First Look at Suds Ad in Franchise Today

This Suds ad will appear in Franchise Today, a free, monthly publication you can get at any Figaro's, Bo's Coffee, Kitaro, Jessie Mendez Salons.

The ad was finalized after a few tests we made on the pic, headline and copy.

I was surprised by what came out on top of most people's choices. It wasn't my first personal choice but this was the concept most people responded to.

The November issue of Franchise Today will be available by November 15 in the outlets mentioned above.

Suds Marketing - Let's Go Guerilla!

This is a picture of the tarpaulin banner hanging at the Robinsons Place Imus footbridge. Imus was the first of our branches to find a suitable spot for marketing, kudos to Daniel (naunahan pa kami). At Suds Dasma, we're working with the local government to rent a space at the footbridge to display a backlit sign with a similar theme.
John and I are also exploring Tagaytay for some areas where we can do guerilla marketing (effective but cheap). Hopefully, we'll get everything set up by November.
Our thanks to Bing of Visual Fusion for a great job capturing the design we wanted.

Laundry Franchising - The Problem with Royalties

On the extreme end of royalty fees, franchisors don't collect them. At the other end, well, there could be a problem too.

Suds started in 2003. By 2005, we have had franchise inquiries but we never took them seriously because of one thing: some of our friends who franchised popular laundry franchises were unhappy with their businesses. And it had a lot to do with royalty collection.

The problem? Royalties are too high. There were instances when they had to give almost ALL net income to the franchisor. In any business, that could be a problem.

Before we understood franchise structuring, we thought that royalty payments were arbitrary. But Jojo showed us that there could be a way for a franchisee-franchisor win-win program. We thought long and hard and came with a ground breaking royalty system - a system that adapts to the gross sales level of the franchisee.

Here's what's good about it:

1. We don't collect for the first 6 months. That's the franchise customer build up stage and it's very critical for them to survive this stage.

2. We start at 3% which is way lower than what our competitors charge.

3. As the franchise's sales grow, we set up trigger points where we increase our royalties to 4% then to 5%.

4. At a certain point, when sales continue to grow, we actually LOWER our royalty percentage as an incentive for good-performing franchises.

All these took a little number-crunching. We had to base it on the projected Profit and Loss of the franchisee taking into account all the expenses first. It's not arbitrary and its main aim is to keep our franchisee happy even if they contribute royalties.

So the next time, the issue of royalties come up, prospective franchisees should not automatically label it a bad thing. Royalties should help both franchisors and franchisees if properly structured.

God Bless!

Starting a Business

I remember starting our business 6 years ago. I was inspired by Robert Kiyosaki's book Rich Dad, Poor Dad. I thought to myself, this is it, my way out of the rat race!

Fast forward 6 years and multiple bloopers, I'm still alive but man, that Rich Dad book really understated it (hahaha!). Not to take anything from that book but really, Rich Dad just tells you why, not the how. My wife and I had numerous challenges in starting a business the past 6 years. And though we experienced a lot of hard times, we would still choose the way we chose: business over employment. Our why's are all in Rich Dad. But for quick hows, especially to many of my friends looking to cross over soon, here's what I can share:

1. Build Inner Strength - Related to my blog about Giving Up is mental toughness. I don't think you can survive owning a business without developing mental toughness. And it's not about the petty problems either. It's about problems that are matters of life and death - of your business that is. Problems make you strong, there is no substitute for challenges to make you grow.

If faced with a huge problem, a technique I learned is: Don't think about the problem. That's right. Instead, think about the solution. For example, you have a money problem. Instead of thinking about what will happen to you when you don't have the money, focus your efforts on how much money you need and how you will get it. I try to visualize the exact amount I need and sooner or later, my mind gives out suggestions.

Focus on the solution.Focusing on your problems will inevitably cause anxiety. Focusing on the solution gives you a puncher's chance. Use your thoughts wisely.

You will be tested many times in your business life. If you fall, just get up and play some more. Also, you will need a good assist from above.

2. Pray like Jacob - There have been a lot of small miracles in our business life. Loans that get granted just in time, timely rebates and stuff like that. I know that no matter how hard I try, if I don't have the blessing from my God, I'd be doomed. But I also learned to pray like Jacob sometimes. That is, to knock, pound and shout to God to bless me. And to keep on knocking until He 'gives in'. I don't know if you can ever force God to give in but I do know that Jacob wrestled with an angel and did not let go until he was blessed. That sort of tenacity is needed in prayer sometimes. We are all children of God, and He blesses us. It won't hurt to be persistent as long as we know how to submit if the answer is No.

3. Choose a business with multiple markets - You are never helpless in a business. If business is slow, make sure you have a market you can woo. For example, in our laundry business, we serve mostly retail. But that didn't stop us from courting commercial accounts. Both of these markets are actually 'woo-able' but I like having the option to go out there and talk person to person to purchasing managers and get their big accounts.

Some markets are too focused on retail and walk-in customers. It would be good if your business gives you the chance to sharpen your man to man sales skills too. Which brings me to #4.

4. Learn to Sell - Most of us who came from the world of employment do not know how to sell. But selling in your store or when you are courting customers is a very important skill. And it's not hard to learn. The key is PRACTICE. Selling skills do not sprout overnight. And it is not dependent on how many books you have read. You have to go out there and sell. Be ready to be rejected, but be happy because it means you have room to improve.

The best way (and cheapest too) to practice selling in the Philippines is to join a direct-selling company. Yup. Those dreaded direct-selling companies and networking companies are actually great boot camps to get you in shape. You also get good trainings and get to watch good salesmen exhibit their skills. Join a company you believe in and stay out of 'hyping' which is actually just a form of lying. Sell softly until you get the hang of it. Build your confidence. And be sure that the sales process is successful for both ends. You have to be able to collect payment for you part. Selling is different from giving, you know.

You can also practice selling in your store. Make sure you are the receptionist on some days so you can get to know your customers.

5. Conserve Cash - One of my biggest mistakes when I started out was when I spent too much to beautify parts of my store my customer wont even see! Looking back, I wish I conserved the cash because I definitely had better use for it when we opened for business.

6. Look for the Market BEFORE you build your business - Most people look for customers after the store has been built and after the cash has been spent. Look for a business that has ready made customers waiting. If you are still looking for a business to start, take a look around. What do all these people need that you can provide for? Do you have competitors? Can your competitors copy your idea? Can you get people to be loyal to you?

7. Stick to One - In his great book: Growing a Business, Paul Hawken reminds his readers to not start multiple business at once. Just one. And put all your efforts into making that business successful. Robert Kiyosaki also advises us to put our eggs in one basket and watch that basket. I subscribe to this way of thinking and I find it better advise compared to diversification. Diversification is good advice for those who have a lot of money. If you have only 100T or even 1M, diversification will only divide your investments into mediocre parts, without real substance or promise for growth.

8. Know You are Capable - Never discount yourself. Instead, take stock at what you are good at and think of that always. Everyone can learn to be entrepreneurs. I often smile at people's comments that this person or that person is 'business-minded'. I have been introduced to 'business-minded' people who are only good at one facet and that is looking for the next opportunity. They have no focus and no sense of persistence at all.I should know, I have that streak myself!

While some of the most quiet people I know, though they don't know how to sell yet, have many ingredients that make them ready to own their businesses - they are tenacious, numbers-oriented and have enough willpower to carry the business through.

9. Choose Your Own Adventure - Businesses are as diverse as the people that own them. My experience in service and in distribution tells me I have much to learn. These two business types have different challenges and rewards (not all rewards are monetary). I think I would love to try out trading or import-export someday. Some comments:

Service - small capital needed.You meet a lot of people. Business could be prone to complaints.
Distribution - not much hassle but could need big capital to corner a market.
Trading - you can start small. Competitors can be a problem if they smell your success. You need to be innovative often.
Manufacturing - big capital needed. Marketing arm needs to be strong.

Choose a business compatible to your character. But be open to challenges of adding some skills too, especially selling. If you are contemplating going into business, don't keep a plan B when you start. Plan it well then burn the bridge. Make it your only option. I know it's scary but positive tension can do wonderful things.


Dedicated to my friends who are looking to start their own business. You can do it!
God be with you!

Recommended Books:
1. Rich Dad, Poor Dad
2. The E-Myth Revisited

10,000 Hours

10,000 hours. If you are looking to be not just good, but elite, in what you do, this is a key.

I first saw this figure in Bo Sanchez's article about fulfilling your purpose. I thought it was just some random big number until yesterday. I was browsing the Phil Star when I saw Bill Velasco's column titled: Secret of success: 10,000 hours. In that column, he outlined the study that showed how elite athletes, musicians, even criminals logged more than 10,000 hours in order to become world-class in their field.

One thing that stood out for me:
GOOD = 8,000 hours
ELITE = 10,000 hours or more.

You can read Bill Velasco's article here.

I've always wondered what makes great men great. I knew it wasn't just luck or sheer talent that pushes them. I've read stuff about how Michael Jordan used to practice hours and hours everyday to be that great. Kobe too.

But 10,000 hours...That's a big price to pay. That's like practicing 3 hours per day for 3,333 days (9.1 years). Consistently. Even on Sundays. Wow, no wonder I never got close to good at playing the guitar.

This was really a big answer for me. It tells me, there's a price to pay to shine. And that price is TIME. Time you put into whatever you do. And it tells me, I got to have a 10 year plan (or a 9.1 year plan) to be elite and if I want to be world-class at anything, I have to start now.

Putting it together, Bo says you have to:
1. Do What You Like
2. Do What You're Good At (or Excel In).

And do it for 10,000 hours.

Time to go to work!

The Strength of Franchising

Franchising is considered to be one of the best business inventions of the century. I have to agree. This year alone, Suds grew by leaps and bounds not by our effort but because of the efforts of many capable minds.

During the franchise system development, we were forced to stare at our systems and to project it so that both franchisor and franchisees will win. After all, starting up a business with hard-earned money is no laughing matter. Our consultants, especially Jojo, made sure that we understood what we were doing. I made a joke to Charm that with the work Jojo made us do, he ought to have been the one paying us! (just kidding bro, you were invaluable). Jojo made us work hard but in the end, we were happy with what we got... which was just the beginning of our job with Dee.

We asked Dee to help us clean and streamline our training materials and manuals. We never realized just how much work it takes to make a training manual. Kung wala si Dee, pupulitin kami sa kangkungan, literally. She had the ability to put the process into paper. Dee, her husband Richard and myself used to work with Intel. Looking at the body of work someone like Dee can generate, I now know how big time companies stay on top.

That's not to mention our franchisees John and Daniel who wasted no time in making Suds their own. It was touching but only up to the point where they see where we need improvement and that's when we go to work again. Thanks to them, we see how we can really make Suds grow. Their ideas are sometimes like ours, other times so far out I start to wonder how it would be if we have more than 10 franchisees?

But that's why I am so thankful. We could never have grown up so fast if these guys weren't there. If this continues, I think Suds will grow even more by next year.

All in all, I have to agree that the strength of franchising is in the relationships we form. I definitely feel that now that more capable people care about this business, God's blessings are pouring out. Though there may be more work ahead for all of us, it feels much lighter now that the load is shared.

Suds' First Franchise

4 years ago, when we were still fledgling entrepreneurs, John and I used to take coffee together and brainstorm about business. That was when we were still engineers at Intel. Suds was 2 years old then.

Fast forward four years and 400 cups of coffee, John is now a franchisee of Suds. What a twist.
I am really thankful for John to have opened my eyes to the potential of franchising. Before, I used to dismiss the idea, I thought that it will never work and I never put much thought into it. But John’s insistence caused us to consult RK (Rudolf Kotik) and he told us it could be done. Thus the franchising effort was born.

What a year!

We started working on the system late last year. We were forced to look at the numbers from all angles by our friend Jojo V. and we were thankful for that because Charm (my wife) and I finally found a way that this might work WIN-WIN for all. Jojo never allowed us to compromise and I don’t know what the reason is but I highly suspect it’s because of his Peyups (U.P. grad) blood. For that, I am thankful.

Dee Fenix was a great help in our documentation effort. I don’t know anyone with a sharper eye. Plus, she has an unbelievable work ethic (Salamat gyud, Dee!). Dee and Charm’s body of work was something I couldn’t accomplish even if they chain me to a computer for year.

The next phase was looking for a spot. The first place John wanted was the Summit Ridge at Tagaytay. We all fell in love with that place but, sad to say, something about the numbers was not in place and in the end we had to give it up.

After Summit, we tried another space but it didn't seemed to be right either. And that’s when we decided to really scout Tagaytay. It was a decision aided by God because that was when we found a very good site at the Corner Stone building (operated coincidentally by a religious group, Focolare). In the end, John, Charm and I were satisfied that this could work.

After all the preparations and trainings and coffee (kape pa please!) we finally opened on July 12. It was a happy, happy day with all the staff feeling the satisfaction of hard work bearing fruit.

Somehow, I didn’t feel it as a culmination although in some ways it us. I felt it was a start of something big – for me and Charm and hopefully for John and Malou as well. I know the four of us dedicate this effort to Him, upstairs. His hand was there to guide us.

And to John and Malou, thanks a lot for trusting us (and for the delicious home cooking!).

Now the real work begins.

-Caloy Ang

Giving Up

I was talking to a friend the other week. My friend was trying to start a new business selling office partitions. She had little background in sales and she was devastated when we talked. I asked her what was wrong and she told me she had visited 10 prospects and had not closed any deal. She was ready to quit and gave a litany of why she was such a loser and why going into this endeavor was such a bad decision.

If I haven't had any experience from Royale and Suds, I believe I would have just consoled her and encourage her to look elsewhere. But my reaction was something like: Are you kidding? Quitting after only 10 prospects?

In line with my character (as some of you have gotten to know), I told her to snap out of it. That her burden was all in her mind and that there is still a lot of room to improve. That she will close her first deal if she just works on it. It wasn't the reaction she was expecting but I believed she appreciated it.

One of the lessons I have learned for the past 6 years of trying to be an entrepreneur is that giving up so easily does more harm than good.

(Before I go further, please let me explain that this is not meant to offend those who have given up on networking. I meant to write about business life in general.)

The Quit Button - I forgot the title of the book I read a while back. But the author of that book said that everyone has a 'Quit Button'. When we were young, we didn't know what failure meant so we tried hard to stand up and walk even if we keep falling down. As we grew up, we discovered our quit button, and life got a lot easier.

Fear taught us to push the quit button more and more often until sometimes, we push it even before we take the first step.

What happens then is we stagnate. We stay were we are, always afraid to try something new for fear of failure.

Is this you? Do you give up very easily now?

The book really gave me pause and made me wonder how often I use my quit button. I realized that sometimes my fear programs do make me quit even if I didn't even fail yet. One fear I had was of being 'busted' in my panliligaws which was why I always tried to look cool to my crushes. (Buti na lang sinagot pa rin ako ni Charm.)

Is the quit button ruining our lives? I have seen many people give up on their spouses, give up on their kids, give up on their dreams, give up on their lives.

Solving the Problem - It's easy to solve the Quit Button problem: make it hard to press. If you only had one hand, place the button on your elbow.

In short, scrap Plan B. Burn the bridge!

When I decided to quit employment for good, I felt very nervous. It was like being thrown in the middle of a lake and not knowing how to swim. It was terrible! I was sometimes sure I would fail.But part of me knew it was do or die. It took me 3 months of uncertainty before I snapped out of it. Now that I had nowhere else to go, I decided to succeed in my decision. Fast forward 3 years and I'm still alive and kicking, thank God.

Now, Charm, my wife and I are in a critical point again. We know that after we decided to franchise our business, things would not be the same again. This is a bigger game now, and we could not afford to give up. Again.

Looking back, we never thought we would go this far in so short a time. There were sooo many times we felt like giving up, to sell our business and just go back to work. Or go back to Davao to recharge. I remembered times when we were on the verge of tears because of frustration and dissappointment.

Now, I'm very happy we decided to move forward. To continue believing in our goals, even though I think secretly each of us were reaching for that quit button sometimes.

The good thing is: the more you delay pushing that button, the stronger you get. I'm guessing someday, we'll learn to use the quit button wisely instead of just automatically pushing it. Of course quitting has it's uses, like when you encounter a mad dog, wag ka na lumaban, tumakbo ka na. But quitting should never be a way of life.

Keep on pursuing your dreams, guys. Whatever it may be. What's a few miles of thorns and hard rocks when you're going to a kingdom of carpets, huh? Konting tiis lang. At kung malapit na talaga niyo pindutin yung quit button, sabihin niyo, kooooooooooooooooooonti pa.

I sincerely believe God feels sad when quit. I also believe that He has given us strength to accomplish our goals through Him. But we need to rediscover the strength He has already gifted us, it's in there somewhere.

Hoping we all discover the true gems we are by not jumping out of the fires meant to purify us.

God Bless!

The Perils of Franchising

As my wife and I continue to work on our franchising system for Suds (www.suds.com.ph), I continue to learn a lot about franchising. Franchising changed the way business worked in the world. The most popular model now is called business format franchising started with Ray Kroc and McDonalds. Now, franchising is one of the most successful models driving businesses to succeed.

But, not everything is nice and rosy though (and I don't mean to be bad news bringer, I just want clarity). Franchising has its pitfalls also. Here are some we should watch out for:

1. Pseudo franchises - Also called fake franchises. These franchises are not really franchises because they just treat the initial investment as an income stream for them. One of the most common signs of pseudo franchises is (get ready): no royalty fees. You might say, "but some of Royale's franchisors don't charge royalty fees!". And you would be correct. But this problem is not limited to Royale, it is actually a big problem in the Philippine franchising industry, most especially food carts. Most food carts do not collect royalty fees as a marketing come on. This is ok if they earn enough to provide good support to the franchisee. But in most cases, even outside Royale-accredited franchises, the support is just so and so.

The problem then becomes a question of support. Since most food carts are affordable and royalty fees are not collected, the franchisor does not have enough funds to support franchisees well. This is a case of you get what you pay for.

The take home message? Please be careful when advertising No Royalty Fees. It is a double edged sword and is becoming a common practice especially in food carts.

NOTE: Some Royale franchises DO charge Royalty Fees. Examples are: Laundry Gallery, Chickco Chicken among others

2. Generic Franchise Agreements - Another common practice. You wont believe how similar some franchise agreements are to one another and this is dangerous because each business is supposed to be unique. The franchise agreement is the synthesis of the unique points tailor fitted to a specific franchise. It is a franchise's main selling point.

It takes months to formulate your own unique franchise agreement and it is dangerous to use just someone else's to save on money. As a franchisee, you need to know how the franchise fee and royalty fees are computed; what are the potential capital demands while operating, what the franchisor obligations are and how the agreement can be terminated.

The franchise agreement is the source of the sales presentation materials so make sure you read the agreement before signing.

3. Hard Selling - franchising is and will always be a relationship-based business. Thus the franchisor should make sure to screen the franchisees. A good franchisor should reject some franchise applicants. Having enough capital does not mean you can automatically be a franchisee. One interesting tip a franchisor told me is that I should not approve anyone having a much higher net worth than me, a franchisor because of the danger of spying and technology theft.

Unfortunately again, most food carts do the hard sell. And this is the reason why there is a higher proportion of food cart franchises that fail. It is either they lacked support, lacked training, lacked focus or believed that the franchisor has the sole responsibility to make them succeed. All of these are warped illusions of franchising and is tarnishing the good franchises.


So what's going on here? Am I discouraging you when I should be inspiring you? My intention is to educate always. Here are my tips when selling or presenting franchises:

1. Learn to screen franchisees - If the person you are talking to just has money but has no interest, let it go. Make sure they really have the interest and focus to franchise and run their own business. If the applicant is too strong-headed (or hard-headed), stop. It's not worth it.

2. Show both sides - let them know the good and the bad sides. Don't promise magic bullets. Remember: Sipag + Tiyaga + Systema, they need to have the required sipag at tiyaga.

3. Stay away from franchisors with bad support - applicable anywhere. The best thing to do is to talk to many franchisees. If they are satisfied, then recommend the franchise. If not, stay away.

I hope, as always, that I have helped you through my experiences. Til next time!

2009 is here, are you ready?

2009 began with a lot of challenging news for me. My former employer Intel Tech Phils. Inc. announced it's closure of the some sites, including the Philippine site. That in itself was heavy news. I had the chance to view last friday's issue of the Phil Star in the business section; it was said the the semiconductor sector is being hit hard. About 60,000 workers will be laid of in that sector alone.

I think it's now, more than ever, that Pinoys should consider learning business. Although businesses won't have walks in the park this year, owning your own enterprise, however small, can give you more options and control. Running a business will also be hard this year but unless we slow down to a depression, kikita ka pa rin.

I'm impressed with the way Royale is facing these tough times. They have just opened the Mindanao Headquarters in Davao and the office there was impressive even if smaller compared to our QC HQ. Product centers will also open in Paranaque and Tacloban soon.

Microsoft has said that the companies who spend now, even in tough times, will be the ones who will lead the way when the recession is over. I'm not sure how that translates to small businesses and I am eager to find out what the effects of Royale's actions will be.

Mr. C's decisions will embolden the leaders and members and in tough times like this, that's always a good thing. Sana nga tuloy tuloy pa ang paglaki natin.

Proud to be Royale,
Caloy Ang