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Franchisers decry high mall charges

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A group of franchisers on Wednesday asked the government to rationalize the rental fees charged by shopping malls from entrepreneurs.

The Association of Filipino Franchise Inc. said both members and non-members expressed concern over the high rental rates that doubled in the last few years.

“Most of the concerns of business people are rent. We have engaged Senator Sherwin Gatchalian to help us create a law that will monitor rents in malls,” AFFI chairman Armando Bartolome said Wednesday in a pre-event briefing for the upcoming 15th Franchise and Business Expo.

The group said from P15,000 per six-square-meter space a few years ago, the rent paid by a tenant at a shopping mall now reached P30,000 a month.

Lease represents about 15 percent to 18 percent of a small company’s operational expense, the group said.  Other malls and grocery stores also charge a specific percentage from the sales of the tenant, it said.

The business group expressed hope that by the first quarter of 2017, a draft legislation would be passed to support their cause.

It said one good development was a proposal to work with Property Company of Friends Inc. for a structure that could be a community mall where tenants would be given good rates.

AFFI said despite the high rental rates, the group was optimistic of generating up to P150 billion in combined sales in fiscal year ending September 2017.

Total sales of the group in fiscal year ending September 2016 reached P107 billion, or 13.8 percent higher than P94 billion in 2015.

Employment by group members also increased 14 percent to 213,569 people from 187,434 a year ago.

The group now has 188 members. AFFI members with global presence include Aquabest, Crystal Clear, Eat Bulaga, Figaro, Fiorgelato, Goto King, Lay Bare, Mang Inasal, Potato Corner, Julie’s Bakeshop, Binalot, Ferino’s Bibingka, NASA Water, Reyes Hair Companyy International, Adobo Connection and Aquasuisse.

Among members, Potato Corner has the highest overseas market penetration rate with 119 branches worldwide.

Bartolome noted the increasing number of franchisors in the food category with 55 percent of the total members, with the rest belonging to the non-food category.

AFFI said in the food sector, 45 percent were located at in-line stores, 33 percent in kiosks while 22 percent were stand-alone shops.  In the non-food sector, 59 percent were in services and 41 percent in retail.

The 15th Franchise and Business Expo will take place on Oct. 14 to 16 at the World Trade Center.

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