How to Franchise: Zagu in the Philippines

Craving for an iced cold treat? Or are you looking to franchise Zagu so you can make money selling their iced pearl shakes? Read on to find out how you can open your own franchise of Zagu pearl shakes.

Interested in other food cart franchises? Check out PinoyMoneyTalk’s comprehensive list of the 100 Best Franchises in the Philippines under Php 1 Million.

Zagu’s History

Zagu was the brainchild of Genevieve Lim who studied Food Science from the University of British Columbia in Canada. After several years, she decided to return to the Philippines and, in 1999, opened the first Zagu store in San Juan City, initially offering Taro and Honeydew flavored shakes.

Zagu’s famous drink is actually an iced, flavored shake mixed with pearls. These “pearls” are chewy dark balls made from tapioca and yam. Zagu arguably was the first company to bring the “Pearl Drink” to the Philippines.

In its almost two decades of operations, Zagu has gained recognition through awards like Parangal ng Bayan, People’s Choice Awards, National Consumer Quality Awards, and even an international recognition in Sydney, Australia.

Zagu offers a wide variety of flavored pearl shakes, including:

• Chocolate
• Cafe Latte
• Cookies & Cream
• Hazelnut Cappuccino
• Ube
• Philippine Mango
• Four Seasons
• and many more

To date, there are more than 400+ Zagu stores across the country.

Zagu Franchise Fee and Total Investment

Depending on your preferred store type, the Franchise Fee of Zagu may range from P650,000 to P850,000. There are two types of Zagu Store Operations:

1. Indoor

• a. Stall
• b. Kiosk
• c. Standard Cart

2. Outdoor

• a. Roadside Stall
• b. Roadside Kiosk

According to Zagu, the initial investment of P650,000 to P850,000 is enough to start a fully operational store. The company does not charge their franchisees any continuing fees or Royalty Fees.

Zagu Franchise Package Inclusions

Zagu’s franchise investment package already includes the following:

1. Use of ZAGU Trademark and Logo
2. Zagu Recipes, Ingredients, and Procedures
3. Cart Construction Cost
4. Equipment Package
5. Initial Inventory (Good for 1 week)
6. Crew Uniform
7. Signage
8. Insurance
9. Service Crew Training

As a heads up, the following items are not included in the Franchise Investment Package and will have to be paid separately by the franchisee:

• Security Deposit
• Advance Rental
• Construction Bond
• Government Permits (Business Permits, Mayor’s Permit, etc.)
• BIR Taxes Involved
• Salary of the Crew

Looking for an ideal location will be the responsibility of the prospective franchisee. According to the company, Zagu will only assist in the evaluation of the intended Zagu outlet location.

Zagu does not encourage potential franchisees to reserve a location while they are still in the process of application. It is the sole risk of the franchisee if they will choose to do this, according to the company.

Zagu Franchise Application Steps

Follow these steps if you’re interested to apply for a Zagu Franchise.

Take note that there will be 4 sets of submissions, 3 sets of interviews, and 2 sets of payments (cash bond & franchise fee).

1. Complete the Initial Questionnaire Form – the first step is to simply complete the Initial Questionnaire Form available at Zagu’s website (zagushakes.com). It will take approximately 15-30 days from the date of submission for the result of the Initial Evaluation.

2. Evaluation – you will be thoroughly screened and evaluated based on your completed Initial Questionnaire Form.

3. Initial Interview – if you qualify in the first screening, you will be assessed by the initial interviewer. For all the interviews, you must be accompanied by your spouse (if you’re married) or your business partner/s.

4. Initial Recommendation – after the interview, you will be evaluated and the Initial Interviewer will recommend if your application is approved or disapproved. You will be informed of the results by the Sales Account Officer through mail and phone call.

5. Payment of Cash Bond – if approved, you must pay P10,000 in cash or dated check as a cash bond. This Cash Bond is fully refundable if ever your Zagu Franchise will cease operations and the Authorized Dealer Appointment Agreement is terminated (but hopefully not!).

6. Submission of Completed Application Form & Requirements – to proceed with the application, you must complete all necessary requirements (you will know this during the initial interview, so be sure to ask your Interviewer in case he/she forgets). If you fail to complete the requirements, your application will be put on “HOLD”.

7. Application Interview – this is the second interview and the stage where you are evaluated if you are capable to handle a business.

8. Final Interview – this will be the last interview conducted by the Working Committee.

9. Post Approval Meeting – once the application is approved you will receive a Letter of Approval (for your Application). The Expansion Division will then schedule a Post Approval Meeting with you.

10. Submission of Proposed Location Requirements / Ocular Inspection / Approval of Proposed Location – at this point, you must submit the following:

• Proposed Location (photos & vicinity map)
• Letter of Intent (LOI)
• Endorsement Letter (if the proposed location is inside a mall)

The Zagu team will schedule an ocular visit to your proposed location. Once the proposed location is approved, a Letter of Approval (for the Location) will be issued.

11. Payment of the Investment Package – The Standard AD (Authorized Dealer) Investment Package will be agreed upon and paid in full. Payment may either be in cash or dated check.

12. Signing of the AD (Authorized Dealer) Agreement – you, the Franchisee or “AD”, will finally get to sign the Authorized Dealer Agreement. Once signed, it will be notarized by Zagu and you will be given a copy of the Notarized Agreement.

13. Construction / Fabrication of the Zagu Cart, Kiosk, Stall or Roadside Store – If you’re going to set up a cart, it will be fabricated by Zagu. If you want to construct a Zagu roadside store instead, it can be handled by you or by Zagu but the design & layout must be duly approved by Zagu.

14. Completion of Operating Requirements – prior to the start of the operation, all necessary operating requirements must be secured and submitted to Zagu.

15. Business Operations – before the opening of your Zagu outlet, you must first attend the Business Orientation that will be scheduled by the Sales Account Officer.

16. Service Crew Training – the training of the service crew will be scheduled. It is mandatory for all service crew to pass the training program before deployment and store opening.

17. Final Ocular Inspection and Approval of Construction – Zagu will inspect your outlet after construction for the final approval. Take note that the standard specification for construction must be strictly followed.

18. Pickup of Stocks – Of course, you will be needing all equipment and materials. The following may be picked up at the ZFC (Zagu) Head Office: Initial Inventory, equipment, supplies, and P.O.S (Point of Sale) materials.

19. Scheduling of Store Opening – a target opening date (must be realistic) will be set. This date is dependent on the projected schedule of both parties.

20. Submission of the 1st Week’s Gross Sales – once the store is opened, the first week of operations will be monitored by the Expansion Division.

Franchise Contact Details

Interested to push through with the franchise but you still have additional inquiries Contact Zagu below at:

Zagu’s Authorized Dealer Department

Telephone Number 8687-0140 local 150 or 113 or Mobile / Cellphone Numbers:

0918 – 8889248 (SMART)
0917- 8098043 (GLOBE)
0923-4563586 (SUN)

Address:  #52 West Capitol Drive, Bo. Kapitolyo Pasig City, Philippines

Looking to franchise other food carts in the Philippines? See other food cart franchises in PinoyMoneyTalk’s List of 100 Best Franchises under Php 1 Million.

Information and Image Sources: Zagu Company Website and Facebook Page