The Unexpected Roadblock Filipino Franchise Owners Face (Before They Even Open Their Doors)

The Pre-Opening Phase: Where Money Goes Faster Than Expected

From the moment you sign your franchise agreement, expenses begin accumulating—before the first customer arrives.

Here’s how it often plays out:

1. You pay for the unit/lease.

2. You start construction and fit-out.

3. You undergo staff training.

4. You buy inventory.

5. You open (maybe later than planned).

6. You start generating revenue.

But the reality is often more chaotic:

• Rent starts while the store is an empty shell.

• Construction costs jump.

• Training payroll hits.

• Inventory must be purchased upfront.

• Launch gets delayed.

• First months of revenue are slow.

If you want a breakdown of typical costs, check this walkthrough:
How Much Does It Really Cost to Open a Franchise in the Philippines?

1. Rent Often Begins Before Opening

In many malls and commercial centers, you’ll begin lease payments when the unit is turned over—not when you open. The retailer guide-lines of major Philippine mall operators reflect this.
That means you might be paying rent for 1–3 months (or more) without any sales.

2. Construction Costs Rarely Stick to the Plan

Construction material costs in the Philippines are still going through fluctuations. According to the Philippine Statistics Authority (PSA) Construction Materials Wholesale Price Index (CMWPI), growth has been significant in recent years. Philippine Statistics Authority+1  Even if you budget ₱300,000 for a fit-out, it isn’t uncommon to reach ₱400,000-₱600,000 depending on mall requirements, finishes, delay costs and material surcharges.

3. Training Costs Hit Before Sales Start

Most franchisors require you to train your staff for one to three weeks (sometimes more) before opening day. Salaries, allowances, and support costs are incurred without any revenue yet.

4. Inventory Must Be Fully Paid Upfront

Before opening, you often need to pay for the full initial inventory. Retail/franchise models don’t always allow partial stocking. That adds another large upfront outlay.

5. Working Capital Needs Are Often Underestimated

According to data on MSME and business environment, many enterprises underestimate the cash they’ll need for the first 2–3 months of operation. For example, the PSA’s Construction Materials Retail Price Index (CMRPI) showed even modest growth in input costs, underscoring the importance of buffer capital. Philippine Statistics Authority+1  Without sufficient working capital, delays or dips in sales can threaten viability.

Why This Matters: Most Franchise Failures Begin Before the First Customer

The harsh truth: many first-time franchisees don’t fail because the brand is weak—they fail because they ran out of cash before still in the build phase.

Repeated issues include:

• unexpectedly extended construction periods

• overlapping rental and build-out costs

• staff training costs mounting

• inventory payments before revenue

• delays crushing buffer capital

These are widespread problems, particularly among new franchisees.

If you’d like to avoid common mistakes, review this article:
Common Franchise Mistakes Filipinos Make

How Successful Franchisees Prepare Differently

Here’s what successful franchise owners tend to do:

• They don’t just budget for the franchise fee—they budget for the whole pre-opening period.

• They set aside enough capital for rent, delays, training, and initial operations.

• They expect cost overruns and delays, and build cushion accordingly.

• They secure appropriate financing to preserve their own savings.

In short: they treat the franchise fee as just the start, not the full story.

How Pondo Pinoy Helps You Bridge the Cash-Flow Gap

This is exactly where the Pondo Pinoy Franchise Financing Program shines.

Many financing options in the Philippines cater to general small businesses—but new franchises face a very specific challenge: a large upfront outlay without income yet.

Here’s how the program helps:

• Covers up to 50% of your franchise start-up cost (franchise fee, fit-out, equipment, signage, inventory, working capital, pre-opening expenses).

• Allows you to preserve personal savings for rent buffer, operational cushion, unforeseen delays.

• Simplifies application process tailored to franchisees.

If you’re ready, apply now:
👉 Pondo Pinoy Franchise Financing

Final Thoughts

Franchising remains one of the most accessible and powerful paths to becoming a business owner in the Philippines. But the hidden “pre-opening cash gap” is often underestimated—and it quietly determines long-term success.

So here’s your takeaway:
You don’t just need money to build your franchise. You need money to survive the time before it opens.

With the right buffer—and backed by Pondo Pinoy’s financing support—you can open your franchise from a place of strength, not survival.