FRANCHISE BUSINESS PLAN

Final Requirement in

BA 40 B

May 18, 2016

Submitted to:
Ms. Tracy June Dy

Submitted by:
Abinal, Faishia T.
Badua, Neil Arvin
Madronial, Mary Anne
Conde, Jayson
Patriana, Pierre
Roxas, Raven

STRATEGIC FRANCHISE BUSINESS PLAN

I.

STRATEGIC SITUATION SUMMARY

a. Company Background
The company was founded in February of 2012 by a young couple,
Farwa and Ronnel Homebre. The couple shared a passion for coffee
beverages during their younger years in college. Both believe that coffee
drinks should be enjoyed by everyone regardless of their status. The
company has been improving and continue to spread nationwide in a span
of two years. Twelve outlets in Luzon, nine in the visayas and seven in the
Mindanao regions and more opening soon.
b. Business unit
i. Farron Cafe
-

Full Cafe Franchise Package

Minimum of 10sqm.
Equipments and initial stocks
License to use trademark and logo
Start up and pre opening assistance
Site selection assistance
Franchise operational manual
Training on coffee preparations, business
operations, and customer service
- Marketing assistance during soft opening, grand
opening and local store marketing
- Continuing mentoring, business guidance and site
visits

c. Market segment
-

The company has chosen as their primary target

market students and professionals with the ages
eight to eighty years. Most of all students
understand the success of their price and quality of
their product when they ask their friends where to
go when they would go out and grab a cup of
coffee or a frappucino.

d. Product line
i. Hot
1. Coffee
- Americano
- Cappucino
- Latte
- Mocha
- Wild black Forest
2. Tea
- Chamomile
- Peppermint
- Earl Grey
- Green Tea
3. Chocolate
- Hot choco
- Hot choco with strawberries
ii. Over ice
- Icy Americano
- Icy Cappucino
- Icy Latte
- Icy Mocha
iii. Milktea a perfect mixture of creamy milk and bitter-sweet tea
1. Tea
- Assam
- Oolong
- Jasmine
2. Milk tea flavour
- Original
- Blueberry
- Caramel
- Mango
- Wintermelon
- Strawberry
Additional : pearls/coffee jelly /nata
3. Yogurt a creamy milk blend
Original
- Blueberry
- Strawberry
- Mango

iv. Frosty Frappe smooth blended drinks topped with whipped

cream and chocolate
1. Coffee Blend
a. Barack o
b. Cappucino
c. Coffee almond
d. Coffee jelly
e. Cookies and cream
f. Hazelnut
2. Chocolate with coffee
a. Choco burst
b. Choco chips
c. Minty choco
d. Mocha
e. Rocky choco snow
f. Wild black forest
3. Cream blend
a. Creme brulee
b. Strawberries and cream
c. Vanilla

II.

III.

4. Fruit blend
a. Strawberry
b. Mango
c. Blueberry
MARKET TARGET (S) DESCRIPTION
Nothing beats the fragrant smell of roasted coffee, whether at home, in the
office or in a coffee shop. Getting on the coffee business in the Philippines
specifically Cagayan de Oro City starts with knowing the target market of
those who buy and drink the beverage, and as we all know that most of the
Filipino people loves to drink sweet coffee at affordable price and the key to
determining what products to sell in your establishment. Depending on the
price you charge for a cup of coffee, the target market may be students and
business workers on their way to work or professionals who want a cheap cup
for the caffeine ride.
The customer profiles are the following: Students, budget conscious
professionals, hospital staffs, and mall goers. In terms of customer
preferences the product that helps to boost-off our net sales is the Milk Tea
and Frosty frappe. Based on our research, most of the coffee shops at centrio
mall are more expensive compared to farron cafe such that based on the
annual price in 2015 the Starbucks sells their Coffee at the price of 110-135
pesos and for the Tea they sell it for 95-110 pesos. Other example is Coffee
bean, they sell their coffee at the prices of 105-125 while in the Fru Tea they
sell it for about 145-165 pesos. And lastly Boss coffee which sells their coffee
in the range of 115-135 pesos.
OBJECTIVES FOR THE MARKET TARGET(S)

The first objective for the market target is the financial which is a big
difference compared to other coffee companies because, we are selling our
coffee product in a cheaper price with a good quality that you will feel in love
with it and this is suitable for any Filipino people who is a budget conscious
individual. The best market position to our franchise is in Centrio Mall
because it is the Center attraction of the city. For the customer satisfaction I
think all of us will be satisfied in this product because according to the search
that they are selling the product at an affordable price and also maintaining
high quality of product.
IV.

MARKET PROGRAM POSITIONING STRATEGY.

a. Product strategy
-The company will have a random consumer survey on what coffee, frappes and/or
yogurt flavors they prefer to have as a basis for the new implementation of
products.
-The company will sell cup cakes as a perfect partner to the main products.
-For the products which are not sellable already should be out of the menu.
-The company must have a daily inventory for the product to trace if what are
the best sellers and non-best sellers product.
-Innovation of the product will take place also if a products demand start to
decline.
-

b. Distribution strategy

Best to locate the product in Centrio Mall based on the target market.
Students and professionals are often shoppers in Centrio Mall. It is best for
the student to have their coffee while studying and for business workers
after their tired work. Starbucks and Bos Coffee are known for its expensive
price but Farron Cafe can greatly compete their product because of its
affordable price that fit to students and professionals. In terms of taste,
Farron Cafe is confident by using countrys prime coffee and spread the love
in every cup. Ayala Centrio Mall has its name to have expensive brands but
no more worry, Farron Cafe offers affordable price and taste satisfaction
locally. Farron Cafe is already known in Luzon so Starbucks and Bos Coffee is
not a threat.

a. Design of the stall

b. Location: 2nd floor Ayala Centrio Mall, Claro M. Recto Ave, Cagayan
de Oro

c. Price strategy
d. Promotions strategy

The company shall involve with the social media and create a public account
on where they can send advertisements about their products and
communicate with the customers through online.
There will be a promotion in every 3 months of the product:
Jan. Feb. and Mar: New Year, New Flavors and Free cupcake in every 2
purchase of product (February only)
Apr. May and June: New summer coolers coffee frappes products
Jul. Aug. and Sept.: 10% discount will be given for every 5 purchase of
cappuccino, coffee jelly, and/or BarackO only.

Oct. Nov. and Dec.: There will be bookmarks given for each customer (Oct
and Nov only) and have a chance to win a Pamaskong Noche Buena raffle
promo (Dec only).
There will be posters posted in Divisoria and CDOs markets.
There will be flyers given to the random consumers.
The company will be involved in some important events in Cagayan de Oro so
that the name will more make known by the consumers.
The place ambiance of the store must be friendly and go with the trend to be
more attractive.
The company will have a partnership with the schools and/or other company.

1. Sales promotion
- The group recommends the company to give free samples during the soft
opening of the coffee
shop. Most of the mall goers tend to purchased a product
they normally would not have purchased when given in a free sample.
- The group recommends using coupons as a way to earn customer loyalty or to
attract customers to the coffee shop. Placing the products, or displaying the
products at the store shelves to provide the customer with immediate savings
and selection of purchases. This also keeps the customers coming back for
more.
- The group recommends using free products or freebies. This method will lure
the customers to the coffee shop. Another idea is to give away free drinks to the
first thirty people who enters the coffee shop during the soft opening
2. Internet promotion
-The group recommends the company to design webpages that will be
indexed well by the search engines. Linking strategies is essential to promote
the company because the more links pointing to the company site, the more
traffic is being experienced. This means higher result in search engines.
- the group recommends to design a strategy that encourages others to
carrying the marketing message via their social medias and e-mails, using
their own network of relationships and prefereably their own resources.
-the group recommends using traditional media in promoting the website by
placing small display ads on a targeted trade publication,offering some
teasers and pointing readers to the url. This way the site being promoted will
be an online brochures, providing full information to interested coffee lovers.
3. Advertising
-the group recommends the company to use television and radio to
broadcast because this will attract millions of customers. A good way to use
this is during big events like pacquiao fights or any events or holidays in the
Philippines

- the group recommends the company to use product placement advertising,

this will promote the products of the company within the context of a show or
a movie, rather than being an advertisement . this is a great way for the
company to reach a targeted demographic.

e. Marketing research and Market Analysis

I.

Market Segmentation

Families- This focuses on adults and parents with children who love to drink coffee,
family-oriented, to spend with their love ones with an affordable price.
Young Adults- Comprised of 16-24 years of age. This group is interested in coffee
and a student who seek for a place to study and hang-out with friends.
Professionals- This focuses on the busy people who are in need for caffeine and
easy to bring coffee.
These groups of people who love to drink coffee.
II.

Target Market Segment Strategy

These three market segments, families, young adults and professionals are targeted
specifically because they compromise the population. Farron Cafe is determined to
be a community- oriented business and seeks to serve.
III.

Market Needs

Cagayan de Oro community has been dominated by a foreign coffee brand. Farron
Cafe helps revive the glory days of Philippine Coffee by using the country's prime
coffee produce. It is their hope to promote the great local product and spread the
love in every cup. Another unique thing about Farron Cafe is their advocacy to
employ out-of-school youths to their team.
i. Market Trends
Nowadays, many people spending more on drinks or seek a place to hang-out.
More and more people are going out because of the summer season they are
experience in the city. This is why many people are willing to pay for a drinks.
ii. Market Growth

When Farron Cafe will be known throughout the city, more and more people will
appreciate the taste of our local coffee with the increasing demand for local coffee;
producers will be more motivated to produce local coffee. With continuous
satisfaction of the demand, the local population of Cagayan de Oro will highly
appreciate their own locally product.
IV. Industry Analysis
Coffee industry in the country is usually dominated by foreign product. Consumers
nowadays are searching for a new taste, affordable and good service. Through
these the industry is in need to promote the local product not just the imported
products that are dominated in the franchise.
V.

Main Competitors
Direct competitors

Starbucks
Bos Coffee
Coffee Bean & Tea Leaf

Indirect competitors

Krispy Kreme
J.co Donuts
Dunkin Donuts
Mister Donut
Coffee Works

f. Coordination with other business functions

Farron Caf to helps revive the glory days of Philippine Coffee by using the country's prime
coffee produce. Another unique thing about Farron Cafe is their advocacy to employ out-ofschool youths to their team. This is truly the secret to their success: the love they have for
each other, for delicious coffee, for their crew, and of course, for coffee lovers!
V.

Forecasts and budgets

Capital Fee: P1.1M ( inclusive of franchise fee)
Franchise Fee: Php 168,000
Required Space: min. Of 10 square meters
Franchise program : Francorp Philippines

References:
http://smallbusiness.chron.com/target-market-coffee-71600.html
http://food.silkenhut.com/starbucks-philippines-menu-price-list/starbucks-menu-1/
https://www.zomato.com/manila/coffee-bean-tea-leaf-1-newport-city-pasaycity/menu