By Arra B. Francia, Reporter
SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) looks to have an equal mix of franchised and company-owned stores, as the company targets to open 18 to 20 new outlets annually over the next three years.
“We see a shift to a more 50-50 franchised to company-owned stores within the next couple of years,” SPAVI President and Chief Executive Officer Vicente L. Gregorio told reporters in a briefing after the company’s annual shareholders’ meeting in Ortigas Center yesterday.
The listed casual dining restaurant currently operates 217 stores nationwide, 60% of which are company-owned while 40% are franchised. Mr. Gregorio said the 50-50 target can be achieved as they expand toward the Visayas and Mindanao (VisMin) areas.
“VisMin continues to become the big potential moving forward. They’re under penetrated. We continuously receive inquiries there, we just opened a franchised store in Ormoc. And there are other second-tier cities that we are studying and evaluating,” Mr. Gregorio said.
Franchising a Shakey’s store entails a total investment of around P18-24 million, in line with the size and location. The franchise contract runs for a minimum of 10 years, and can be renewed based on the company’s evaluation. Depending on the store’s performance, the total investment can be recovered within three to five years.
SPAVI is ramping up the construction of more stores in the second half, as it targets to end the year with 228 outlets in the Philippines. Overseas, the company said it has received inquiries from entities in Saudi Arabia, Abu Dhabi, and Qatar. It is also in talks with potential partners in the Southeast Asian region.
“For overseas branches, we’re looking for the right franchise partner. We want to make sure we do it right,” Mr. Gregorio said.
Meanwhile, the company is also on the lookout for the acquisition of brands that could complement its existing business. Mr. Gregorio said the acquisition should be “something that is scalable,” and also caters to its current target market.
SPAVI’s net income rose seven percent to P396 million in the first six months of 2017, boosted by a 13% increase in system-wide sales to P4.6 billion during the period.
The company is banking on recording stronger sales in the second half of the year, in order to reach its target of a low double-digit profit increase for 2018. In terms of sales, SPAVI expects growth to be in the low teens.
“We are confident we can achieve the guidance. There is more emphasis on efficiencies. We’ll looking at a potential price adjustment for the second half to help mitigate the rising costs,” Mr. Gregorio said, noting SPAVI will implement a 1-2% price increase in the third or fourth quarter.
The company already raised prices by 3-4% last March amid higher costs of raw materials.
Shares in SPAVI gained 26 centavos or 1.98% to close at P13.40 each at the stock exchange on Thursday.