FRANCHISE DEVELOPMENT PROGRAM

NANG PALANGS BUKO PIE

Trapiche, Oton, Iloilo
Members: Santolices, Leizel Jauod, Keith Abjail Agsaluna, Christine Ann Arrivas, Juvid

Strategic Planning and Program Structure A) Franchise Structure A.1 Franchise Owner Profile In 1971, Rizalina Nang Palang Malandac started out a small business venture in order to help her husband in their living. She started baking and selling various kinds of cakes and pies. She formulated her own recipes and improved them through the cook books shed read. By 1972, Nang Palang had come up with a family recipe which until now is being used exclusively by the business. At that time, she can only produce three plates of buko pies, banana cakes and cassava puddings using a single oven at a time. She would then sell these products on the city about eight kilometres away from their house. What made her small business famous and stand out from the others is her special buko pie which paved the way for the firms success. For three years, Nang Palang has received positive returns from the business. This enabled her to send her children to school and finished collegial level. Still with favourable profit, her husband stopped driving a public jeepney on 1992 and instead, helped out in the management of the business. By year 2000, after almost 29 years, Nang Palang has finally turned over the management to her daughter Elena Malandac Tingson. She then named the business after her mother and thus gave birth to Nang Palangs Buko Pie. Despite of increasing demands, Nang Palangs has

proved to be competent icon in the business scene. The enterprise produces 300 plates on average every day except if there are special orders for special occasions such as birthdays, weddings and baptisms. A.2 Type of Franchise Nang Palangs Buko Pie will offer a Single Unit Franchise for it is the most likely place a new entrepreneur would begin. In this type of franchise, the franchisee would only be responsible for running one unit. However, he or she would be extremely involved with all of the daily operations of the business. With a single unit franchise, the investment costs are less than opening up multiple units. A.3 Determination of Territory Nang Palangs Buko Pie, as Franchisor will determine the territory for the Franchisee. When the franchisee has their desired territory, then the franchisor would personally go to the area to inspect if the place fits to the business. A.4 Franchise Support Program

1. Facilities Improve the facilities of the operation to control the time that could be wasted and labor as well. 2. Packaging & Advertising Packaging must be more creative to attract customers attention. Advertise more often to the public.

3. Working Area Put up a new working area or renovating the place to make it more spacious. 4. Operating Procedure Provide the franchisee the standard operating procedure to practice and to be followed for technical support and order. 5. Training Provide free training for the employees. Basic procedures of baking pies would be thought to the franchisee. A.5 Internal Staffing Nang Palangs Buko Pie internal staffing

Manager
Elena Malandac Tingson

Administrative/ Marketing

Production

Quality Control

Selling

Ingredients Gathering / Preparation

Packaging

Baking
Weighing, Mixing, Filling and Cooking

Weighing, Mixing, and Filling

Nang Palangs Buko Pie has only eight employees. The two are assigned for the gathering and preparation of the ingredients; another two are on weighing, filling and cooking; two on the packaging and the last two are for selling. The owner, Mrs. Tingson herself, and her husband are the ones who mix the ingredients. This is to ensure the secrecy of their recipe. B) Franchise Revenue B.1 Initial Franchise Fee The Initial Franchise Fee is one hundred thousand pesos (100, 000). Advertising 10% Kiosk 40% Trademark 50% B.2 Royalties From the monthly sales, the franchisor gets 9% royalty fee that will be given monthly. B.3 Advertising The Franchisee will be required to pay 1% in the expenses for the local advertising using radio advertising, print ads and flyers.

C) Proforma Projections Nang Palangs Buko Pie Projected Income Statement For the Year Ended 2011-2014
2011-2012 2012-2013 2013-2014

Sales (45,000x30) Less: Expenses (30,000x12) Gross sales before tax Tax (180,000 x 30%) Net Profit after tax Assumptions:

540,000 (360,000) 180,000 (54,000) Php126, 00

594,000 (396,000) 198,000 (59,400) Php138, 600

653,400 (435,600) 217,800 (65,340) Php152, 460

1. 10% increase in sales and expenses per year. 2. All figures were given by the management and been legibly calculated. II Franchise Documentation A) Franchise Agreement The franchise agreement is the legal document that governs then franchisee/franchisor relationship. There is no standard format for a Franchise Agreement because the terms and conditions and operations vary from franchise to franchise and industry to industry. 1. Term of Agreement The Franchisor agreed that the term will be within three years and made to apply single unit franchise.

2. Renewal The contract is renewable every three years as what the both parties made a deal on. 3. Territory The Franchisor will be the one to prefer the location which is approved ahead by the Franchisees concern. Considering to the part of the Franchisor pointing out the fact that maybe the Franchisee select a location far from people and not accessible to reach out to. 4. Fees Initial Franchise Fee: Php100,000.00 Royalty Fee: 9% of the monthly sales 5. Training Under the training the Franchisor settled it is packaged to the initial franchise fee. And the materials and other components will be granted by the Franchisor to the Franchisee. 6. Transfer and Termination The Franchisor fixed a verdict that she will transfer the name and other aspects of the company underlying with the agreement. And the

termination will be on the said contract agreed by the Franchisor and Franchisee and if the Franchisee gives up the franchise the term must be followed due to the legal contract.

7. Dispute Resolution When disagreement comes in and it will lead to argument/debate so this cant be solved quickly. For an instance the Franchisee dont agree to the Franchisor or the Franchisor dont agree with the Franchisee its between the two parties to fix this thing as early as possible and they should follow the agreement or the contract where the both parties signed on.

III Operations Services A) Operations Visit and Review To check the stores progress, the franchisor will be having its weekly visits and review. The review was aimed at assessing the stores performance

and

present

status;

evaluating

the

strengths

and

areas

of

improvement of the products and recommending improvements in the product design and operational system.
B) Operations Manual Nang Palangs produces different kinds of products for its customers. Such products include flavoured buko pies, bibingka, cassava cake, egg pie, pineapple pie, pichi pichi, cochinta and chicken pies. Producing these foods is easy and they use human labour than machinery. It will only take about an hour and a half for the personnel to produce pies and other products.

1. Safety Safety among the workers is ensured by the management through sufficient orientation with regards to the proper use of specific equipments. The facilities are also regularly maintained to avoid untoward accidents. Appropriate safety gears are also provided.

2. Choice of Raw materials The raw materials used in Nang Palangs operations are being provided by suppliers from neighbouring towns such as Tigbauan, Guimbal and San Joaquin. The management orders bukos for a days production. Young buko meats were used. These materials will then be delivered early in the next morning. Since the firm has different suppliers, they practice an alternate scheduling wherein each supplier will have a designated date when to deliver. 3. Hygiene Staffs are required to wear aprons and hairnets to maintain cleanliness.