Franchising seen growing to P1.3-T industry

MANILA, Philippines – A group of franchising firms in the Philippines expects the local industry to grow to as much as P1.3 trillion over the next five years, banking on resilient demand for low-capital franchises concentrated mainly in the food business.

According to Philippine Franchise Association (PFA) president Steve Benitez, there remains a “thriving” market for small franchise investments—or those priced below P1 million.

READ: Amid uncertainty, franchising pitched as stability play

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This demand has remained resilient despite the recent Middle East crisis, which Benitez had said could slow demand for franchise expansions due to high fuel and other production and input costs.

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“Despite the crisis, you’ll see that there is really that clamor to get into a business,” Benitez, also the founder of Bo’s Coffee, told the Inquirer on the sidelines of the 2026 PFA Franchisee Summit yesterday.

As such, Benitez said lower-capital franchises were expected to make up the bulk of the industry, which he projected could still grow by 8 percent to 10 percent this year even after factoring in possible spillovers from the Middle East conflict.

This would keep the industry’s 2026 growth target at the same level as last year’s projection, but below the 10-percent to 12-percent expansion recorded in 2024 and the 15-percent growth seen in 2023.

READ: Franchising sector in the Philippines seen growing 8% to 10%

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Over the longer term, Benitez said the local franchising industry could breach the trillion-peso mark, from its current estimated value of P800 billion spread across about 120,000 franchise enterprises.

The sector currently accounts for about 7.8 percent of the country’s gross domestic product and employs around 2 million Filipinos.

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Benitez, however, acknowledged another challenge facing franchise operators.

Last month, the Department of Labor and Employment approved an P85-daily minimum wage increase for workers in Metro Manila, a move major business groups had described as “very challenging.”

Asked whether the wage increase could threaten the industry’s expansion, Benitez said: “Most businesses might slow down on hiring … that might be the immediate impact.”

“We all want everybody to earn fair wages, but the government should also look at where the business people will get that,” he said, adding that employers may need some form of subsidy to balance higher labor costs.

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Despite these pressures, Benitez expressed optimism that Philippine franchise brands could still reach new heights. INQ