Franchisers seek Congress help on high rents in malls

By Riza Lozada

The Association of Filipino Franchisers, Inc. (AFFI) is urging legislators to craft a law regulating rental rates in mall spaces.

AFFI Chairman Armando Bartolome said increasing rental rates in malls has been a huge problem for franchise businesses, particularly among startups.

He said the average rent for a space of six square meters is currently at P25,000 to P35,000 per month from P15,000 a few years ago. Space rentals also account for 15 to 18 percent of gross sales of a franchise business, AFFI said.

“We are looking at how they can be friendly, especially to startups. Startups would like to go to malls because of the captured market.

Your critical mass is there,” Bartolome said. “When you talk of malls, the concern really is big rentals.

We’ve been deliberating this issue for many years and of course this is beyond our control because these are run by private individuals,” he added.

AFFI Executive Director Raffy Cañare said the industry aims to hold dialogues with the government, particularly the legislative branch to address the concern on rental rates.

Cañare said AFFI has tapped the office of Sen. Sherwin Gatchalian, who is the chairman of Senate committee on economic affairs, to create a law that will monitor and standardize space rentals in malls.

“For startup businesses and for those who want to expand their concept, the mall would be viable because that’s where you put traffic.

But sooner or later you will feel the heaviness of the cost,” AFFI Executive Vice President Ricardo Cuna said. “So we tell our members the avenue is big. We don’t have to keep on squeezing ourselves in big malls.

Go to community malls, medium malls to surpass issue on rentals,” added Cuna.

AFFI is optimistic that the local franchise industry will continue its growth with new venues for franchise businesses like condominiums and other communities outside malls.

Filipino franchise companies are also looking at global expansion. Currently, 16 Filipino franchisors have global presence including Aquabest, Crystal Clear, Eat Bulaga, Figaro, Fiorgelato, Goto King, Lay Bare, Mang Inasal, Potato Corner, Julie’s Bakeshop. Binalot, Ferinos bibingka, Nasa Water, Reyes Hair Com-pany International, Adobo Connection, and Acquasuisse.

As of September 2016, aggregate sales of AFFI members increased to P107 billion compared to same period of last year’s sales at P94 billion. For 2017, AFFI eyes total sales of P150 billion. AFFI membership grew from 165 last year to 210 this year.

To date, AFFI has a total of 35,539 outlets of members employing 213,569 personnel. Meanwhile, the business group will hold the 15th Fran-chise and Business Expo on October 14 to 16