News & Events

Blazing the trail

published in FRANCHISE TODAY, June 2008 issue

“Setting up this business has been a
challenging but worthwhile experience for us.
But, the most important thing is that we put a lot
of smiles to a lot of people—our employees,
our franchisees, our customers.”

Already into selling equipment for the petroleum industry before, it did not take long for Nelson and Siu Ping Par to realize the potential of the business they were engaged in and take things a step further. They came up with a pioneering concept and blazed the trail to entrepreneurial success.

The country’s first
Supplying equipment to various LPG refilling plants in 2001, husband-and-wife entrepreneurs Nelson and Siu Ping Par then decided to build their own facilities.

Servicing mainly dealers in the beginning, the Par couple’s LPG refilling plants were located mostly in the provinces: in Zambales, Cavite and Pangasinan. A small plant was also put up in Navotas. Granted authorization to carry the Caltex LPG, one of the top brands in the country, the couple then began selling their own signature brand—PR Gaz.

With four refilling plants producing the LPG products, the setting up of their own retail outlets became the inevitable next step for the Par couple. PR Gaz Haus, the Philippines first LPG convenience store was born.

By the end of 2003, there were close to 40 PR Gaz Haus branches in key points in Luzon. “When we started, it’s a new thing, a new business model. We analyzed the market. It was a trial period during 2003 that we wanted to put up convenience stores in the provinces. It’s something like you want to get your feet wet first and find out if it’s going to work or not, because nobody else has done it yet and we’re the first,” says Nelson Par, PR Gaz Haus chairman and chief executive officer.

With the network of stores and growing customer base, backed by an extensive logistics support system, PR Gaz Haus steadily carved its own niche in the local LPG market. The Par couple then took another bold step in 2005—franchise their business concept.

Franchise with a high-value product
With LPG as an important commodity, the PR Gaz Haus franchise is one of the top investment options available in the country today. PR Gaz Haus is a turn-key franchise.

“PR Gaz Haus carries the LPG product. It’s a need, not a want. We have an impeccable franchise program. We have everything to support the franchisee. If you become our franchisee, you will only worry about selling and nothing else, as all the rest are taken cared of. Investment is not that high-just almost P1 million, inclusive of everything,” says Nelson.

PR Gaz Haus, Nelson adds, is also a franchise company that provides the organization, the experience, the infrastructure, and the support for attaining the entrepreneurial formula for success. “If I were to rate PR Gaz Haus against other independent refillers, we’re one of the biggest in terms of infrastructure and store network. We have a value chain and our business model is a first in the industry.”

Setting up a PR Gaz Haus franchised outlet can be done either through a start-up business or through acquiring an existing company-owned outlet.

The ideal franchisee
Since launching the franchise program, PR Gaz Haus has awarded 35 franchises to date. This translates to a yearly success rate of, on average, a dozen franchised outlets being set up. Of the number, overseas Filipino workers (OFWs) comprise the majority of franchisees.

“There are a lot of interested parties. But, we would always give preference to the OFWs,” discloses Nelson. “We treat everybody equally, but we value them more because they are our country’s heroes.”

His wife, Siu Ping who heads PR Gaz Haus’ franchising operations, shares the same sentiments. “We’ve been getting a lot of online inquiry from them. They have a special place in our hearts.”

In choosing franchisees, the Par couple finds having firm belief in the business concept and its potentials as the ideal trait. The franchisee should be able to devote ample time managing his outlet. Complying fully with the franchisor’s standards is also important.

Says Siu Ping, “If you don’t believe the business will work, along the way you might get discouraged. Also, will you follow our system? There are certain controls that we have to exercise as the franchisor over the franchisee, we have certain standards which we implement to all.”

Being hands-on business owners themselves, Nelson and Siu Ping expect their franchisees to be as committed to the business as well. Points out Siu Ping, “We’re going to ask who will handle the business. Are they ready for a lifestyle change? It’s very important that they have the dedication. That’s the ideal profile we look for.”

Aside from OFWs, PR Gaz Haus’ roster of franchisees are also made up of housewives, graduates, retirees, business owners, and even currently employed individuals who wanted an additional source of livelihood.

From the current crop of PR Gaz Haus franchisees, several of them have already acquired a second outlet, becoming multi-unit operators. Nelson and Siu Ping are pleased with the development, proving that their concept is a profitable venture.

Says Nelson, “It’s very encouraging. If they ask for a second store, definitely it means they are happy with the business, with the support of the franchisor and how we manage the system.”

As to the number of store a franchisee can put up, Siu Ping says, “At the moment, a maximum of two units only. If they don’t perform well not only in terms of sales but also in compliance, in dedication and commitment, in all these areas, we’re not going to grant them a second. Numbers alone is not a gauge.”

Paving the way to industry leadership
With its own infrastructure’s existing capacity, PR Gaz Haus is eyeing to put up 180 to 200 stores by end of next year, increasing the number by half by 2010. As of June 2008, there are now 90 PR Gaz Haus outlets, majority of which are company-owned.

“We’re coming in to Metro Manila, that’s the focus now,” declares Nelson. “For the neighboring areas, we’ll still entertain a lot of the franchisees for Pangasinan, Tarlac, La Union, Bataan, going up to Pampanga and Zambales, even down to Bulacan, because we’re not stopping at growing at the outskirts of Metro Manila.”

While keeping a 50-50 ratio of company-owned outlets to franchises, the Par couple recognizes that franchising has contributed to the company’s rapid growth. “If you want to grow the company you have to share. There’s always strength in numbers. To do it on our own will take a lot of resources,” says Nelson.

In May last year, the company also began pilot-testing a mobile point-of-sale (POS) system designed to enhance operations of PR Gaz Haus’ growing network and to complement its customer loyalty program, the Suki ni Gazman which uses a data storage capable card system. The mobile POS system not only allows company riders to issue receipts on site but also automatically updates the customer’s record. Initially tested on company-owned stores, the mobile POS system and Suki card program are another pioneering innovation in the LPG retail business.

“With the POS system, we are able to retain customers and introduce more value-added products, and add more revenue to the franchisees. Our customers are very impressed as nobody else has done it,” says Nelson.

Amidst the challenges
With the effects of the current increases in oil prices, and the LPG product largely dependent on world market price movement, the husband-and-wife team is unfazed. Resiliency and competitiveness they say are key in times of challenges.

“Cost of operation is very high. We just have to be resilient—try to bite the bullet and survive. It does have a big effect on the profitability and as franchisor we sacrifice a lot for the franchisees. Our franchisees are not complaining because we are in a better position in terms of pricing and their margins have not gone down. Everybody is on the same boat. That’s why we have to be competitive, keep ourselves on our toes—we’ve better services, better pricing, and we have the network,” says Nelson.

Amidst the current crisis, the PR Gaz brand and business concept continuously enjoy big market acceptance. Nelson and Siu Ping are pleased with the development, looking forward and planning bigger things for their company in the coming years.

“Setting up this business has been a challenging but worthwhile experience for us. The most rewarding experience is in providing employment for a lot of people, helping the OFWs to become entrepreneurs so that they don’t have to leave their families and giving them the opportunity to invest their hard-earned money wisely, all these things are satisfaction to us. But the most important thing is that we put a lot of smiles to a lot of people—our employees, our franchisees, our customers.” the couple said.

And what’s their secret to attaining entrepreneurial success? “There are no secrets in business. You have to have determination, perseverance to succeed. There’s no such thing as a shortcut. You have to love what you are doing.”