THE PHILIPPINE franchisee of the Krispy Kreme doughnut chain is looking to replace certain imported inputs with locally sourced ingredients to cut costs, an official said late last week.

The Real American Doughnut Co., Inc. Director Robert F. Trota told reporters the firm is now certifying suppliers for cooking oil and is also considering local beverage manufacturers.

"About 70% to 80% of our raw materials are imported. We’re hoping to bring it down. [Sourcing locally] saves us transportation costs and it helps the Philippine economy," Mr. Trota said at the sidelines of a franchising conference.

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Surviving the world economy’s periodic tectonic shifts and its attendant aftershocks is franchising. More than a decade since the Asian financial crisis and a year after the global financial crash, the industry has stayed buoyant creating over 30,000 franchise systems and some 2.2 million businesses. The continuous industry growth worldwide is due to the high success rate of franchising as a safe and beneficial international business model according to the World Franchise Council (WFC).

In the Philippines, the multi-billion peso franchising sector has remained a sunrise industry accounting for 5 percent of the country’s over-all Gross Domestic Product (GDP) in the last three years. In 2007, the total asset size of franchising stood at P16.3 billion based on a recent economic impact study commissioned by the Philippine Franchise Association (PFA) and the University of Asia and the Pacific (UA&P).

In terms of employment, franchising also contributed 1.6 percent to the 16.4 million workforce in the services sector in 2007. The average number of direct employees per company was 975.

The study is one of the major take-off points for Franchise 2009, the 17th Philippine International Franchise Conference and Expo (PIFCE), slated on July 1- 5.