. it is challenging to be in the franchising industry because there are rules that needs to be followed even if you see an opportunity to change a certain process that will benefit the business. This problems and challenges faced by the industry are the responsibility of the franchisor and not the franchisee. However, having knowledge with these different challenges may help you in decision making if you still want to pursue it. Thus, research about the industry you want to franchise is very important and it is one way to avoid future mistakes. 4

5 II. Issue and Opportunity Analysis A. Opportunities Proven system Since there is already a system for the business, it would be a lot easier for the franchisee. The franchisor will just give a roadmap and the franchisee would just have to follow this. Everything that is included in the roadmap has already been tested and proven by the franchisor. This would result for the franchisee not to have the trial and error phase that would eventually lead to generating profit within a short period of time. (Adama, n.d.) Avoid many start-up systems Starting a business from the ground up requires a lot of time and effort just getting the basics in place. These would include having major setbacks and undertakings such as having to develop a reputation in the market or overcoming competitive threats. The franchisee would not have a hard time going through all these because the franchisor already did it. (Adama, n.d.) Existing name and reputation As stated above, you do not need to invest significant time and effort into getting your business known in the marketplace as the franchisor will already have done this for the benefit of anyone who would want to franchise the business. (Adama, n.d.) Advertising is easier The franchisee does not technically have to advertise Potato Corner. It s known to the public and is loved by the public. (Adama, n.d.) Greater knowledge base The franchisor is likely to have invested in market research for the benefit of all the people who would want to franchise the business. This means that the franchisor already has a great knowledge of their market(s) than those of the the local "independent" competitor/s. The results of this market research can be put to good use in the other of the advertising and marketing programs. (Adama, n.d.) Analysis: The Opportunities include having a proven system, avoiding many start-up systems, already having an existing name and reputation, advertising would be much easier, and greater knowledge base. Having these opportunities for a certain business would ensure the business to have a sure market and sure profit. B. Threats Capital Investment Establishing a franchise requires investment of time and money in business development, a flagship store, legal document preparation, marketing and packaging plans, and recruiting franchisees. (Adama, n.d.) 5

6 Restrictions Since the franchisee is buying the rights to participate in a proven "system, the franchisor will be concerned that all franchisees adhere to the system and not operate outside it. After all, if franchisees are free to adhere to the system or not as they see fit, there is no point in buying into a franchise at all. For this reason, for the benefit of the system as a whole, franchisors will generally impose strict controls on things such as the quality and types of products and services that you may offer for sale, the types of local advertising you may undertake, methods of dealing with customers, ethical conduct and the like. Franchisees must be careful to balance restrictions and support provided by the franchisor with their own ability to manage their business. (Adama, n.d.) Time Since they do not have control of the system, the term (duration) of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination. (Adama, n.d.) Location Since there are a lot of Potato Corner already nationwide, it would be a lot harder for the franchisee to look for a location that would be perfect for the preferred target market. If there is not enough people or the market is not in the place the franchisee chose, this would be hard for them to generate profit from this. (Adama, n.d.) Ongoing Costs Besides the original franchise fee, royalties, a percentage of your franchise s business revenue, will need to be paid to the franchisor each month. The franchisor may also charge additional fees for services provided, such as the cost of advertising. (Adama, n.d.) Analysis: The threats Potato Corner will encounter are capital investment, restrictions, time, location, ongoing costs. These threats are very common to all people who franchises a business there can be misunderstandings with the franchisor that can cause damage to the business (financially or operationally) this is why the franchise agreement is usually limited and is subject to renewal. Moreover, looking for possible locations for this brand can be tricky since most places in the Philippines already have a Potato Corner stall. Furthermore, there can be opportunities present on this business. Since the brand is already established there is already a roadmap and system ready to be followed. The reputation of the brand is very significant as it can be easier for advertising to the market and is easily acceptable. 6

7 III. Competitor Analysis A. Competitive Advantage/Edge DIRECT COMPETITORS Name of Direct Competitors Years of Existence Usual Customer Branches/Pla ce Product/s Price Competitive Advantage MJ Bagnet Express 2 years Students and Office workers One Corporate Center Olopsc College Marikina 1 Viand + Rice 2 Viand + Rice Choices of viands: Lechon Kawali Bicol Express Adobong Pusit Afritada Igado Chopsuey Pakbet Adobong Sitaw Sinigang sa Miso Buttered Veggies Ginataang Langka P P They offer different kinds of Filipino food that comes in a meal. Not a fast food restaurant. Paotsin 16 years Office workers and mall goers SM City North EDSA Trinoma Mall Savemore - Nagtahan SM City San Mateo SM City Lucena Pacific Mall Lucena SM City Manila DUMPLING SOLO DUMPLINGS w/ Hainanese Rice w/ Lemak Rice w/ Laksa Soup ASIAN CHICKEN w/ Hainanesse Rice w/ Lemak Rice w/ Sweet Potato Fries w/ Laksa Soup BEVERAGES: P P P P P P They offer their signature Hainanese Rice with cheap dumplings 7

8 Robinsons Manila Hypermarket Makati SM Hypermarket Adriatico Metro Point Shopping Mall Savemore Empire Forum Robinsons Pavillion Foodcourt Hypermarket Mandaluyong Sta. Lucia East Grand Mall Savemore Novaliches Robinsons Cybergate 3 Makro Sucat SM Mall of Asia SM Cubao Starmall Alabang SM Centerpoint Worldwide Buko Pandan 12 oz. 16 oz. 20 oz. SM Bonus Bottled Water 325mL EXTRA ORDER: Hainanese Rice Lemak Rice P P P P P P P P

9 Corporate Center SM Southmall SM City Novaliches SM Rosario SM City Marilao Sun Mall SM Aura Premier SM Hypermarket Talipapa SM Makati Market! Market! Las Pinas SM Marikina SM City Sucat Walter Mart North EDSA Waltermart Makati Waltermart Calamba Waltermart San Fernando Waltermart Carmona Waltermart General Trias 9

10 Waltermart Guiguinto Waltermart Sucat Waltermart Makil Waltermart Trece Martires Waltermart Bicutan Waltermart E. Rodriguez Waltermart Cabuyao Waltermart Bel Air Omelette On The Go 6 years Office workers and students Ayala Makati UP Benilde One Corporate Center 1 Meat + 1 filling + Rice MEAT: Bacon Chicken Corned Beef Ground Pork Ham Hotdog Longanisa Maling Tocino Tuna FILLING: Bell Pepper -Cheese -Cucumber -Garlic -Mixed Vegetables -Onion -Potato -Pineapple -Mushroom -Chili P They offer multiple versions of rice together with a filling and meat which will be the customer s choice. 10

11 -Potato RICE: Chicken Chili Cheesy Bacon Corned beef & Potato Ham and Hotdog Maling Hawaiian Spicy Ground Pork Spicy Tuna Vegetarian Asian Khalab 10 years Mall goers, students, families Pasig STE Starmall Shaw Sm Mandaluyong SM Cubao Farmers Market Starmall Alabang Sm Baliuag One Corporate Center SM North Shopwise Commonwealt h SM Baliwag Waltermart MOA Market Market Rustans SM novaliches PRODUCTS: Shawarma Pita Kebab Pita Shawarma Rice Celo Kebab Pitazza BEVERAGES: Bottled Water Red Tea Cucumber Lemonade EXTRA: Egg Sliced cheese Cheese sauce Hot sauce Garlic Sauce P P P P P P P P P P P P P They mainly offer shawarma products, it can either be placed on rice or pita. Healthy Hour 1 month Office Workers One corporate center VIANDS: Roast Beef Veggie Kare Kare P 99 P 99 Aside from offering different viands, they offer taho 11

12 Garlic Chicken Fish Fillet in Tausi Sauce Sweet and Sour Fish Fish Fillet in Crab and corn RICE: Brown Rice P 99 P 99 P 99 P 99 P 20 SOYA/TAHO: Special Taho (12oz) Special Taho (160z) Cold Taho Soya Milk (500ml) P 35 P 50 P 45 P 40 Chicken Zilla 7 years Office workers and Students The Galleon, 6th Floor One Corporate Center Julia Vargas Food Arcade, 9th Floor, Philam Life Tower, Paseo de Roxas BONELESS CHICKEN CHOP BENTO (Classic, Plum, BBQ, Cheese,Pepper Salt, Seaweed, Curry, Mushroom) They specialize in serving different flavors of chicken 2nd Floor, Multi-Deck Parking Lot, University of Sto. Tomas Food Club, Ground Floor, Philplan Baby P With small drink: P With Large 12

13 Building, Kalayaan Avenue Upper Ground Floor, Worldwide Corporate Center, Shaw Blvd Junior Original drink: P P With small drink: P With Large drink: P Original P With small drink: P With Large drink: P CHICKEN WINGS: Korean Soy Garlic +Spicy Buffalo 4 Pcs: P Pcs: P CHICKEN TEMPURA: Spicy Teryaki Sweet Chili SIDES AND BEVERAGES: P P

14 Fat Fries Hashies Guava Stx Shrooms Tempura Solo P P P Orange Juice Ice Tea Softdrinks Sandwich Guy Office workers and mall goers Robinsons Cybergate Tower 1 One E-com Center Dela Rosa Carpark 1 PREMIUM SANDWICHES: BBQ Chicken NY Pepperoni Half: P63 Whole: P105 Half: P60 Whole: P110 The sandwiches offered come in different variations that can be bought in half or a whole. SM Megamall McKinley Hill PhilPlans Corporate Center Pacific Star Building Net Plaza SM The Block Robinsons Forum HBLT Cuban Lean Pork Chicken Pesto Half: P63 Whole: P110 Half: P60 Whole: P110 Half: P60 Whole: P110 Half: P82 Whole: P145 They also offer pasta, salad and kinds of potatoes. Worldwide Corporate Center Robinsons Summit Center Robinsons Ultimate Roastbeef HEALTHY SANDWICHES: Grilled Cheese Half: P55 Whole: P90 Half: P55 Whole: P90 14

15 Cyberscape Aplha Cash and Carry Mall The Globe Tower Rockwell Makati One Corporate Center RCBC Plaza Tower 2 SM City Calamba SM City Bacoor SM City Dasmarinas SM City Pampanga SM City Clark Marquee Mall Carpese Cheesy Pesto BBQ Tofu Country Tuna Crabstick & Mangoes PASTA: Pesto Tommy Boy Tomato Basil Creamy Carbonara Half: P60 Whole: P95 Half: P60 Whole: P105 Half: P63 Whole: P110 Half: P45 Whole: P75 Half: P45 Whole: P75 Half: P50 Whole: P85 Half: P50 Whole: P90 Half: P53 Whole: P85 Half: P55 Whole: P90 Half: P55 Whole: P95 SALAD Caesar Salad 15

16 POTATO Beefy Mushroom Potato Cheesy Bacon Potato Siomai King Office Workers and Mall goers St Francis Floodway Crossings One Corporate Center Shanghai Siomai HongKong Siomai Chicken Siomai P 30 P 30 P 32 They only offer four Siomai variants and it can be served with Black Gulaman Japanese Siomai P34 Black Gulaman P12 Belgian Waffle Students and Mall goers SM Megamall SM City Fairview SM Centerpoint Festival Supermall Ali Mall SM Consolacion SM City San Lazaro SIMPLY PERFECT! Plain Chocolate Peanut Butter Cheddar Cheese Strawberry Creamcheese Blueberry P30 P35 P35 P35 P45 P45 P45 They offer different kinds of waffles that goes well with hot drinks SM City Sucat Hazelnut P45 SM City Manila PERFECT COMBINATION: SM Marikina Ham & Cheddar P45 16

17 SM Mall of Asia SM Clark Pampanga SM City Calamba SM City Baguio Trionma Eastwood Mall Lucky Chinatown Mall One Corporate Center SM Rosario PATTS College of Aeronautics Fisher Mall Riverbanks Mall SM Center Las Pinas St. Lukes Medical Center SM City Novaliches SM Valenzuela Glorietta 4 Science Hub Banana Peanut Butter Banana Chocolate Chocolate Peanut Butter Ham and Creamcheese Blueberry Creamcheese Strawberry Creamcheese HOT DRINKS: Malaysian Coffee Malaysia Strong Coffee Malaysian Hot Choco P45 P45 P45 P55 P55 P55 P35 P35 P35 17

18 Trinoma Supermarket SM Southmall SM Center Angono SM City North EDSA Waltermart North EDSA Waltermart Makati Waltermart Dasmarinas Waltermart Sta. Maria Waltermart Cabuyao Waltermart Sta. Rosa To Sisig is To Believe Office workers and Mall goers Farmer s Plaza. Araneta Center Cubao One Corporate Center Ortigas, Pasig Strata 2000 Building Ortigas, Pasig Solo Pork Chicken w/o Rice Solo Pork or Chicken Combo Pork or Chicken w/ drinks Salo w/o rice Pork or chicken (Good for 2-3 people) P P P P They offer the Filipino Sisig which has different kinds; pork chicken, squid, bangus and shrimp Squid/Bangus: Solo w/o rice Solo w/ rice Combo w/ drinks P P P

19 Salo w/ rice P Shrimp: Solo w/o rice Solo w/ rice Combo w/ drinks Salo w/ rice P P P P Extra Rice Half rice Egg P P 5.00 P Pizza Hut Office workers, Mall goers, students and commuters Gateway Mall BF Homes Market! Market! Malabon City Square Puregold Malinta FLAVORS OF PIZZA: Mushroom Beef Sausage Hawaiian Supreme 2 slices of pizza for P 55 It is a very popular go-to snack for the employees, the pizza is heated well. This stall only sells 2 flavors of pizza. SM Megamall SM City North EDSA SM Mall of Asia SM City Fairview SM City Manila Mindanao Ave. EDSA Central Ever Gotesco Commonwealt h Fort Bonifacio 19

20 Shell - San Antonio Ave. SM Southmall South Supermarket Shaw Center Mall Visayas Ave Star Mall EDSA Tutuban Center Insular Life Bldg. Park Square SM Centerpoint Robinsons Place Manila Robinsons Place Novaliches SM Sucat SM City Bicutan Araneta Square Ali Mall Greenhills Shopping Center Harrison Plaza 20

21 Robinsons Galleria Robinsons Metro East New Farmers Plaza Olivares Plaza East Service Rd. Cafe France Office workers., Mall goers, medical establishm ents and travelers Alabang Town Center SM Mall of Asia East Ave. RCBC Plaza U.N. Plaza Pergola Mall St. Luke s Medical Center Chicken Pastel Pie Chocolate Walnut Croissant Choco Bun Ham and Cheese Croissant Mini Chocolate Walnut Croissant P70 P94 P12 P94 P51 The stall is easily located and is accessible to people. Their products offered are for snacks - bread (croissant, baguette). Their cheapest product is the Choco Bun that is worth only P12 The Podium Roosevelt Mini Ham and Cheese Croissant P51 Zeta Greenhills Theatre Mall Shell SLT - Southbound Hawaiian Pizza Baguette Four Cheese Pizza Baguette P120 P120 C5 Libis Shell SLT - Northbound NAIA Domestic 21

22 NAIA International NAIA 3 - Domestic Robinsons Place Manila Ayala Tower One AIM Conference Center Metropolitan Medical Center SM Center Las Pinas Asian Hospital Jupiter St. Makati Cardinal Santos Medical Center Glorietta 1 Our Lady of Lourdes Hospital The Medical City Korean Healthy Food Seoul Seoul 2 years Office workers and Students One corporate center UP Ever Commonwealt h Ramen Kimbap and Mandu Cheese Ramen Japchae and Mandu P 70 P 99 P 99 P 99 Their products are mainly korean food, they are the only korean stall in the cafeteria. 22

23 Bibimbap P 150 Bulgogi P 95 Mandu P 40 Mandu Ramen P 100 Gomtangmen P 80 Kimchi Fried Rice P 65 Pork Galbijjm P 85 Gem P 25 Samba Kimbap P 40 Rice n Dice Office workers One Corporate Centre Beef Mushroom Steak Garlic Beef Teriyaki Cheesy Butter Steak P79 P79 P79 The food can be easily eaten and carried because of the packaging. Gravy Meat Love P79 Ice Tea P20 Paj Grill 20 years Office workers, students, bazaarista Adamson University MAPUA One Corporate Centre, Ortigas 2pcs Pork BBQ w Rice Grilled Liempo w Rice Grilled Liempo w Rice P70 P75 P65 They offer grilled food that is served with rice. Sampaloc Private Grilled Chicken Leg Quarter w Rice P85 23

24 functions Food bazaar Grilled Boneless Chicken w Rice Grilled Chicken w Rice Pork BBQ Chaofan Rice P100 P70 P35 P20 FreeStyle Large Fries (Barbeque Cheese Sour Cream) BUDGET MEALS Burger Pattie Sandwich P45 P35 They offer budget meals at a reasonable price. Single Burger Pattie P30 Double Patty with Rice P70 Double Patty with Rice and Egg P80 Spam Sandwich P30 Single Spam Spam with Rice and Egg P25 P55 ALL DAY BREAKFAST (w rice and egg) TJ Jumbo (w bacon) TJ King (w bacon) TJ Cheesedog (w bacon) P55 P65 P60 P70 24

25 Chicken Franks Jumbo (w bacon) P60 P70 P60 Table 2. Competitor Analysis of Direct competitors P70 Table 2 contains the direct competitors of potato corner. These are the direct competitors since these are the stalls that can be found in the 6 th floor cafeteria of One Corporate Centre. They offer variety of food products that will satisfy the needs of the consumers. This table discusses the years of existence, usual customer, other branches/places, product/s they offer, price, and competitive advantage of each competitor. Analysis: MJ Bagnet Express MJ Bagnet Express offers a variety of lutong bahay filipino food at affordable prices. Although it is quite new in the market, it has already expanded in numerous cities and caters to both students and office workers. Paotsin With over 16 years of existence in the industry, Paotsin never fails to offer their signature hainanese rice with cheap dumplings and free soup. It has expanded and has over 20 branches all over the Philippines. The usual customers of Paotsin are mall goers and office workers. Omelette on The Go Omelette on the Go offers a variety of meat filling which you could choose from and placed in the omelette. Some examples of these are: hotdog, bacon and chicken. Omelette on the Go has been in the food industry for 6 years and has 5 branches around Makati, Ayala, UP, Benilde and One Corporate Center. It caters to both students and mall goers. Khalab Khaleb mainly offers shawarma which customers could choose to either place it on rice or a pita. It has been in the industry for 10 years and its usual customers are mall goers, students and families. Khaleb has been doing well in the food industry because of the quality food they are able to provide and the affordable prices. Today, Khaleb has over 10 branches all over the Philippines. Healthy Hour Healthy Hour has only been in the food industry for a month. Aside from offering different viands such as roast beef and brown rice or veggie kare-kare and brown rice; it also offers taho and soya milk. As of today, Healthy hours only branch is in One Corporate Center and its target market are workers and employees. 25

26 Chicken Zilla Chicken Zilla has already been in the food industry for 7 years. It continues to expand Its market all over the philippines; and as of today, it has 6 branches already. It specializes in serving flavoured chicken at affordable packages and prices which consumers could pick from. Sandwich Guy Sandwich Guy offers a variety of different sandwiches consumers could pick from. Not only does sandwich guys offer sandwich but they also offer pastas as well. Consumers could pick and choose whether they would want to buy half the sandwich or the whole sandwich. The usual customers of sandwich guy are mall goers and office workers. Siomai King Siomai King offers a variety of siomai, which range from P30 - P34 consumers could pick from. They offer four variants of siomai which are: Shanghai, Chicken, Japanese and Hong Kong Siomai. Siomai King, also offers black gulaman which consumers love since it is a good combination with the siomai. As of today, it has 4 branches all over metro manila which caters to mall goers and office workers. Belgian Waffle Belgian Waffle offers a variety of waffles consumers could pick from. Whether they want it plan or with filling, Belgian waffle offers it. It has over 15 branches all over metro manila and caters to mall goers, students and office workers. To Sisig is To Believe To Sisig is To Believe offers affordable and a variety of filipino sisig consumers could pick from; These are: pork, chicken, squid, bangus and shrimp. As of today, it has 3 branches all over metro manila that caters to both mall goers and students. Pizza Hut Pizza Hut is a popular snack employees usually buy. Since it is only a kiosk type, it only offers 4 flavours of pizza which are: mushroom, beef sausage, Hawaiian and supreme which cost P 55 for 2 slices. Cafe France Café France which is placed in One Corporate Center is a kiosk type of business and offers snack bread products and flavoured buns. Employees usually come and buy these because it is easy to eat and at the same time has a variety of flavours. Its usual customers are mall goers, travellers, medical establishments because of the locations of the stalls. 26

27 Korean Healthy Food Seoul Seoul Korean healthy food seoul seoul offers a variety of korean food such as ramen, kimbap and many more. It has only been in the industry for 2 years and currently has 2 branches which are placed in UP and One Corporate Center. Rice n Dice Rice n Dice is known for its asian street food served in a box. Customers could choose from a variety of viands that would be mixed with rice. Paj Grill Paj Grill offers a variety of grilled filipino food that is served with rice. It is known because of delicious tasting food which is affordable for its consumers. FreeStyle Freestyle offers a variety of budget meals such as burgers, rice all day breakfast and a lot more. It also offers different flavoured fries such as barbecue, sweet and sour and cheese; all of these served at an affordable prices. 27

28 Market Share of Direct Competitors Kiosk Daily Sales Market Share MJ Bagnet Express 3,000 4% Paotsin 6,000 8% Omelette On The Go 4,000 5% Khalab 5,000 7% Healthy Hour 6,000 8% Chicken Zilla 5,000 7% Sandwich Guy 4,000 5% Siomai King 5,000 7% Belgian Waffle 5,000 7% To Sisig is To Believe 5,000 7% Pizza Hut 5,000 7% Cafe France 5,000 5% Korean Healthy Food Seoul Seoul 3,000 4% Rice n Dice 5,000 7% Paj Grill 5,000 7% FreeStyle 4,000 5% TOTAL: 75, % Table 3. Market Share of Direct Competitors based on their Daily Sales Analysis: Table 3 shows the market share of each competitor through their daily sales. Combining all the daily sales of all the competitors equals to 75,000. There are two competitors that have the highest market share with 8% and these are Paotsin and Healthy Hour. Next are Khalab, Chicken Zilla, Siomai King, Belgian Waffle, To Sisig is To Believe, Pizza Hut, Rice n Dice, and Paj Grill with 7%. Moreover, the 5% market share goes to Omelette On the Go, Sandwich Guy, Café France, and FreeStyle. Lastly, MJ Bagnet Express and Korean Healthy Food Seoul Seoul has only 4% of the market share. 28

29 Indirect Competitors The Indirect Competitors of Potato Corner are those restaurants in One Corporate Center but not part of the Cafeteria. Theses Indirect Competitors are Gandiva Archery range and cafe and Nozumi. Buyer to Consumer Strategy (B2C) Potato Corner uses the buyer to consumer strategy or also known as consumer marketing. This kind of strategy is used by consumers since they are the ones who make the final decision in purchasing and at the same time they pay for their own transactions B. Pricing strategy Potato Corner uses cost focus strategy. This is because potato corner offers its french fries to a niche market or those who are fries lovers. Its is also considered a cost focus strategy, because often times the people who usually craves and buy potato corner are those people who find these fries affordable. IV. Market Demand Foot Traffic Results TIME 9:00AM - 10:00AM :00AM - 11:00AM :00AM - 12:00PM :00PM - 1:00PM 660 1:00PM - 2:00PM 255 2:00PM - 3:00PM 155 3:00PM - 4:00PM 247 4:00PM - 5:00PM 200 5:00PM - 6:00PM 36 6:00PM - 7:00PM 0 7:00PM - 8:00PM 0 Table 4. Foot Traffic Market Demand 29

30 Analysis: The graph above shows the foot traffic done on a weekday specifically on a wednesday. The foot traffic was done per hour in order to see what time has the most number of people who come in to buy food. With this, we were able to see that during the 12:00-1:00pm has the highest number of people who come to the cafeteria and this is because of their lunch break. It was also seen that the 11:00-12:00 foot traffic was high and it was seen that, employees would go down and eat early in order for them to avoid the hassle of going through and lining up with everyone during their lunch break. V. Demand Forecast Sample Survey: 1. Ilang taon na po kayo? 2. Ano pong trabaho niyo? 3. Ano po buwanang sahod niyo (Range)? 4. Gaano ka kadalas kumakain sa 6 th floor? 5. Anong oras po kayo bumibili sa cafeteria? 6. Bumibili ka ba ng pagkain dito? Oo Hindi 7. Mahilig ka ba sa French fries? Oo Hindi 8. Magkano ang nais mong ibayad para sa French fries? P29-50 P P100 pataas 9. Kapag nag-tayo ng Potato Corner dito, bibili ka ba? Oo Hindi 10. Ano ang paborito mong flavor ng Potato Corner? Barbecue Cheese Sour Cream 30

31 Results: The respondents said that they eat at the 6th floor in a daily basis during their break time at One Corporate Centre. Others said that they eat once a week, followed by thrice a week. These respondents said that this is due to the reason that they are assigned to do field work. 31

32 The respondents said that they usually spend their lunch time at the 6th floor followed by merienda time. This is due to the reason that this is the time when they buy and eat their food. People don t buy and eat their breakfast and dinner at the 6th floor of One Corporate Centre because these time are not part of the office hours anymore. 32

33 A big chunk of the respondents said that they buy their food at the 6th floor of One Corporate Centre. However, a minimal number said that they don t buy at the 6th floor of One Corporate Centre, rather they just eat their baon or at the least, they just accompany their colleague. A big chunk of the respondents said that they like eating french fries. However, a minimal number said that they are not into french fries and that they prefer other type of food such as sandwiches and others. 33

34 The respondents said that they are willing to spend P29-50 for an order of french fries. Followed by P and at the least, P100 and above. These people like french fries however, only willing to pay at a minimum amount because there are other needs to be prioritized. 34

35 Respondents were easily able to recognize the brand of Potato Corner and all were ready and happily accepted the idea of the franchise being put up in their cafetera. Given that all the respondents would favor a Potato Corner being put up in the cafeteria, they were also accepting of the the famous flavors of the franchise, with Sour Cream being the top favorite of the respondents, Barbecue following after, and lastly cheese. 35

36 VI. Target Market The target market of Potato Corner consists of men and women ages from from class C. Moreover, it can also be for the kids and the kids at heart. This is because the lifestyle of these people seem to be willing to try new flavors, if not buying the same original flavors Potato Corner offered at first (Barbeque, Cheese and Sour Cream). They are able to meet with the different taste and preferences the brand wants. These group of people The affordability of this brand can be a factor to why these people like buying from Potato Corner. Potato Corner has been a favorite snack for many Filipinos and others around the world. Target Market Demographic Geographic Workers and Employees Ages Class C Male and Female Workers in One Corporate Center VII. Positioning Statement To men and women, years old, Potato Corner is a business that serves top quality flavored french fries to the market. They satisfy the customer s preferred flavor through the right amount of shaking! VIII. Marketing Mix A. Product Potato Corners offers a variety of flavor such as barbecue, sour cream, and cheese. Potato Corner became such a hit here in the Philippines and thus, potato corner expanded internationally and added new flavors such as wasabi, sweet corn, and cheddar fries. B. Place Potato Corner has over 800 stores both nationally and internationally. With over 500 branches here in the Philippines, Potato corner has been part of the top franchise industry business in the Philippines for over 24 years. It has also expanded internationally in countries such as Indonesia, USA, Panama, Australia, Singapore, Thailand and Dubai. Based on the foot traffic and the demand for french fries in this area, the group decided to put up a Potato Corner franchise at the 6th floor of One Corporate Center Cafeteria. One Corporate center is located in Julia Vargas corner Meralco Avenue, Ortigas business district Pasig City. 36

37 C. Price Potato Corner offers affordable price where consumers could pick from. Depending on the location of the place, the price may differ because of the rent in that certain area. SIZE PRIZE Regular P 29 Large P 50 Jumbo P 80 Mega P 100 Giga P 169 Tera P 199 Prices differ depending on the location on Potato Corner Potato Corner offers a variety of flavors and Sizes: For the Regular size it cost P 29, Large is P50, Jumbo is P 80, Mega is P100, Giga is P169 and Tera is P 199. For both the regular and large size customers are only allowed to choose one flavor. However, for the jumbo to tera sizes, customers are allowed to combine 2 flavors. Potato Corner prices may also vary depending on the rent of the place. 37

38 D. Promotions and Advertising A Potato Corner franchise may opt and not need to spend for franchising since potato corner has already an established market and is known for its name. Operations I. HR Requirements A. Organizational Chart The franchise s (Potato Corner) organizational chart begins with its franchisee and he will be overlooking the daily operations of the business. He will also be supervising the two crew personnel who will be in charge of handling the stall. B. Duties and Responsibilities of each personnel 1. Franchisee The franchisee runs the location of the purchased business. He runs the basic operations of the franchise and handles the different departments such as marketing, financials, and human resource. 2. Crew personnel The crew personnel follows a prescribed procedure in preparing and serving the food daily to customers. They will operate various types of equipment such as the deep fryer, (etc). They will be responsible for washing the necessary utilities, equipment, and the work area including mopping the floor. The crew personnel will also be handling the cash register to take orders and handle purchases. 38

39 II. Facilities, Equipment, and Machineries Requirements Facilities, Equipment and Machineries are the necessary items needed for the franchise to make the business operation successful. These items will be able to help the business meet their target profit. Moreover, using such equipments will be the key to producing and preparing the good quality flavored-fries Potato Corner is known for. For the this franchise, the required or needed items for the business are listed below. Franchise cart Image 1. Potato Corner franchise cart This is the standard cart of Potato Corner, this is the cart that will serve the flavored-fries every person is looking forward to eating as a snack. Behind the cart there are shelves above that will act as a storage for the paper bags and flavored powders. 39

40 Deep fryer (electric) with strainer Image 2. Deep fryer with strainers The deep fryer is responsible for cooking the fries, there is a timer for the fries so that it will be cooked not to crispy and not too soft. The timer on the deep fryer will help the franchise be consistent with the quality of fries they are serving to customers. Freezer Image 3. Freezer There is a medium sized freezer which holds and stores the fries and a cooler for the beverages. It is used to store the perishable items the franchise uses, so that it will not go to waste. 40

41 Canisters (Shaker) Image 4. Canisters (Shaker) These canisters hold the fries that will be shaken so the powdered flavorings will stick to the fries. There are separate canisters for every flavor Potato Corner has so that the fries will not have a mixture of the different flavors. Container with spoon Image 5. Container with spoon These containers hold the various powder flavorings that is used in Potato Corner. Also, these containers are provided for easy access, of the different flavors, of the crew personnel. 41

42 Fry Scoop and Container Pan Image 6. Fry Scoop and Container Pan These items hold the fries after they are shaken and ready to be put in the container ready to be weighed. It is of stainless steel so it has to be washed for sanitation purposes. Paper Containers/ Packaging Image 7. Paper Containers Being a franchise business Potato Corner have their signature containers where they serve their fries. It comes in various sizes like large, jumbo, mega, giga, tera and etc. 42

43 Weighing scale Image 8. Weighing Scale Every Potato Corner stall uses a weighing scale to match the amount of fries they are serving. The franchise offers multiple sizes from the smallest to the biggest which can be shared by a group. The weighing scale determines the quantity that is to be served so that the business will not suffer losses. Tongs Image 9. Tongs The franchise will have tongs for transferring the product inside the paper bag. This promotes sanitation as the customer will see that the personnel will not be using their hands. 43

44 Paper Bags Image 10. Paper Bags Potato Corner has its own paper bag design that will hold the product so that the people eating will not have a hard time. Every french fries that is served to the customer always comes with a paper bag. Plastic Gloves Image 11. Plastic Gloves The gloves will promote sanitation to assure the customers of the clean food they will provide to the customers. The gloves will help the personnel avoid touching the fries when they transfer different containers. 44

45 Hairnet Image 12. Hairnet The hairnet is to be able to assure the customers that their food will be clean and safe to eat. The branch can avoid complaints from customers if they will be extra careful with the handling of their food. Plastic mask Image 13. Plastic mask For proper sanitation the personnels working their shifts will be wearing it when preparing and serving the product. It is not a requirement to use this, it can depend on the branch but it is highly advised to use it. 45

46 Cash box Image 14. Cash box The cash box will be located in a drawer that is attached to the cart. Since the Potato Corner stall is not that big there is no need to use a big cash register. Frying oil Image 15. Frying oil The frying oil is used to cook the french fries. Potato Corner uses a specific frying oil to be able to cook the fries into the desired quality Potato Corner sells, the franchise should make sure that the quality of fries is consistent. 46

47 Regular Large Jumbo Mega Giga Tera Price (Php) Gram (g) Price per gram Bill Of Materials Item Number Description Unit Used Quantity Price 0001 French Fries Kilograms P 92/kg 0002 Powder Kilograms P 450/kg 0003 Cooking Oil Liter P 80/liter 0004 Packaging Pieces P4/piece Size (grams) Regular 50 Large 100 Jumbo 150 Mega 200 Giga 350 Tera

48 Financials Conclusion and Recommendation After studying and conducting a feasibility study, the researchers found out that putting up a Potato Corner franchise in One Corporate Center would not be feasible due to the due to the extended length of time of return of the investment (ROI). Some of the possible reasons of this would be because of the high rent expense and the cafeteria only being open five days a week. Another factor that contributed to the study not being feasible is because the target market in One Corporate Center are mostly Class C and that they would not really pick Potato Corner over a complete meal that is less expensive as well. With this, the researchers would recommend to put up a Potato Corner franchise in a different location which would offer a lower rent expense, a location that has greater foot traffic, and a location that will cater to its target market. 48

49 References Adama, A. (n.d.). The Franchise Alternative. Retrieved March 27, 2017, from Arboleda, G. (2010, July 09). THE FOOD CART BUSINESS IN THE PHILIPPINES. Retrieved March 27, 2017, from Philippine Standard Industrial Classification. (2009) Philippine Standard Industrial classification. Retrieved from Six challenges facing the franchising sector. (2016, February 11). Retrieved March 27, 2017, from Top 5 challenges faced by Franchisees. (2015, June 19). Retrieved March 27, 2017, from Strauss, K. (2016, June 22). 13 Mistakes New Franchisees Make -- And How To Avoid Them. Retrieved March 27, 2017, from mistakes-new-franchisees-make-and-how-to-avoid-them/#7d66489d5bd6 What is low cost? definition and meaning. (n.d.). Retrieved March 27, 2017, from 49