Company Name: Erikagen Inc.
Franchise Name: Generika Drugstore
Erikagen Inc., the company behind Generika Drugstore, is a joint venture of two families that believed it was time Filipinos knew the truth about generic medicine.
Teodoro Ferrer, president of Erikagen Inc., explains: "We had this shared observation that many Filipinos buy expensive branded medicines that they could ill afford due to widespread misinformation or also had the problem of not being easily accessible."
So in September 2003, Ferrer and his wife Rosalinda formed a joint venture with the family of Alexandra and Julien Bello to sell generic medicines to Class C, D and E communities around the country. They called the company Erikagen and its drugstores Generika, both with the objective of "properly educating people about generics and making available to them quality affordable alternatives to branded drugs."
Apart from providing quality generics at affordable prices, Generika also offers branded medicines, selected consumer products, and related items at competitive prices. Ferrer says that the company spent its four years learning the business and the drugstore industry as well as preparing for its franchising venture.
In May 2008, after putting up a total of 16 company-owned stores, Erikagen opened its first franchised store at Mega Q-Mart in Quezon City. Ferrer recalls: "After a gradual, deliberate start, we quickened the pace of our expansion as we gained more confidence. We were gladdened by the favorable increase in our franchise stores and the favorable feedback from the marketplace."
At present, Generika has 34 franchised stores in Metro Manila and Luzon in addition to the original 16 company-owned stores. Ten of the stores opened in May this year, and the company intends to open in 30 more locations by the end of 2009 and branch out to the Visayas and Mindanao in 2010.
The total investment for a Generika franchise is between P1.3 million to 1.5 million. This is inclusive of provisions for store renovation, staff hiring and training, initial stock inventory, computers and printers, computerized POS (point-of-sale system), security deposit, advance rental payment, and working capital.
The company provides ongoing support to its franchisees such as a market study of the franchised store's location; staff hiring assistance; extended training program at in-house and existing stores; detailed store manuals; and technical, sales, leadership, and supervisory courses.
Ferrer says the company gives strong emphasis to the investor's personal commitment to the franchise. "Adequate financial resources and business and management experience are important, but we prefer that the franchisee is hands-on or at least has a competent and reliable store supervisor to handle operations and sales," he explains.
The payback period for the investment in the Generika franchise varies depending on store location and the level of involvement of the investor in the business. "For an absentee franchisee, recovery of the initial investment may take a year-and-a-half to three years or even longer." Ferrer says.
An affiliate company, Generika Franchising Services Corp., markets the company's franchise, trademark, and business model and provides support to the franchisees. Erikagen Inc. has formed two other affiliated companies to provide operational support to its franchisees. They are Actimed Distribution Inc., which handles the distribution, warehousing, logistics and the commissary of the stores, and Novelis Solutions Inc., which develops the Erikagen's POS computerization software and other applications and enhancements.