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!
Saturday, March 28, 2009
Monday, January 26, 2009
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
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
Monday, November 24, 2008
Royale Advisory - Christmas Celebration
Our Christmas Celebration will be on Tuesday, Dec. 16 6PM at the Metro Concert Bar.
You are invited to form a 6-12 member choir to join the Royale Christmas Carol Singing Contest with the theme: "Royale Oneness for Christmas is our Wellness".
1st audition is on Dec. 3, 4PM.
Sunday, September 7, 2008
7 Reasons Why Royale Rocks
Royale is now 2 years old and is still growing stronger. In my 10 months in this company, I have witnessed a lot of things. I truly feel that Royale is a very unique company. I heard one guy yesterday say that he thought he was allergic to networking but he felt different when Royale was presented to him, that is why he joined. I felt the same way about the company and I thought I would share some insights on what makes Royale unique. So, as your partner insider, I present to you 7 reasons why our company rocks!
---------------------------------------------------
Reason 1: Our Chairman is a Capable and Willing Traditional Businessman
Most networking companies die in the first year. Some last 2 or 3 years but that's it. One common reason is that they were founded by networkers. This is a sensitive topic since a lot of people are successful networkers. But somehow, I have observed that the networking companies that fall fail because of 2 things: Greed and Inexperience handling money. When company founders experience success and are flushed with cash, they crumble because they are not used to handling tens of millions of pesos.
Bo Sanchez has a term for this: The Psychological Wallet. If you used to handling only thousands of pesos and you are suddenly given millions, chances are you will go back to your comfort zone and will have a hard time adjusting, especially if the transition is sudden. Sudden transitions from small money to big money occur in networks; it's called MOMENTUM. When the momentum stage comes, the company suddenly gets very rich very fast.
In his 2nd year anniversary speech, Mr. Castaneda mentioned his thankfulness that the company's growth has been moderate and controlled so far. This allowed him and management to build the necessary infrastructure to support solid growth in the years ahead. This includes hiring more employees, expanding the leased spaces, building product centers and improving the products.
On the product launch last July 26, his message was simple: DO NOT BE GREEDY. It was a clear reminder to Royale's leaders to stick to what made us successful: clear, transparent leadership and the drive to help others.
Mr. Castaneda owns a lot of successful businesses. He owns Punchline, Laffline and Metro Comedy/ Concert Bars, Nomu Japanese Resto, Blooming face and body center, an STI and a 7-11(his "smallest" business costing 15M to build). He also owns a lending company. He is a financial analyst by profession. And he earns somewhere between 300-500T per night according to the leaders.
I believe Mr. Castaneda is dead serious about making Royale a big success. He has the capacity and willingness to do it. He is in it for the long term and he definitely has the experience in handling money. Royale earned 50M last year and is on track to earn 100M this year.
So my friends, I think we are in good hands here. Let's continue to pray that Mr. Castaneda remains steadfast in his aim to help Pinoys become financially well.
------------------------------------------------------------------
Reason 2: Builders, not Recruiters
There are 2 types of successful networkers: recruiters and builders. Only one of these experience true passive, residual income.
Let's tackle the Recruiter first. This guy is smooth, he talks very well and can sell anything. Once you join his network, he only has one recommendation for your plan of action - invite, invite, invite. Because of his inherent skills, he can build his network very fast. His earnings grow big, fast. But just like a field of cogon grass, they are shallow-rooted and die out at the first test of heat. When his network dies, he jumps ship and joins another network repeating the cycle. His downlines are left high and dry. And most of the time, he is the only one who earned big.
In my opinion, Recruiters are the reason why network marketing has such a stigma in our country. Two weeks ago, I had the opportunity to present Royale to a veteran networker who prided himself in being a leader. I was excited because it meant we will be talking the same language. His first question was: :Will you give downlines in both left and right groups? My internal answer was: This guy is crazy (recruiter, recruiter, recruiter).
Guys like him belong to an old breed of networkers. They want to get rich quick and don't have the patience of building a network of new relationships. For them, networking is a cold-blooded business. Since they are already 'tested', companies should buy their services to seed their networking. They are also known as Junkies, networkers who have no loyalty and jump from ship to ship.
Contrast that to the Builder. Builders take their time to develop the people they sponsor. They believe that Slow is Fast and Fast is Slow. Their plan of action is TRAIN first before DOING. Doc Butch is an example of a Builder. He once told me that networking is like planting Mangoes. There is a cycle: Plant - Nurture - Harvest. People always seem to forget the nurturing part. Recruiters follow the Plant - Harvest scheme (Munggo yun, hindi Mangga).
Builders' networks seem slow at first because each person sponsored, if willing, get to train. But networks like this are deep-rooted and can weather storms. Some people do fall off but here, in this system, a lot of leaders emerge.
And that is the key. Once you train and help enough people, the success follows. They bloom, you bloom with them. That is the forgotten essence of networking and the source of true, long-lasting passive income.
And if you look around Royale, you can't see a lot of old, 'popular' networkers. In fact, some old networkers tried it but found the growth too slow. If you look around the main office, most active members are new blood leaders who have embraced networking as it should be: a legitimate, relationship-centered business. There's nothing quick about it because it takes time to build leaders.
Most of Royale's leaders (Pres Juluis, Doc Butch, Jay, Elmer, Ariel, Maam Grace, Karen etc.) came from a company called I-Gen Portal. It was a networking company that lasted for only about a year before bickering weakened it's foundations (see reason #1). I heard that Royale's leaders were the loyalists to I-Gen. They never wanted to leave their downlines behind until the doors closed on them. I personally asked Doc what his commitment to Royale is and his answer was: "Hanggang padlock ako dito." If he is in for the long haul, I'm also in for the long haul.
Builders - these are the kinds of leaders our company is built on. I know most of you don't know them personally yet. I am hoping that through my blogs and emails you will understand them more and see what I see in them.
On my part, my commitment to you is: Hanggang padlock din ako. Walang iwanan!
----------------------------------------------------------------------------------
Reason 3: The Three-Pronged Attack
To start of this article, let me quote a book titled Law of Leverage by Rane Panaligan, a CPA:
"...Micro-franchising, home-based businesses and network marketing are the most viable alternatives and wealth-building mediums to survive the economic world." p.26
This book was first published 2004, 2 years before Royale was formed and yet if you read it, you will find that the 3 alternatives for small and medium enterprises are all present in Royale. This is no coincidence. Our Business Club is a well thought out, 3-pronged approach to present viable businesses for first time entrepreneurs.
We got Franchising, Direct Selling (a home based biz) and Networking options that can be done independently or at the same time.
Some people (members included) have the mistake of labelling Royale as a Networking company. While that is true, I think what they mean is that it is a Networking company ONLY. And that, is definitely NOT TRUE.
How different are we from pure networking companies? I had the pleasure of talking to networkers from AIM Global (networkers of the Alive brand) last friday. After the presentation, I only had one question to them: Can you present your company to cooperatives? Their answer was no, probably not.
Even though networking could be a good business to start, a lot of people have mistaken concepts about it. This is the reason why you cannot bring networking concepts to coops anymore. They hate it. I know because I have presented to many coops already and they always warn me that they dont accept networking opportunities anymore. But...
Take Royale to cooperatives and say this to the cooperative board of directors: We are from Royale Business Club and we would like to partner with your coop in providing livelihood/ micro businesses to your members. Present the RBP WITHOUT presenting the networking. Just the Franchises up to the Finder's Fee and Royalty Income. You will be surprised by the positive reaction of most coops to this.
The reason is most coops earn by lending to members. If the coop becomes a Business Club member and the coop members avail of coop loans to buy Royale franchises, the coop generates 3 incomes: 1. from the business loan interest, 2. from the Finder's Fees, 3. from Royalty Incomes of the franchises.
This is my proof that Royale is a chameleon. You can change the way you present it to suit your audience. A grocery or drugstore owner might be more receptive if you focus on the products. Conservative people might only want to franchise.
My point is this: Just because there is a networking option in the business club, it does not mean ALL members need to network to earn.
This means that what we really have are 3 weapons for income. A good friend of mine, Rolly Pagaspas put it this way: your franchise is a traditional business, your dealership is your distribution business you can do on the side and he calls networking "Sharing The Concept" - a business you can carry inside your pocket.
This is what makes the Royale concept unique. We got all the ingredients to succeed as entrepreneurs.
To end, let me quote from another book - Robert Kiyosaki's Retire Young, Retire Rich (p.295)
"If you are serious about retiring young, begin studying the different types of income, which will allow to become rich without working forever. Some of the other types of income are:
1. Residual income, which is income from a business, such as a network marketing business or a franchise business you own but someone else run...." (underlines are mine)
In short, mag Royale na kayo! We are on the right track.
---------------------------------------------------------
Reasons 4 and 5: Product and Franchise Innovation
This was supposed to be 2 articles but I thought the line of thinking was too similar so I bundled it together.
Product Innovation - When I became part of Royale September 2007, the Glutathione product was in its second revision. It was placed on smaller (and uglier compared to the current) plastic bottles and was soon replaced by blister packs in a box. Those had problems when exposed to heat because the aluminum in the blister pack heated the capsules which turned yellowish-brown.
Royale hired Lollie Sarmiento, and ex-Splash Corporation product developer who recommended most of the improvements in the packaging.
The result was a better plastic bottle package, better labels, Halal approval plus the Angelica endorsement. The rest of the products followed suit.
Now, the best selling Gluta Soap as well as the Kojic soap package was revamped to have plastic instead of the paper packaging. Also, the newest coffee product has packaging that can rival Nescafe or San Mig.
One thing that I like about the company is it's eye for continuous innovation. They never seem to rest, always churning out new ideas on how to make the products more saleable. They are also open to suggestions on how to improve some more.
Franchise Innovation - To sum it up: No Franchise fees, no royalty fees, no renewal fees. Most of Royale's franchises started as unknowns and so they had to innovate to get noticed by the market.
To do this, they removed most of the fees that standard franchising charges and instead offered the franchises as an all-in package. This simplified version was easier to understand for the new micro-business owner and help fuel Royale's franchising success.
However, based on my research into franchising, not charging royalty fees could be a double-edged sword to the franchisor as this severely limits his cash flow. I think that as more and more people know the Royale brands, the franchisors will introduce small royalty fees (e.g. Chickco Country Chicken now charges P1000/ month royalty fees).
At this point, I can see some franchisors already improving their offerings. JCFran has released The Noodle House HongKong Style noodles. While not yet officially a franchise carried by the Royale Business Club, JCFran proves that innovation is at work in their company.
Chickco Country Chicken also has recently hired Francorp to improve its franchise structure and also introduced financing plans for their new franchisees.
The spirit of innovation is evident in our products, franchises and IT systems. I am hoping that the company can improve and react fast enough to adapt to the challenges. But as for the past year I have been on board, I could say that the management of Royale never rests with their achievements. They are always pushing forward. And that is always a good sign.
--------------------------------------------------------------------------------
---------------------------------------------------
Reason 1: Our Chairman is a Capable and Willing Traditional Businessman
Most networking companies die in the first year. Some last 2 or 3 years but that's it. One common reason is that they were founded by networkers. This is a sensitive topic since a lot of people are successful networkers. But somehow, I have observed that the networking companies that fall fail because of 2 things: Greed and Inexperience handling money. When company founders experience success and are flushed with cash, they crumble because they are not used to handling tens of millions of pesos.
Bo Sanchez has a term for this: The Psychological Wallet. If you used to handling only thousands of pesos and you are suddenly given millions, chances are you will go back to your comfort zone and will have a hard time adjusting, especially if the transition is sudden. Sudden transitions from small money to big money occur in networks; it's called MOMENTUM. When the momentum stage comes, the company suddenly gets very rich very fast.
In his 2nd year anniversary speech, Mr. Castaneda mentioned his thankfulness that the company's growth has been moderate and controlled so far. This allowed him and management to build the necessary infrastructure to support solid growth in the years ahead. This includes hiring more employees, expanding the leased spaces, building product centers and improving the products.
On the product launch last July 26, his message was simple: DO NOT BE GREEDY. It was a clear reminder to Royale's leaders to stick to what made us successful: clear, transparent leadership and the drive to help others.
Mr. Castaneda owns a lot of successful businesses. He owns Punchline, Laffline and Metro Comedy/ Concert Bars, Nomu Japanese Resto, Blooming face and body center, an STI and a 7-11(his "smallest" business costing 15M to build). He also owns a lending company. He is a financial analyst by profession. And he earns somewhere between 300-500T per night according to the leaders.
I believe Mr. Castaneda is dead serious about making Royale a big success. He has the capacity and willingness to do it. He is in it for the long term and he definitely has the experience in handling money. Royale earned 50M last year and is on track to earn 100M this year.
So my friends, I think we are in good hands here. Let's continue to pray that Mr. Castaneda remains steadfast in his aim to help Pinoys become financially well.
------------------------------------------------------------------
Reason 2: Builders, not Recruiters
There are 2 types of successful networkers: recruiters and builders. Only one of these experience true passive, residual income.
Let's tackle the Recruiter first. This guy is smooth, he talks very well and can sell anything. Once you join his network, he only has one recommendation for your plan of action - invite, invite, invite. Because of his inherent skills, he can build his network very fast. His earnings grow big, fast. But just like a field of cogon grass, they are shallow-rooted and die out at the first test of heat. When his network dies, he jumps ship and joins another network repeating the cycle. His downlines are left high and dry. And most of the time, he is the only one who earned big.
In my opinion, Recruiters are the reason why network marketing has such a stigma in our country. Two weeks ago, I had the opportunity to present Royale to a veteran networker who prided himself in being a leader. I was excited because it meant we will be talking the same language. His first question was: :Will you give downlines in both left and right groups? My internal answer was: This guy is crazy (recruiter, recruiter, recruiter).
Guys like him belong to an old breed of networkers. They want to get rich quick and don't have the patience of building a network of new relationships. For them, networking is a cold-blooded business. Since they are already 'tested', companies should buy their services to seed their networking. They are also known as Junkies, networkers who have no loyalty and jump from ship to ship.
Contrast that to the Builder. Builders take their time to develop the people they sponsor. They believe that Slow is Fast and Fast is Slow. Their plan of action is TRAIN first before DOING. Doc Butch is an example of a Builder. He once told me that networking is like planting Mangoes. There is a cycle: Plant - Nurture - Harvest. People always seem to forget the nurturing part. Recruiters follow the Plant - Harvest scheme (Munggo yun, hindi Mangga).
Builders' networks seem slow at first because each person sponsored, if willing, get to train. But networks like this are deep-rooted and can weather storms. Some people do fall off but here, in this system, a lot of leaders emerge.
And that is the key. Once you train and help enough people, the success follows. They bloom, you bloom with them. That is the forgotten essence of networking and the source of true, long-lasting passive income.
And if you look around Royale, you can't see a lot of old, 'popular' networkers. In fact, some old networkers tried it but found the growth too slow. If you look around the main office, most active members are new blood leaders who have embraced networking as it should be: a legitimate, relationship-centered business. There's nothing quick about it because it takes time to build leaders.
Most of Royale's leaders (Pres Juluis, Doc Butch, Jay, Elmer, Ariel, Maam Grace, Karen etc.) came from a company called I-Gen Portal. It was a networking company that lasted for only about a year before bickering weakened it's foundations (see reason #1). I heard that Royale's leaders were the loyalists to I-Gen. They never wanted to leave their downlines behind until the doors closed on them. I personally asked Doc what his commitment to Royale is and his answer was: "Hanggang padlock ako dito." If he is in for the long haul, I'm also in for the long haul.
Builders - these are the kinds of leaders our company is built on. I know most of you don't know them personally yet. I am hoping that through my blogs and emails you will understand them more and see what I see in them.
On my part, my commitment to you is: Hanggang padlock din ako. Walang iwanan!
----------------------------------------------------------------------------------
Reason 3: The Three-Pronged Attack
To start of this article, let me quote a book titled Law of Leverage by Rane Panaligan, a CPA:
"...Micro-franchising, home-based businesses and network marketing are the most viable alternatives and wealth-building mediums to survive the economic world." p.26
This book was first published 2004, 2 years before Royale was formed and yet if you read it, you will find that the 3 alternatives for small and medium enterprises are all present in Royale. This is no coincidence. Our Business Club is a well thought out, 3-pronged approach to present viable businesses for first time entrepreneurs.
We got Franchising, Direct Selling (a home based biz) and Networking options that can be done independently or at the same time.
Some people (members included) have the mistake of labelling Royale as a Networking company. While that is true, I think what they mean is that it is a Networking company ONLY. And that, is definitely NOT TRUE.
How different are we from pure networking companies? I had the pleasure of talking to networkers from AIM Global (networkers of the Alive brand) last friday. After the presentation, I only had one question to them: Can you present your company to cooperatives? Their answer was no, probably not.
Even though networking could be a good business to start, a lot of people have mistaken concepts about it. This is the reason why you cannot bring networking concepts to coops anymore. They hate it. I know because I have presented to many coops already and they always warn me that they dont accept networking opportunities anymore. But...
Take Royale to cooperatives and say this to the cooperative board of directors: We are from Royale Business Club and we would like to partner with your coop in providing livelihood/ micro businesses to your members. Present the RBP WITHOUT presenting the networking. Just the Franchises up to the Finder's Fee and Royalty Income. You will be surprised by the positive reaction of most coops to this.
The reason is most coops earn by lending to members. If the coop becomes a Business Club member and the coop members avail of coop loans to buy Royale franchises, the coop generates 3 incomes: 1. from the business loan interest, 2. from the Finder's Fees, 3. from Royalty Incomes of the franchises.
This is my proof that Royale is a chameleon. You can change the way you present it to suit your audience. A grocery or drugstore owner might be more receptive if you focus on the products. Conservative people might only want to franchise.
My point is this: Just because there is a networking option in the business club, it does not mean ALL members need to network to earn.
This means that what we really have are 3 weapons for income. A good friend of mine, Rolly Pagaspas put it this way: your franchise is a traditional business, your dealership is your distribution business you can do on the side and he calls networking "Sharing The Concept" - a business you can carry inside your pocket.
This is what makes the Royale concept unique. We got all the ingredients to succeed as entrepreneurs.
To end, let me quote from another book - Robert Kiyosaki's Retire Young, Retire Rich (p.295)
"If you are serious about retiring young, begin studying the different types of income, which will allow to become rich without working forever. Some of the other types of income are:
1. Residual income, which is income from a business, such as a network marketing business or a franchise business you own but someone else run...." (underlines are mine)
In short, mag Royale na kayo! We are on the right track.
---------------------------------------------------------
Reasons 4 and 5: Product and Franchise Innovation
This was supposed to be 2 articles but I thought the line of thinking was too similar so I bundled it together.
Product Innovation - When I became part of Royale September 2007, the Glutathione product was in its second revision. It was placed on smaller (and uglier compared to the current) plastic bottles and was soon replaced by blister packs in a box. Those had problems when exposed to heat because the aluminum in the blister pack heated the capsules which turned yellowish-brown.
Royale hired Lollie Sarmiento, and ex-Splash Corporation product developer who recommended most of the improvements in the packaging.
The result was a better plastic bottle package, better labels, Halal approval plus the Angelica endorsement. The rest of the products followed suit.
Now, the best selling Gluta Soap as well as the Kojic soap package was revamped to have plastic instead of the paper packaging. Also, the newest coffee product has packaging that can rival Nescafe or San Mig.
One thing that I like about the company is it's eye for continuous innovation. They never seem to rest, always churning out new ideas on how to make the products more saleable. They are also open to suggestions on how to improve some more.
Franchise Innovation - To sum it up: No Franchise fees, no royalty fees, no renewal fees. Most of Royale's franchises started as unknowns and so they had to innovate to get noticed by the market.
To do this, they removed most of the fees that standard franchising charges and instead offered the franchises as an all-in package. This simplified version was easier to understand for the new micro-business owner and help fuel Royale's franchising success.
However, based on my research into franchising, not charging royalty fees could be a double-edged sword to the franchisor as this severely limits his cash flow. I think that as more and more people know the Royale brands, the franchisors will introduce small royalty fees (e.g. Chickco Country Chicken now charges P1000/ month royalty fees).
At this point, I can see some franchisors already improving their offerings. JCFran has released The Noodle House HongKong Style noodles. While not yet officially a franchise carried by the Royale Business Club, JCFran proves that innovation is at work in their company.
Chickco Country Chicken also has recently hired Francorp to improve its franchise structure and also introduced financing plans for their new franchisees.
The spirit of innovation is evident in our products, franchises and IT systems. I am hoping that the company can improve and react fast enough to adapt to the challenges. But as for the past year I have been on board, I could say that the management of Royale never rests with their achievements. They are always pushing forward. And that is always a good sign.
--------------------------------------------------------------------------------
Reason 6: The People That You Meet Each Day
The transformation from anti-networking to pro-networking was a hard one for me. I still couldnt believe I lasted this long (1 year on Sep 9!) and yet the longer I stay, the more open-minded I have become.
I have met a lot of curious characters in Royale and I would like to introduce you to some of them.
There's Ate Lorna, the once hardware saleslady who now owns 3 Galaxy Burger carts. She used to be so shy because of her speech impediment but now, looking at her give presentations to many people makes me smile.
If Ate Lorna had a speech impediment, Abe's got it worse. Abe stutters and can't say anything straight. Hearing Abe stutter his way to a testimony in the PEC about how he got his cheque gave me pause. How can a guy who talks like Abe gather the guts to present - and succeed?
There's Ate Darly, ang Reyna ng Benta. She's a sweet 50 something year old government employee who likes to grab my elbow when she talks to me. Who whould know this lady earns 6 figures a month selling soap? :-)
Doc Butch just bought his dream car, a BMW Z4. He was already rich before he started networking. But looking at him work puts me to shame. I have seen this guy take 'lunch' at 7PM and for the past year, has seen him work to exhaustion. He owns 3 businesses but still works like a blue-collar worker.
Tony is one of the top 3 Distributors for Smart in Cavite. He turns over at least 30M worth of load each month, became a millionaire through Smart at the age of 22 (he made his first million in 3 months swapping sim packs back then). But he is one of the most humble guys I have ever met. He is also one of the leaders of Royale's Dream Team.
And you partners, I have enjoyed meeting and working with each and everyone of you. Meeting you really expanded my heart and mind.
Networking is a hard business because you deal with people but it's also a great business because of great people.
One thing that has cemented itself into my philosophies for the past year is that you make your own destiny. The people I have met didnt meet success in their first try. They too were rejected just like the rest. They were just mentally tougher.
I am now sure that God wants us to be prosperous. But we have to give something from our end. As Jay Ocampo says: God is a Multiplier. In the story of Elijah, the prophet asked the widow what she has left in her possession. She said she had some oil left. Elijah told her to borrow jars from her neighbors and from what little oil that was left, God multiplied it til all the jars were full.
Being with people like Abe the stutterer cements my belief that God indeed is a Multiplier. Abe took what little he has and gave it his all and he has success to show for it.
Looking at him makes me look at myself and find those little drops of oil that He can multiply. The people we meet makes us reflect on ourselves. Hopefully, they will continue to reflect what's good in all of us.
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Reason 7: Entrepreneurship 101
People who dismiss Royale as just a networking company miss an important point. Royale offers a chance for you to hone your business skills, especially those who don't have any business experience. Let me elaborate.
Networking = Traditional business? - I have been in the 'traditional' business of laundry and dry cleaning for 5 1/2 years now. The skills I needed to survive that long were: mental toughness, belief in one's self, marketing and basic math. I always say to my partners that business is just a reflection of you. Whatever your core beliefs are, they show up in your business. If you think 'pang small time ka lang' then you will never go big time.
What does this have to do with networking and Royale? Well, for one, it takes much much more mental toughness to build your own network than to build your own small business. The reason is, you expose yourself to more chances of rejection in networking compared to just being in your shop.
The same thing goes for marketing and belief in yourself. As I see it, networking is a springboard for people to develop critical business skills.
Businesses within the business - Another good thing about Royale is that there are opportunities that abound inside the club to do you own business. Consider this: you are a member of a club that contains THOUSANDS of business-minded people. What do they need???
1. Can you print marketing materials on tarpaulin and flyers and resell these to business club members?
2. Can you look for potential locations for franchises and make your own survey and sell these for a fee to potential franchisees?
3. Can you offer your own specialty entrepreneurship trainings to franchisees? How about technology-enhanced services on the web? Or the mobile phone???
4. How about if you talk to franchisors and offer logistical support in the provinces. You can act as the hub where they drop off their supplies and you deliver to franchisees in that province.
These are just ideas I got off the top of my head and of course we will need to really scrutinize the details but there's a lot of stuff we can cook up if we just get creative.
The thing is, Royale is all about creating the entrepreneur in you. Open your eyes and see that it's not just about networking. It's a goldmine of opportunities to practice business.
Sunday, May 18, 2008
Royale Celebrates 2nd Anniversary
May 17, 2008 at Crossroads 77:
Thousands of members celebrated the business club's 2nd anniversary. It was a joyous occasion with lots memorable and enjoyable moments. Among them:
The Prayer - I very rarely hear applause after a prayer. This one gave me goose bumps. It was unrehearsed but went straight to our hearts. I guess a lot of us felt it because a lot of us clapped. We clapped for our Ultimate Upline - God.
The Chairman Speaks - it was clear that he enjoyed the day as much as the members did. The usually reserved Mr. C spoke with vigour about Royale's plans for the future. What resonated to me during his talk was that he was thankful that Royale did NOT grow that fast which was the reason why the team was able to manage the foundation solidly instead of being rushed. Spoken like a true businessman.
Senate President Manny Villar is the Keynote Speaker - I'd like to blog more about this later. But one thing I am sure of is that if he runs for President, I'm voting for him.
3 Guys buy BMW's - I personally knew all three of them. But I was brought to tears during Jay's story. To most people, Jay is the comedian of the Phoenix Leaders. But nobody really expected his story to be so sad (but Jay, even if he was crying still managed to joke about it). Many times, he said he had to meet clients at a fastfood restaurant. One time, he waited til his client had ordered before he went inside so that he wouldn't be forced to buy food because he had no money and worse, he was hungry. So when his client invited him to eat, he said no thanks he was full. But suddenly, his stomach growled and the client asked: "Akala ko ba, busog ka?" Jay's reply: "Opo, acidic lang po ako."
He also told the story about being a safety shoe salesman and having his delivery of shoes scatter all over the bus when the driver braked hard. People were laughing at him and he felt so sorry for himself.
He tried so hard to succeed in Royale. His code was NO EMOTIONS when he was rejected. His reason was simple, he had no time to be offended, he had a family to feed.
I know Jay. I know he has a strong faith in God and in people. He showed his love for his wife by calling her to the stage.
I couldn't be more proud of a triumph of a friend and a good person. Mabuhay ka, Jay!
Anton Diva is a Guy - Now, for some comic relief. This guy sang like Regine Velasquez. He really sounded and looked like a woman. So when he said, in a deep, deep voice after singing: "Wala ba kayong mga kamay?" everyone laughed. He even invited another guy on stage and sang to him and teased him with a dare for a nose to nose. I kept shouting: "Dude, lalaki yan, don't forget!!!!" because the guy seemed to forget.
Pres Juluis presented the upcoming products - Man! we are in for a good year. There were a lot of exciting updates. An anti-ageing cream, an 8-in-1 coffee to be manufactured by Kraft (makers of the Maxwell House brand), a supplement for diabetics, new improved packaging for the best-selling Gluta and Kojic soaps, Fit and Trim will be redesigned and renamed to FitShape, Fiberich - a fiber supplement for the colon. These will be launched by July 26, 2008.
Plus, more effort will be focused now in advertising in the tri-media of TV, Radio and Print so that Royale Wellness and Royale Beauty will become household brands.
Pres urged us again to clap for God. I clapped til my hands hurt.
All in all, it was a good anniversary celebration. According to Pres, 2 years pa lang tayo, umpisa pa lang to!
God Bless!
Thousands of members celebrated the business club's 2nd anniversary. It was a joyous occasion with lots memorable and enjoyable moments. Among them:
The Prayer - I very rarely hear applause after a prayer. This one gave me goose bumps. It was unrehearsed but went straight to our hearts. I guess a lot of us felt it because a lot of us clapped. We clapped for our Ultimate Upline - God.
The Chairman Speaks - it was clear that he enjoyed the day as much as the members did. The usually reserved Mr. C spoke with vigour about Royale's plans for the future. What resonated to me during his talk was that he was thankful that Royale did NOT grow that fast which was the reason why the team was able to manage the foundation solidly instead of being rushed. Spoken like a true businessman.
Senate President Manny Villar is the Keynote Speaker - I'd like to blog more about this later. But one thing I am sure of is that if he runs for President, I'm voting for him.
3 Guys buy BMW's - I personally knew all three of them. But I was brought to tears during Jay's story. To most people, Jay is the comedian of the Phoenix Leaders. But nobody really expected his story to be so sad (but Jay, even if he was crying still managed to joke about it). Many times, he said he had to meet clients at a fastfood restaurant. One time, he waited til his client had ordered before he went inside so that he wouldn't be forced to buy food because he had no money and worse, he was hungry. So when his client invited him to eat, he said no thanks he was full. But suddenly, his stomach growled and the client asked: "Akala ko ba, busog ka?" Jay's reply: "Opo, acidic lang po ako."
He also told the story about being a safety shoe salesman and having his delivery of shoes scatter all over the bus when the driver braked hard. People were laughing at him and he felt so sorry for himself.
He tried so hard to succeed in Royale. His code was NO EMOTIONS when he was rejected. His reason was simple, he had no time to be offended, he had a family to feed.
I know Jay. I know he has a strong faith in God and in people. He showed his love for his wife by calling her to the stage.
I couldn't be more proud of a triumph of a friend and a good person. Mabuhay ka, Jay!
Anton Diva is a Guy - Now, for some comic relief. This guy sang like Regine Velasquez. He really sounded and looked like a woman. So when he said, in a deep, deep voice after singing: "Wala ba kayong mga kamay?" everyone laughed. He even invited another guy on stage and sang to him and teased him with a dare for a nose to nose. I kept shouting: "Dude, lalaki yan, don't forget!!!!" because the guy seemed to forget.
Pres Juluis presented the upcoming products - Man! we are in for a good year. There were a lot of exciting updates. An anti-ageing cream, an 8-in-1 coffee to be manufactured by Kraft (makers of the Maxwell House brand), a supplement for diabetics, new improved packaging for the best-selling Gluta and Kojic soaps, Fit and Trim will be redesigned and renamed to FitShape, Fiberich - a fiber supplement for the colon. These will be launched by July 26, 2008.
Plus, more effort will be focused now in advertising in the tri-media of TV, Radio and Print so that Royale Wellness and Royale Beauty will become household brands.
Pres urged us again to clap for God. I clapped til my hands hurt.
All in all, it was a good anniversary celebration. According to Pres, 2 years pa lang tayo, umpisa pa lang to!
God Bless!
Friday, March 14, 2008
Six Suggestions When Hiring Your First Employee
Now that some of you have already committed to owning a franchise, I’d like to offer some practical suggestions in hiring employees that will not only make the work easier for you, they’ll help grow your business.
Charm and I have had some good and bad experiences in the hiring process. We have hired keepers and we have also hired pilferers and thieves. Hiring should not be guess work and I am hoping that by sharing what we have learned, you can hire good employees to man your franchises.
In hiring, I now follow a rule I learned from a book: Hire Slowly but Fire Quickly.
I find this rule very practical. In one instance, we did not fire an employee quick enough which was why that employee was able to pilfer more than she should have. Some other things to consider:
Give an IQ Test – not to hire geniuses but to look at the distribution of your applicants’ intelligence levels. There are IQ tests you can get from books. Make sure that the IQ test is general in nature and not focused on just one section like math or spatial reasoning (but it depends on what you are hiring for, I’m assuming this is for a food cart only). From my experience, applicants in the average IQ range turn out ok. I try not to hire those at the bottom and I always look for smart people because smart people with good hearts are simply put, the best there is (more on good hearts later). Also, let them do math without calculators because there will be a lot of addition and subtraction during store operations. Just the basic, no algebra stuff.
Look at the resume’s and biodata – and look for applicants who care about their applications. I don’t even read incomplete biodatas, those without specific dates. If they don’t care enough to fill up information correctly, then they are not worth hiring. Also, look at how long they have served in their jobs. Good employees usually last longer than 1 year at a certain job. While there may be a lot of contractual lately (jobs lasting 5-6 months), try to see if they have been renewed which is a good sign. Also, look for and ask about gaps in between jobs. Why were there gaps? Was it because they found it hard to look for jobs or because of other stuff? If other employers turned them down, ask them why. Also, require NBI and local police clearances always. Baka si Osama yang na-hire mo, eh di mayaman ka na.
Interview properly – In an interview, my goal is to make the interviewee feel at home and comfortable. I am not that particular about questions that they can make perfect answers to. I ask them stuff about employment, usually about their last job. But I also ask them about their daily routines. For example: A kid I interviewed watched a lot of TV which for me was a red flag. When I asked this kid to do an OJT, I was right, she wasn’t able to focus and got bored easily. Don’t just ask questions, get to know the person. Look at the person in the eye when talking, honest people usually can look right back. Look at their body language, are they too tense? You need calm people who can take customer complaints in stride.
Always do a hands-on test – IQ’s and good interviews do not compare to the information that you get when the person is actually on the job. You will see how fast they learn, how they interact with customers and other employees and most important of all, you will see who has initiative. A lot of good interviewers fall flat when it comes to initiative. In fact, more than 70% of potential candidates after testing and interviewing seem not so good after all once you tried them out. Try outs can usually last 1 to 2 days.
Some stuff I have observed – these are not meant to be generalizations, these are just based on my experiences. Feel free to test them.
1. Single moms are hard workers. I salute single moms, some of my most hardworking employees are single mothers.
2. Women generally are more diligent than men. Ewan ko ba.
3. Employees below 25 years are just too young. Some of them are good but they could be diamonds in the rough, but you have to spend some time polishing them. They have too many distractions going on.
4. Employees above 40 could be so hard wired already. In short matitigas na rin ang ulo. May sariling style na. Ayaw paturo.
5. Employees who respond to your text messages to confirm appointments are good candidates. You need guys who are responsive to you as their boss.
6. Look for leadership experience in college and in work.
And.. fire quickly - If you find your employee stealing or doing something that erodes your trust, replace him quickly. If there is suspicion, act quickly and investigate. Always be ready to lose an employee. DO NOT BE DEPENDENT on one single employee. Know the ins and outs of your business so that you will not be crippled if you lose a key employee.That’s it for now. I hope I was able to help those who are already planning to operate their carts. More blogs to come!
God Bless!
Caloy
Friday, February 29, 2008
5 Stages of Truly Successful Networking
Even though networking is hard to do, it’s potential as a business remains attractive to people who want to start up a good business with little start up capital.
We usually hear about the ‘extraordinary’ earnings of some people in network marketing. I previously thought it was all hype until I joined Royale last September 2007. When I joined, the biggest weekly check earned was just around P100,000 (in one week). Now, the record check is P390,000 for 1 week’s earnings held by Ariel De Leon.
These earnings may seem insane for most people, myself included ( I admit, these figures are still way, way above my “psychological wallet “) but I quickly found out among those used to networking that these are actually normal and expected.
I have no questions why network marketing can pay so big. The mechanism of removing middlemen from distribution generates big profits for a networking company (as much as 70% of the prices of goods go to middlemen such as supermarkets etc.). The profits are then distributed instead to the consumer-members.
But to learn about the income in networking is one thing. Trying to earn the big income from network marketing is another story. In the months that I have been doing this business, I did nothing but observe the top earners. At first I could see some obvious traits that separate them from most people but I suspected there was a deeper secret to doing this business. Based on inputs from the Phoenix leaders and other successful networkers, I now know there is. Here is what I have learned so far:
Stage 1 – Before You Join
Choose a good company – one where you can be comfortable endorsing the product because after all, you’ll be sponsoring friends and most of those who will join do so because they trust you.
Know who runs the show – I learned that a lot of network marketing companies fold because the owners and founders themselves are not used to earning millions. Some go corrupt while others just melt from the challenge. Make sure the owner knows how to do business.
Know the Uplines – Uplines are your guide. If the top earners in your company are no longer accessible, you might as well forget it. One reason I joined Royale was the attitude of the Phoenix leaders, particularly Doc Butch. Now, 5 months in, he treats my new downlines like old friends and it’s a great plus to have someone of that calibre mentor you and your team.
Stage 2 – Just after Joining
Decide – Most people get burned in this business because they skip this first step which for me is the most important of all. In Paolo Coelho’s book, The Alchemist, someone said to Santiago, a boy searching for a lost treasure that ‘if you really want it, the universe will conspire to help you”. There is something about being 100% decided to do networking, it helps you through the toughest part which is unfortunately the first part.
Know What to Expect – If you were a boxer in a 12-round match and your coach told you that your opponent will land jabs from the 1st to the 9th round and that you would get hurt but won’t be knocked out and that if you are still standing you’ll land some big blows from the 10th to the 12th and will win the match, will you follow the fight plan and still fight?
The nature of network marketing follows time compounding in which the longer you stay in, the better it gets (assuming you ARE pouring effort building your network). You usually don’t feel the effects of good income until around 6 months of doing the business. But when you start earning substantially, the income increases pretty fast. You just have to ride the challenge of the first few months and keep punching.
Build Your Foundation – When starting, it is advisable not to do anything yet. The first step should be to learn how to do the business – TRAIN. Some view it as a waste of time but leaders view it as a building your foundation. Training does not have to be formal. It could be as simple as meeting your upline often (1x/wk) and letting him or her guide you what to do.
Build your presentation materials. Attend good presentations all the time. Absorb everything first because you will need every ounce of information you get to build your people network.
Dedicate Your Effort – This business really needs mental toughness and perseverance. I discovered a secret that keeps me going: It helps if you dedicate the effort for someone or something that will move you to action no matter what the circumstances are. I carry a picture of my son always and when I feel down, I simply look at it and remember that I dedicate this effort to him, it works like a charm every time.
Stage 3 – Planting Your Seeds
Make Inviting a Habit – At this stage, think like a balut vendor. Balut vendors don’t just focus on one street or worse focus on one house! They go around the neighbourhood inviting people to buy balut. If one of your friends doesn’t want to listen to you, don’t force it, go to the next friend.
I have learned to always keep a brochure or pamphlet with me wherever I go. I’m always ready to invite whenever an opportunity arises. Sow your seeds all the time. I have had people whom I invited months ago join just recently. It turns out, some people take a long time to think and decide about doing something so just be patient and invite, invite, invite. Make it a habit.
“Keep on sowing your seeds, for you never know which will grow – perhaps all will” – Albert Einstein
Learn How to Present – Although invitation is the first step, networking is a business of presentation. Presenting the business is the single most important skill you need to really experience the potential of this business.
If you are a carpenter, you need a hammer. In networking, you need your clearbook. Some may think it is ‘baduy’ but I wonder how baduy earning 50T per week is. I’d rather be baduy and be financially free than ‘may dating pero walang datung’. Presenting is so much easier if you believe in what you are doing. This is why the first 2 stages of deciding, committing and building your foundation is so important.
You Will Be Rejected – This is the one guarantee you can count on. If network marketing has a tagline it should be: Do You Want to Earn a Million per Week? Then Get Ready to Be Rejected!!!! If you do not experience getting rejected doing this business, then you are doing something wrong. Prepare for it, expect it but don’t store it.Throw rejection away! For me this used to be the hardest part, I just couldn’t shake it off that easily. Getting insulted in the middle of a presentation is no joke. Now, when I get rejected or when people make me feel bad about this business, I just shake it off and pray. My decision to see this through is greater than any rejection thrown at me. Rejection simply means you can still improve. Remember, when you are rejected, just shake it off, vitamins lang yan.
“A rejection is nothing more than a necessary step in the pursuit of success.” - Bo Bennett
At this stage, do not expect a check.
Stage 4 – Nurturing Stage
Slow is Fast, Fast is Slow – Every time you sponsor someone, slow down. Being an upline is a big responsibility. You have to make sure your new downline knows what to do. Focus on each new member first and make sure they make the proper first steps. I have learned to sit down with each new downline and understand their goals and make them understand what they are going to be facing. Make them understand the real nature of the business, not just the rewards but also the challenges. Some guys can sponsor hundreds of direct referrals, earn big and then later on get confused why the big income does not come. Teaching downlines know how to do the business may be slow at first but this system pays dividends in the long run.
Increase Your Knowledge – When you become the upline, you become the source of energy, motivation and knowledge. This is where your long trainings come in handy. Read books on leadership, motivation, business and product knowledge. Ask your uplines if you don’t know.
Follow the 80-20 Rule – Look for downlines who are interested in the business and show commitment. Spend 80% of your time with these downlines. From a business and management perspective, you gain more by developing your performers. At this stage, your potential leaders will already start to emerge. Spend 20% of your time on the other downlines because you’ll never know when they will start to move.
Own the Business – One common pitfall I saw was the over reliance of people on their uplines. They let their uplines present and caddy them all the time. The top earners and fast rising stars are usually independent and treat their uplines like partners. These guys go their own way and treat the business like it’s their own business. Uplines are a great help especially if they are accessible but the absence of uplines shouldn’t be a reason for you to not do the business. Only you can be accountable for your success.
Look for Leaders – Leaders are one of a kind. These are the type of people who do not need any help yet perform greatly, show commitment and are always hungry for more. Leaders don’t emerge right away. According to the uplines, in the Royale Cavite group, it took six months for the first true leaders to really emerge. In a binary system, you only need 1 leader per side to really grow your network. One sign that you may have a leader is that your downline does not consult you but moves on his or her own doing the business. Don’t leave it at that, show your support.
[Here is the catch: It takes one to know one. Which means in order to have a great network, you need to have at least one leader per side of a binary. In order to find the leaders, you have to know what leaders are. In order to know what leaders are, you have to be one yourself.]
At this stage, expect small checks.
Stage 5 – Harvesting
At this stage you should have a pretty substantial network (at least 60 downlines). Here is what you should be doing to grow the network:
Develop Your Leaders – Meet them often. Learn to motivate them. The real leaders will probably surpass you in skills and it’s ok, let them grow. Most of your time should be spent chatting with them. But since actions speak louder than words, you need to be a good example.
Remember the FOLLOW UPLINE rule. Your downlines follow whatever positive habit you do and will magnify whatever negative habits you do.
But even if your upline is such a bad example, try not to follow that upline. Instead, follow your upline’s upline until you see someone you can emulate.
Enhance Your Skills – By now you should be able to present to a big crowd of 50 or more people. You should be the master of the MAM (Meeting After Meeting )and of Closing. You should radiate the confidence because more and more people will be looking up to you and following what you do.
Learn to Motivate – In the Phoenix Group, the leaders who know how to motivate best are also the top earners. You have now become the lighthouse of your group and there is no shying away from the limelight anymore. You cannot earn P100T per week while staying unknown and incognito. At this stage, the spotlight is on you, you might as well learn to shine.
At this stage, expect big checks that will continue to increase.
I really, really hope I helped in making you understand what network marketing really is. They call this the GET RICH SURE not the get rich quick business. I also hope that the Royale Business Club can help in making network marketing respectable again. It’s so sad to see a lot of our kababayans suffer financially when there is a very rewarding business they could do here.
Til next time!
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