Max's Group prefers franchises over company-owned stores

MANILA, Philippines – The 72-year-old Max's Group Incorporated (MGI) wants more franchises than company-owned stores in a bid to aggressively expand its footprint here and abroad, and at the same time, generate higher fee-based contributions to its revenue.

"We would like to focus more on franchising. Right now, we are 35% franchise, 65% company-owned. The intent is to reverse that," MGI president and chief executive officer Robert Trota told reporters after the group's annual stockholders' meeting in Quezon City on Wednesday, May 9.

Max's plans to add 90 more stores in 2018, most of which are under franchise contracts.

Of the 90 outlets, Trota said 74 will be in the Philippines, while the other 16 will be overseas. Fifty-five of the new stores targeted this year will be covered by franchise agreements, he added. (READ: Max's Group in the time of food trucks)

Since it opened for franchising in 1988, the casual dining restaurant group has established itself as home to a number of the country's brand-name franchisors.

"We remain confident of realizing our growth plans as we pivot towards a franchising-led approach to expansion. In the same way, we will continue to chase new opportunities for our loved brands," Trota said.

Max's Group targets to establish 1,000 stores, 200 of which will be outside the Philippines, by 2020.

Max's Group closed 2017 with 673 branches, with 55 of those in North America, the Middle East, and Asia.

"[Our] international stores are all franchise. [We have] no intentions of opening any company-owned stores [overseas]," Trota said.

From its first Max's Restaurant in Quezon City, the restaurant chain diversified its portfolio with 14 brands all over the world, including Max's Restaurant, Yellow Cab Pizza, Pancake House, Krispy Kreme, and Teriyaki Boy.

Max's Group saw its systemwide sales surge by 13% to P17.34 billion in 2017, from P15.34 billion a year ago. Trota said strengthened franchising operations contributed to the 16% increase in commissary sales of P1.46 billion last year, from P1.26 billion in 2016. –