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MANILA - Wendy's Philippines is developing a sub-franchising system for its parent firm, as the fast-food chain aims to open 8,000 restaurants outside the US.
On the sidelines of the Philippine Franchise Association expo last week, Elizabeth Pardo-Orbeta, WenPhil Corp. chairperson, said the American company has been "very insular" and its international operations failed to get the support needed. WenPhil Corp. is the holder of the master franchise of Wendy's in the Philippines.
"Regional is a lot more flexible now. They're less restrictive. Our regional vice president was here. He is more customer-focused than the previous, he is more open to change," Pardo-Orbeta said.
"We had our major shake-up in our organization, so they are more focused on the brand and on international operations," she added.
According to the company's website, Wendy's management believes that earnings from its international markets will be a "significant component" of its ability to generate long-term value for its stockholders.
To reach this goal of growing aggressively outside its home country, the brand has to go the sub-franchising route.
"The problem is that Wendy's International does not have the system for sub-franchising. We are developing for them. We're doing them a favor," Pardo-Orbeta said. WenPhil Corp. is the only company in the world that is allowed by its parent firm to sub-franchise.
According to the World Franchising Council, the Philippines ranks fifth in terms of the number of franchises, fourth in terms of the number of jobs generated by franchising, and 11th in terms of the number of brands that can be franchised.
For two years, Wendy's Philippines stopped expanding because of negotiations for its contract with Wendy's International. “Now it has the go-signal to do so, WenPhil will have eight additional stores by the end of this year,” Pardo-Orbeta said.
The company is spending P8 million to P10 million for new stores. It will also renovate its existing ones as it plans to convert some branches into 24-hour restaurants. Wendy's only has eight 24-hour stores in the Philippines.
"We're open for franchise now but we're taking it slow because we need to make sure the system we develop is right," Pardo-Orbeta said. This means the company will have about 20 percent of Wendy's branches franchised and will expand this to 50 percent within seven years.
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