PAMANTASAN NG LUNGSOD NG MAYNILA

(University City of Manila)

General Luna cor Muralla Street, Intramuros Manila
PLM Business School

AQUABEST

Presented to:
Atty. Yasmin P. Rasuman, MBA

by:
Elican, Kenly F.
Jalocon, Aaron Matthew C.
Llevado, Jelica B.
BS ENTRE 3-2

2023
 I. INTRODUCTION

Aquabest was founded by Carson Tan in 1997. He wanted to establish safe and clean
drinking water because of the scarcity. He then invested a capital of 1 million pesos. He uses
high quality filtration known as “reverse osmosis”, used by NASA. It’s filtered to 28 stages for
the particles and residue to be removed in the water.
By that time, the water refilling station gained popularity, loyalty and was trusted by the
customers. It was advertised by local TV stations. In a span of a decade, the outlets grew to about
600 water refilling stations. Also furthering the spread to their branches, naming, Aquabest Plus,
Aquaspree, Aquarevo, Alkaline Plus, Bestlife, Mineral Plus, and Oxyplus. It is also a member of
the Philippines Franchising Association (PFA) and Association for Filipino Franchisers
Incorporated (AFFI)

II. Reason Why Franchisor Succeeds

There is a problem and they created a solution. The problem is when there was a decline in
water supply in Metro Manila, only water bottles were available. There was a lot of competition
as the stations continued to grow. They were bankrupt, but then still managed to elevate their
company, raising the one million pesos, paying creditors of 850,000, by then 150,000 was their
capital, the workforce was very much too little. There are constant battles between the pricing of
the water supply. This reduces the profit margin and gradually will increase costs.
They then became innovative, collaborating with best water filtration and treatment technologies
with the equipment manufacturers. They were able to secure exclusive rights for certain
technologies. Such as the known companies, Grander technology, altering the molecular
structure of the water so it can be absorbed by the body easily. Then Tanwing Ozone, using the
Ultraviolet Radiation (UV Radiation) emitted into the water, destroying all bacterial and viral
contaminants. Lastly, the NanoTec. Aiming to make the water have a neutral ph level for the
customers to consume. Secured the ISO 9001 certification from Bureau Veritas. International
Organization for Standardization (ISO) standards for ensuring the quality, safety, and efficiency
of the products owned by businesses. Their revenue increased, as they use the high quality
technology. They proclaimed these attributes that make their business unit, brand. Quality,
Service, Value, and Technology (QSVT)
i. Why did you choose this franchise?
Choosing to franchise the ‘Aquabest’ because it is a low risk and high return investment.
According to M. Tang (2020) Internationally recognized brands are one of the key factors that
makes the franchising successful. As stated from the accomplishments of Aquabest, it passed the
International Organization for Standardization (ISO). It is adaptable and innovative in the
market. The lessening of waste regarding plastic bottles. Water refilling stations help with the
environment conservation and consumption (K. Willis et. al, 2019).

ii. Why does this opportunity fit your lifestyle, financial goal?
This franchise business that was chosen is meant to make the lives of the people
convenient. A comparative study was formed, according to V. Presentacion et. al (2021)
Consuming tap water is mostly unsafe and water bottles are pricey. The researchers found via
sampling the water and putting it into several screenings to ensure its safety. Measured the
acidity, pathogen, bacteriological state of the water in the lab. In consequence, the people can
afford to go and buy water at water refilling stations, it is safer than consuming some tap water.

III. COST ANALYSIS

Aquabest is a member of the Philippines Franchising Association (PFA) and Association

for Filipino Franchisers Incorporated (AFFI)

Franchise Information

● Franchise fee: P 100,000

● Total investment cost: P 500,000
● Rent of 50,000 annually
● Utility bills of 4,000 every month (2,000 for Meralco and 2,000 for water bill)
● Personnel wages 300/day (max. of 4 personnel)
● Monthly dues: P 4000 per month for advertising fee
● Lot size requirement: minimum of 28 sqm ( with toilet and stock room)
● Location requirement: Preferably mainstreet, with parking space, have at least 300
households or offices adjacent, and no other competing water station nearby.
Franchise Inclusion

● Trade Name and logo

● Water treatment system
● Staff and franchisee training
● Signages
● Stainless table
● Initial inventory
● Operations manual
● (Optional) Delivery vans
● (Optional) Renovation

Franchisee Requirement:

● Marketing and management experience

● Devotion in operating and managing the business
● Success driven and does not give up easily when there are problems
● Willing to pursuit innovation to further the success of the business

Advantages of Aquabest Franchise Disadvantages of Aquabest Franchise

Zero interest up to 60 months, as it will be Advertising fee of P 4,000 every single

financed in house. month

No Royalty Fee Location searching may prove to hard to find

with the requirements needed

Free streamers every quarter

 Free uniform, replacement filters every
month

Free replacement carbon cartridge every 6

months

Staff training is provided

On-going support and maintenance

IV. FINANCING

Cash (20%) 120,000

Loan (80%) 480,000

Total Investment 600,000

Loan Term 5 years

Annual Interest Rate 6%

In order to finance this business endeavor, the partners should identify where they will
source their investment funding. Upon rigorous deliberation, the partners have pooled over
120,000 Php just enough to deposit a downpayment of 20% to start the franchise. The remaing
80% will be financed through an acquisition of a loan from a local bank, metrobank.
 Applied Monthly Annual End of Loan

Principal 8,000 96,000 480,000

Interest (6%) 2,400 28,800 144,000

Amortization 10,400 124,800 624,000

The partners need to compensate a monthly of Php 8,000 to pay the loan by the 5th year
since starting the franchise. Moreover, the partnership should also make necessary monthly
payments of Php 10,400, which then totals to Php 124,800 worth of loan payments annually.
While studying the market and other well established water refilling stations near the area we
gathered that they come up with a monthly water bill of 2,000 Php with 245 Php per 10 cubic
meters. Dividing 2,000 by 245 and getting 8.16 which is now multiplied by 10 to get 81.63
Cubic Meter. 81.63 cubic meters is now then converted into liters (81,630 Liters) and divided
by 20 (20 because that is the liter capacity of the blue containers used in operation) to get the
exact amount of refills the refilling station has achieved, which is 4,082 refills. 4,082 is now then
multiplied by 25 to get the monthly gross income, which is 102,050 Php. With the combination
of factory overhead and labor, we are left with a sum of 23,800 Php. The deduction of the
expenses to the gross income have now left with a profit of 78,250 Php. Now that the computed
net profit has 78,250 monthly profit in mind, they can now compute the return of investment.
Due to the nature of the loan taken out at Metrobank, we are put in an impossible position where
the terms and conditions of the loan agreement might surface prepayment penalties or clauses
because the payment was not done in the agreed upon timeframe. With that in mind, the value
was computed for an 8 month duration. They would have broken even and any profit going
forward will be considered as a net positive.

2,000/245= 8.16 8.16 x 10 = 81.63 Cubic Meter

81.63 Cubic meter = 81,630 Liters 81,630/20 = 4082 Refills

4082 x 25 = 102,050 Php Conversion cost (Labor+FO)= 23,800 Php

 102,050-23,800 = 78,250 Php monthly 78,250 x 8 = 626,000 Profit in 8 months
profit

V. OWNERSHIP

The franchisee decided on choosing ‘Aquabest’ to franchise because it is a trusted brand

and a good investment for the franchisee. Primarily, the people need water, it is fundamental to
the livelihood of the people. Moreover, in terms of the advantage of the franchised business. It
has no royalty fees and on-going supported maintenance. Besides the ongoing support, the
franchise also provides training for the staff, which are in different aspects of the business, such
as the operations, marketing, and technicalities. The recognizable presence of the brand, exposed
from sponsorships, promotional tie-ins. Leading to more customer popularity and attraction.
Hence prompting more earnings for the water refilling station that will be established.

VI. LOCATION

Clean water is in high demand right now, especially since the world has been hit by the
COVID-19 Virus. It is now critical that everyone has access to safe drinking water. To suit the
needs of consumers, Aquabest offers several important solutions. It is committed to offering
high-quality, service-oriented, value-added, and technologically advanced products and services
to meet the needs of a wide range of applications The Aquabest franchise located in Katuparan
Village, Tigbe, Norzagaray, Bulacan. This place is suitable to have a Water refilling station
because this place is residential with over 4,000 families, always crowded because it is a
relocating site so a lot of people live there and there are also private and public vehicles because
it is near the main road. Living in a tropical country is a day to day coping with the changing
climate, that's why it is important that we always have water on our side to keep us fresh and
avoid dehydration.

VII. Market Study

Aquabest is a water refilling station franchise in the Philippines that offers purified,
alkaline, and mineral water. With the increasing demand for safe and clean drinking water in the
country, Aquabest has become a popular choice for entrepreneurs looking to invest in the water
refilling industry.

To conduct a market study of Aquabest, here are the several factors to consider:

● Type of Market Research

The type of market research implemented would be quantitative research with secondary
data provided as the foundation for the proving and accuracy of the study. It is backed up by the
former information that was done by the researchers, writers, and publicists.

● Market Demand

The demand for safe and clean drinking water in the Philippines is high due to the
prevalence of water-borne diseases and the lack of access to clean water in some areas. As a
result, the water refilling industry has seen significant growth in recent years, and Aquabest has
positioned itself as a trusted brand in the market.
 ● Market Competition

The water refilling industry in the Philippines is highly competitive, with several
established players and new entrants vying for market share. Aquabest faces competition from
other water refilling stations, as well as bottled water brands and home filtration systems.

● Evaluating Potential Locations

The location was evaluated, the water refilling stations that are established are far and
outside of the village. The competition is minimal, almost to none. The Aquabest that will be
built is inside the village. The place where the people will go is steep and difficult, as to why the
source of the water refilling station would be near. Inside the village the road and streets do not
have a traffic jam. It is also at ease because of the pedestrian walkable place.

● Franchise Fees and Support

Aquabest offers franchise packages that include equipment, supplies, and training for
franchisees. The franchise fees range from Php 400,000 to Php 800,000, depending on the
package. In addition, the company provides ongoing support and assistance to franchisees,
including marketing and advertising support, site selection, and operations management.

● Profitability

The profitability of an Aquabest franchise depends on several factors, including location,

competition, and operational efficiency. However, the company claims that its franchisees can
recoup their investment within 1 to 2 years and achieve a return on investment of up to 30%.

Overall, the market study suggests that Aquabest franchising has potential for growth and
profitability, given the high demand for safe and clean drinking water in the country and the
company's established brand and support system for franchisees.
VIII. Franchisor Relationship

On the franchise agreement with the franchising business format unit. The rights and
obligations are fundamental for both parties. Ensuring compliance with Standards and
expectations from the franchisee. Aquabest is a well known brand so to protect the brand name,
the franchisees will follow the agreement and guaranteeing of the standardization of the product
and services. Considering the financial aspect of the franchise. There is no royalty fee that was
provided by the franchisor, being consistent with following the agreement suffice the gratitude
for the franchisor. Managing the support and training of staff also affects the franchisor and
franchisee relationship. Within this context, the franchisor brings the high quality performance of
the laborers that are the primary part of the business. This will establish a good connection with
the workers, franchisee, and franchisor. There would be interactions regarding the procedures,
maintenance, and operation of the franchised business. It will lead to effective updates and
feedback that will be addressed, with certain concerning issues too.

IX. Exit Strategy

After 8-10 years of dedicated service, our primary goal is to ensure the uninterrupted
provision of pure, clean, and safe water to the nearby inhabitants. In line with this objective, they
have planned to initiate the process of transferring ownership to a suitable successor. This
approach allows for the continuity of their mission and the seamless operation of the water
supply system. During this period, they will actively search for a potential successor who shares
their commitment to maintaining the highest standards of water quality and service. Their aim is
to identify an individual or organization that possesses the necessary qualifications, expertise,
and dedication to take over the ownership and operation of the water supply facility. They do
understand that finding the right successor may take time, and they acknowledge the importance
of conducting a thorough search to ensure a seamless transition. Therefore, they have allotted a
timeframe of approximately one year for this purpose. The franchisees will leverage various
channels, such as industry networks, professional contacts, and targeted outreach, to identify
suitable candidates who can carry forward our legacy. However, in the unlikely event that, after
the one-year period has passed, they are unable to find a qualified successor who meets the
criteria, they will responsibly explore alternative options to safeguard the community's access to
clean water. Asset liquidation would be considered as a last resort, pursued only after careful
consideration and evaluation of all available alternatives. The commitment remains
unwavering—to ensure the continued provision of pure, clean, and safe water. They will make
every effort to explore all avenues and exhaust all possibilities before considering asset
liquidation. Their ultimate objective is to secure a sustainable solution that ensures the ongoing
well-being of the community they serve. Throughout the entire process, they will maintain open
lines of communication with the community, relevant authorities, and potential successors.
Transparency and cooperation will be the guiding principles as they work towards a successful
transition that prioritizes the community's access to essential water resources. They firmly
believe that by proactively planning for the future, they can ensure the long-term sustainability
and quality of water services, even in the face of potential ownership changes.

X. Conclusion

As a conclusion for the franchisees, the calculation of the cost analysis and financing
statement, heavily modified the management of the business. The financial feasibility of the
franchised business is reasonable. Therefore, the capital and investment is set to attain the quality
product that is produced. The loan would be paid for about 8 months- 1 year if there are no
other expenses or casualties that will happen, nor delays in the financial status. After the first
year, it is probable that the capital ventured to the business will regain and expand for there is the
profit that is now supplemented because the loan was paid off. Adding the factor of the
franchisor relationship with ownership. As long as the relationship is consistent and strong with
the franchisors, staff, and other owners. It is highly attainable to sustain the Aquabest water
refilling station. Proceeding with the decision of managing the franchise business for 10 years.
The owners will add more franchised business. Furthermore, if the franchise business is
successful in year 5 it is managed. The 10 year plan to execute the business is realistic.
References:

https://business.inquirer.net/147181/innovating-its-way-to-success

https://www.davidpublisher.com/Public/uploads/Contribute/597ff2bad1cef.pdf

https://www.mdpi.com/2071-1050/11/19/5232

https://www.researchgate.net/publication/353184947_The_Cost_and_Quality_of_Bottled_Water
_in_Refilling_Stations_and_Tap_Water_in_Cabanatuan_City_A_Comparative_Study

https://ifranchise.ph/aquabest-franchise/

http://www.aquabest.com.ph/soul-technology.html?fbclid=IwAR3hEzTMpzjDQlcD6UIu_GvWj
9IgTmKvi_NPmnalDJwNI6tw8BnLBOqjwBo