A Scramble Question: How Do You Maintain the Low Price Without Affecting Franchisee Profit Margins?

I was at a photo shoot with other newbie photographers and I met this guy, also Richard, and he was a Marketing Consultant and we got to talking about the Scramble phenomenon.




(Picture of Manila Scramble kiosk by foodtriptayo.com)

My concerns:

1. The Main Selling Proposition is a Cool Drink at a Really Low Price. With retail price at P7-P10-P17, how do you keep it at that level with rent and CUSA going up every year (and if the mall sees you are making a lot of money, they might even increase beyond the 10% or even ask for percentage of sales) and minimum wage in Manila is now more than P400/day?

2. If selling price goes up to P20 or P25, will that not be too close to Zagu at P30-P36 in a bigger cup size?

3. How about the traditional Gulaman drink at P10/8oz cup sold with the favorite siomai?

4. When Dunkin Donut recently raised SRP of their donuts from P10 to P12 or 20% increase, the size still remained the same (which seems to be getting smaller) but the margin to the franchisee remained the same.

5. A Scoop of Milko ice cream is P12, Mang Inasal sorbetes at P10 and when Selecta does a promo, P5/cone!!! Are these competiting products to the scramble??

6. Plastic cups used for the scramble is petroleum based and gas prices have been on the uptrend. Scramble in the provinces use recycled plastic (just by looking at the inferior quality of the cups) but you cannot use that in the malls.

7. What if another scramble outfit comes up offering lower prices and having all outlets owned by franchisee to keep his cost down, will not that cause a price-war?

8. On the subject of rent, aside from paying rent for your food cart, you might be asked by the mall to pay another rent for your STORAGE ROOM (usually in the basement parking of the mall) where you keep your freezer or coleman/ice chest and other packaging supplies)

WILL APPRECIATE IF YOU AS THE READER CAN GIVE ME YOUR OPINIONS BY CLICKING ON THE "LEAVE A COMMENT" button below the above Post title.