Tiger Sugar has become a global phenomenon, famous for its unique brown sugar boba milk tea. With its origin in Taiwan, the brand quickly expanded worldwide, including the Philippines, where it has gained immense popularity. Aspiring entrepreneurs often wonder about the costs and requirements involved in franchising a Tiger Sugar outlet in the Philippines. This article provides a comprehensive guide on franchising Tiger Sugar in the Philippines, covering costs, requirements, and other essential details.
Introduction to Tiger Sugar
History and Background
Tiger Sugar was founded in Taichung, Taiwan, in 2017. It quickly gained a loyal following due to its distinct offerings, particularly the brown sugar boba milk. The brand’s success is attributed to its unique preparation method and quality ingredients, which create a rich, caramel-like flavor in the boba.
Global Expansion
Since its inception, Tiger Sugar has expanded rapidly across the globe, with outlets in countries such as Singapore, Hong Kong, the United States, and the Philippines. Each location maintains the brand’s commitment to quality and consistency, ensuring a uniform experience for customers worldwide.
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Why Franchise Tiger Sugar in the Philippines?
Market Potential
The Philippines has a burgeoning market for milk tea and boba drinks. Filipinos have embraced the milk tea culture, making it a lucrative market for brands like Tiger Sugar. The brand’s established reputation and loyal customer base further enhance its market potential in the country.
Brand Recognition
Tiger Sugar’s strong brand recognition and global presence provide a significant advantage for franchisees. The brand’s reputation for high-quality products and unique flavors attracts customers, making it easier for new outlets to gain traction.
Support and Training
Franchising Tiger Sugar comes with the benefit of comprehensive support and training from the parent company. This includes guidance on store setup, operations, marketing strategies, and staff training, ensuring a smooth start for franchisees.
Cost of Franchising Tiger Sugar in the Philippines
Initial Franchise Fee
The initial franchise fee for Tiger Sugar in the Philippines typically ranges between PHP 1.5 million to PHP 2.5 million. This fee grants the franchisee the right to use the Tiger Sugar brand name, trademarks, and business model.
Store Setup and Equipment
Setting up a Tiger Sugar store involves costs for location renovation, equipment purchase, and store furnishings. On average, these costs can range from PHP 4 million to PHP 6 million. This includes expenses for kitchen equipment, furniture, fixtures, and initial inventory.
Royalty and Marketing Fees
Franchisees are usually required to pay ongoing royalty fees, which are a percentage of the monthly gross sales. For Tiger Sugar, this typically ranges from 5% to 7%. Additionally, there may be marketing fees to contribute to national and regional advertising campaigns, which can be around 2% to 4% of monthly gross sales.
Other Operating Costs
Operating a Tiger Sugar franchise also involves regular expenses such as rent, utilities, staff salaries, and supplies. It is essential to factor in these costs when planning the financial aspects of the franchise. Rent can vary significantly based on location, with prime spots in malls or high-traffic areas costing more.
Total Investment Estimate
Considering all the above factors, the total investment required to open a Tiger Sugar franchise in the Philippines typically ranges from PHP 7 million to PHP 10 million. This estimate includes the initial franchise fee, store setup, equipment, and initial working capital.
Franchise Requirements and Process
Eligibility Criteria
Potential franchisees must meet specific criteria set by Tiger Sugar to qualify for a franchise. These usually include:
Financial Capability: Adequate financial resources to cover the franchise cost and sustain operations.
Business Experience: Preferably, some experience in the food and beverage industry or retail management.
Commitment: A genuine interest in the brand and a commitment to maintaining its standards and values.
Application Process
Initial Inquiry: Prospective franchisees can start by contacting Tiger Sugar’s franchising department through their official website or email.
Application Form: Complete the franchise application form, providing details about your background, financial capacity, and reasons for wanting to franchise Tiger Sugar.
Interview and Evaluation: If the application is shortlisted, the next step involves an interview and evaluation process. This may include meetings with the franchising team and assessments of your business plan and location proposal.
Approval and Agreement: Upon approval, a franchise agreement will be drafted and signed. This document outlines the terms and conditions of the franchise, including fees, obligations, and support provided by the franchisor.
Training and Setup: Once the agreement is signed, the franchisee undergoes comprehensive training on store operations, product preparation, and customer service. Simultaneously, the store setup process begins, including renovation, equipment installation, and inventory procurement.
Grand Opening: After completing the training and store setup, the franchisee is ready for the grand opening. The franchisor often provides marketing support to ensure a successful launch.
Benefits of Franchising Tiger Sugar
Established Brand
Franchising Tiger Sugar allows entrepreneurs to leverage a well-established brand with a strong reputation for quality. This brand recognition helps attract customers and build trust quickly.
Proven Business Model
Tiger Sugar offers a proven business model with established operational procedures and marketing strategies. Franchisees benefit from the franchisor’s experience and expertise, reducing the risks associated with starting a new business.
Training and Support
Franchisees receive comprehensive training and ongoing support from the franchisor. This includes assistance with store setup, staff training, marketing strategies, and operational guidance, ensuring a smooth and efficient operation.
Marketing and Advertising
Tiger Sugar invests in national and regional marketing campaigns, promoting the brand and driving customer traffic to franchise locations. Franchisees also benefit from local marketing support to boost visibility and sales.
Challenges and Considerations
High Initial Investment
The initial investment required to franchise Tiger Sugar can be substantial, ranging from PHP 7 million to PHP 10 million. Potential franchisees must ensure they have adequate financial resources to cover these costs and sustain operations during the initial months.
Competitive Market
The milk tea and boba market in the Philippines is highly competitive, with numerous established brands and new entrants vying for market share. Franchisees must be prepared to implement effective marketing strategies and maintain high product quality to stand out.
Operational Demands
Running a Tiger Sugar franchise requires dedication and hard work. Franchisees must manage various aspects of the business, including staff, inventory, customer service, and marketing. It is essential to have strong organizational and managerial skills to ensure smooth operations.
Conclusion
Franchising Tiger Sugar in the Philippines presents a lucrative opportunity for entrepreneurs looking to enter the booming milk tea market. The initial investment, including the franchise fee, store setup, and ongoing operational costs, typically ranges from PHP 7 million to PHP 10 million. Despite the high initial investment, the benefits of franchising a well-established brand with comprehensive support and training make it a worthwhile venture.
Aspiring franchisees must meet the eligibility criteria, undergo a thorough application process, and be prepared for the operational demands of running a Tiger Sugar outlet. With the right commitment and resources, franchising Tiger Sugar can be a rewarding business endeavor, capitalizing on the brand’s strong reputation and loyal customer base.
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