Franchising requires a total fee of about Php600,000 to Php800,000 (US$14,000 – US$19,000) covering the total Php210,000 as well rights and services: right to use the trademark, name and logo of the franchisor; startup and pre-operating assistance; site evaluation assistance; architectural/store design and construction assistance; extensive training on pharmacy retailing, business management and operations, and customer service; technical education and guidance on the dispensing of generic drugs; and marketing and advertising support. The franchise arrangement also requires the franchise to contribute 1 percent of gross sales as advertising fee.
The continuing expansion of TGP indicates its effectiveness in increasing access of Filipinos to affordable generic drugs. Generic drugs generally have the lowest prices among other drugs (Gloor, 2009).
The franchising scheme of TGP shows sustainability as it also enables establishment of rural pharmacy with low capitalization, reliable supply of inventory from the franchisor, and provision of training and supervision. This scheme also appears to be profitable and at the same time socially relevant since it also captures the low-income group.
Read the Generics Pharmacy Case Study here