Guide to Franchising Pawnshops

Due to the economic crisis faced by the country as well as the continuing rise in unemployment, pawnshops have made considerable business in the Philippines throughout the years. This is especially evident in cases when customers feel the need to convert property to cash and therefore enjoy more liquidity. However, during instances of economic growth, the pawnshop industry is often seen to thrive as well. This normally occurs when loan terms become shorter, thus fueling the need for alternative options when meeting unexpected bills such as medical expenses and home repairs, among others.

History of pawnshop franchising

As early as the 1970′s, the pawnshop industry has been regulated and is governed by PD 114 or the Presidental Decree 114 by the former President Marcos. Due to such favorable regulations, the pawnshop industry in the country has experienced considerable growth in the past years. Franchising has also opened excellent growth opportunities for both franchisors and franchisees, with more entrepreneurs expressing interest in pawnshop franchising in the country.

Back in 1999, there was only one pawnshop for every 8,756 Filipinos. Today however, there are already more than 5,000 pawnshop owners and 10,000 registered pawnshops according to the BSP or the Bangko Sentral ng Pilipinas.

Requirements to become a franchisee

Those who are planning on franchising a pawnshop will have to go through a list of requirements first in order to ascertain their qualifications for such an entrepreneurial venture. Typically, a pawnshop for franchise will require a franchise fee, additional investment for equipment and other materials, and total capital requirements. Franchise fee may vary from Php 35,000 to as high as Php 100,000, while total capital requirements may reach Php 2 million. Terms may also vary, as well as the operation system fees and minimum space requirements.

Valuable tips for success

When it comes to franchising or managing a pawnshop, or operating any kind of business for that matter, understanding its various operational requirements is very important. In order to succeed in the pawnshop franchise business, you need to know first of all, how pawnshops work. Since you will be operating via franchise, you also need to be able to conform to the operational requirements of the franchisor.

Where to get franchise information and applications

You can get franchise information from pawnshops which offer franchise opportunities. The BSP or the Bangko Sentral ng Pilipinas also provides valuable information for those planning to engage in the pawnshop business within the country. You can also check out official sites of well-established pawnshops for their contact info.

Photo Credits: Leo in SME

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