By Arra B. Francia
Reporter
FRUITAS HOLDINGS, Inc. (FHI) is upbeat on sales prospects for the year as it hopes consumers will spend more due to the election season.
“We expect the growth momentum to continue. We will continue to expand our store network and also look for additional brands,” FHI Chief Financial Adviser Calvin F. Chua told reporters on the sidelines of a company media event last Friday.
The food cart operator’s optimism for 2019 comes on the back of expectations that the Philippine economy will continue to expand, especially since inflation is now stabilizing.
“And I think because this is an election year, consumer spending will be particularly strong,” Mr. Chua added.
The company plans to file its application for an initial public offering (IPO) with the Securities and Exchange Commission within the second or third quarter of the year, in time to debut at the Philippine Stock Exchange by yearend.
First Metro Investment Corp. and BDO Capital & Investment Corp. were tapped as underwriters for the issuance.
“We continue to monitor market conditions and we’re still targeting 2019,” Mr. Chua said, adding that they are waiting for the market to become more stable and for valuations to pick up.
FHI looks to raise up to P2 billion from the initial offering, in a bid to double its store network in the next five years.
The company ended 2018 with around 950 stores, with about 150 to 200 more to be added this year. Brands under its portfolio include Fruitas, Johnn Lemon, Juice Avenue, The Mango Farm, Jamaican Pattie Shop, and Friends Fries, among others.
“We’re looking at opportunities to expand our store network nationwide from Metro Manila to provincial areas,” Mr. Chua said.
He noted the company’s model is to own majority of their stores, pointing to the 80-20 ratio of company-owned versus franchised stores.
“That’s really grounded on our ability to better control our operations, also have ears on the ground by having more stores actually stationed with area managers, supervisors, and they have the pulse of our market,” Mr. Chua explained.
Asked if Fruitas plans to have more franchised stores in the future, Mr. Chua said they expect company-owned stores to not go much lower than 80% in the next three years.
“I think we will see if there are areas where franchisees can provide value and that’s where we will choose to franchise.”
Franchising fees range from P500,000 to P1.5 million, depending on store size and location.
FHI was founded in 2002 by businessman Lester C. Yu from a single food cart location in Manila. Aside from food carts, it now has three food parks in Quezon City, namely 150 Maginhawa Food Park, Le Village, and Cascades.
