how to start a franchise business philippines

How to Start a Franchise Business in the Philippines

• 1. Attend Franchising Seminars This step should always be your starting point. ...
• 2. Conduct Comprehensive Research Armed with information from PFA seminars, you should now have an idea on how to approach your research on the specific industry from which you plan to get a franchise. ...
• 3. Incorporate Your Business ...
• 4. Identify the Franchises to which You Are Interested ...

Full Answer

Is it easy to start a successful franchise in the Philippines?

Franchising in the Philippines is both technical and easy to understand if you manage to familiarize franchising basics and its interesting facts. Hence, aside from the fees and others, pay attention to their business models and observe how it works. The Importance of Business Model

How do I become a successful franchisee?

Use what your franchisor gives you. Manage your time efficiently. Acknowledge the fact that you will likely need franchise mentoring and assistance. Give yourself a chance to work on your business without having to always work in the business.

What are the different types of franchising in the Philippines?

These are the ones you can find locally: Business Format Franchising is probably the most common here in the Philippines. In this setup, the franchisor provides the franchisee a whole system of doing business, aside from the use of their products, services, and trademark.

Do I need a business plan to open a franchise?

Financial projection – based on the sales projection you did earlier, you should also be able to create a timetable of when you will reach your return on investment (ROI) and become profitable While not usually required, a business plan is useful for getting your franchise application approved.

What is a guest speaker?

How to get franchising information?

What franchises were there in the 1990s?

What is the Philippine Franchise Association?

Does PFA have franchises?

What are the legal requirements for franchise in the Philippines?

There are no specific laws governing franchising in the Philippines. Franchise agreements are regulated by the applicable provisions of the: Intellectual Property Code (IPC). Civil Code.

How do I start a franchising business?

How to Start a Franchise BusinessIdentify a Business Opportunity. ... Research Current Owners and Potential Competitors. ... Determine Market Interest. ... Research Startup Costs. ... Create a Business Plan. ... Form an LLC or Corporation. ... Choose an Initial Location.

Does franchisee need to register in DTI?

EO 169 sets out the terms and conditions of franchise agreements with MSME franchisees and requires franchise holders to register with the Department of Trade and Industry (DTI) – if they have a franchise agreement with an MSME franchisee.

How much money is needed to start a franchise?

Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.

What are the 4 ways to become a franchisee?

4 ways to become a franchiseeFigure out your passion and skill set. Buying a franchise business shouldn't just be about facts and figures. ... Prepare to buy-in. ... Investigate franchise brands. ... Speak to experts and existing franchisees.

What is the most profitable franchise?

Most Profitable FranchisesDunkin'7-Eleven.Planet Fitness.JAN-PRO.Taco Bell.Orangetheory Fitness.Great Clips.Mac Tools.More items...•

What documents are needed to open a franchise?

Required Documents to Be Submitted to the FranchisorLetter of Intent to Franchise. A Letter of Intent is used in most business transactions like franchising. ... Application Form. ... Site Location Proposal. ... Business Name Registration (Department of Trade and Industry) ... Barangay Clearance. ... Business or Mayor's Permit.

What are the documents needed to franchise business?

There are two ​legally required documents you should become very familiar with before ​franchising your business: the Franchise Disclosure Document, and the Franchise Agreement.

How does franchising work Philippines?

Simply put, franchising is when a person or company (the franchisee) pays another person or company (the franchisor) a set of fees and royalties for the right to do business using their trademarks, products, services, and even business model and operating systems.

What is Starbucks franchise fee?

What are the Financial requirements for a Starbucks licensed store? You need to pay the licensing fee of between $50,000 – $315,000 and you must have over $1,000,000 in liquid assets to be considered for a licensed store by Starbucks.

Is a franchise a good investment?

If you're a fledgling entrepreneur or a seasoned business person wanting to diversify your holdings, you've probably wondered, “Are franchises a good investment?” The simple answer is yes, especially if a great opportunity presents itself. There is an obvious appeal to starting a business via buying a franchise.

Do franchise owners have to work?

Owning a franchise unit can be demanding, requiring work of 60 to 70 hours a week, but owners have the satisfaction of knowing that their business's success is a result of their own hard work. Some people look for franchise opportunities that are less demanding and may only require a part-time commitment.

How much do franchise owners make?

When researchers accounted for the inflations caused by the few top franchises, it was established that the average annual income of 51 percent of franchisees is less than 50,000 dollars. The study also found that only 7 percent of franchise owners earn over 250,000 dollars a year.

How do you become a franchise owner?

Here are the five steps to becoming a franchise owner yourself.Do every last bit of your homework. Just because you want to buy into an existing chain doesn't mean you don't have to do a massive amount of research. ... Incorporate or form an LLC. ... Inquire and apply to the franchisor. ... Obtain financing. ... Everything else.

What is the cost of McDonald's franchise?

The Franchise fee of McDonald's goes for around 30 lakhs INR; however, this fee is also attached with a 4 % monthly royalty fee as service fees to the brand. The actual investment amount differs, a business owner needs to keep a rough estimate of around 6 to 14 Crores.

Is franchise business A Good Idea?

Risk – The biggest advantage of owning a franchise business is investing into a business which is already tested and proven. The probability of the risk regarding the profits and growth of the business is likely to be very low.

What is franchising?

In the simplest term, franchising means acquiring a right from the business franchisor to market the same product or services of the owner, includi...

What is the future of franchising?

The economic changes play a part in the franchising landscape. For as long as the thriving economy is there and businesses are doing well, franchis...

Why is franchising important?

Franchising allows businesses to expand the business in a way that they do not use their resources. This system also gives opportunities to aspirin...

How does franchising work?

Typically, a business decides first whether to go franchising or not. If it is a viable option, they will seek a franchise developer’s help to comp...

100+ Best Franchise Businesses in the Philippines For Every Budget

Despite over 70% of franchises 1 being affected by the pandemic, the Philippine Franchise Association (PFA) still strongly believes in the recovery of the franchising industry in the country. In fact, they even hosted the virtual expo Franchise Asia Philippines 2021 2 with the belief that there are business opportunities available for enterprising Filipinos.

Basic Guide to Franchising in the Philippines | Founder's Guide

With an estimated failure rate of 80 to 90 percent, the startup life is not for the faint of heart. Launching your own startup requires a lot of patience, dedication, and willingness to take risks.

DTI Requirements and Laws for Business Franchising in the Philippines

In case you didn’t know it yet, there are new laws governing the business franchising in the Philippines today and it is being implemented by none other than the authorities by the government of the Philippines – DTI or the Department of Trade and Industry. I have listed below the different steps to follow for franchise owner who are offering investment opportunities to their franchisors ...

Documents Needed In Franchising a Business in the Philippines

One of the most sought-after and most profitable ways in gaining financial stability in the Philippines is to own a franchise business. There are many young entrepreneurs who are hooked in this kind of business because there are studies which show that the success rate is almost 90%. This is the reason why franchise business […]

What is a guest speaker?

The guest speakers are successful franchisees who have no reservations in sharing their experiences with their audience. At the end of the presentation, there will be an open forum where you can direct questions to any of the guest speakers. The seminars also provide an avenue to network.

How to get franchising information?

1. Attend Franchising Seminars. This step should always be your starting point. Seminars about franchising are a great way to get valuable information on the business. They present historical data in the franchising industry, including the latest statistics and figures.

What franchises were there in the 1990s?

Most of them were fast food, and Subway, El Polo Loco, Auntie Anne’s Pretzels, and Kenny Rogers Roasters were the popular ones . There were also nonfood franchises, such as Roto-Rooter and Mail Boxes Etc.

What is the Philippine Franchise Association?

PFA is a voluntary self-regulating organization that oversees the franchising industry. The majority, if not all, of the successful franchises in the Philippines are members of PFA.

Does PFA have franchises?

Today, organizations such as the PFA have many franchises in their directory. Even banks that offer small business loans, such as Bank of the Philippine Islands, have franchises in their programs. They can connect you with the franchises to which you are interested. Pages: 1 2 3.

What is franchising?

Franchising means buying the rights to sell or distribute the products and services of an established business. The fees and royalties paid include the use of logos, trademarks, business models, and operating systems.

What is product franchising?

A product franchising arrangement is similar to a supplier-dealer relationship. Franchisees can use the trademarks and sell the products, but it comes with the necessary fees. They are also required to buy a minimum number of products to get franchising rights.

Why do franchisors charge fees?

Fees come with franchising as they are inherent to buying the rights to the brand and of course the processing. Depending on the value of the business, the summary of fees could soar up from thousands to millions. The bigger the business name, the more expensive the fees you need to pay.

Why is franchising business format so complicated?

Business format franchising is much more complicated than the previous arrangements because it involves a sharing of methodologies, support, and operating systems. Aside from selling the products/services, it also entails access to business models and a variety of support such as location search, quality control, training of personnel, and marketing efforts.

What to do once approved for franchising?

Once approved, the next big thing to do is manage the business well .

Why is it important to check the legitimacy of franchisors?

Checking the legitimacy of these franchisors will ensure you don’t sink your money into a shady deal, also it will ensure that you are operating within the law.

What is a letter of intent?

Letter of intent. A letter that includes your contact information and details of your franchise proposal

1. Allocate ample time for brainstorming for business ideas

It is very important to note that brainstorming for business ideas is very crucial for any business aspirants who wish to start on their entrepreneurial journey.

2. Layout the business plan

Cliché as it may sound, but this holds true until today: “Failing to plan is planning to fail.” When starting a new business venture, a business plan is needed to be developed to guide you on the steps to be done.

3. Prepare your initial investment

The initial investment is a prerequisite before starting any business. To get a rough amount to prepare, it is best to determine the possible costs that you may need to pay. This may include licenses, permits, legal fees, insurance, branding, marketing, trademarking, inventory, property leases among others.

4. Identify your business structure

In the Philippines, there are three common business structures - sole proprietorships, partnerships, and corporations .

5. Follow necessary legalities imposed by the government

As mentioned, licenses, permits, legal fees, insurance, branding, marketing, trademarking, inventory, property leases are among the costs that need to be covered once you plan to start your business.

6. Choose your team

Prepare job descriptions and specifications that will be crucial in choosing the members of your team. Take time in thinking and outlining the positions needed to be filled.

7. Advertise your business

The business industry has been highly competitive. Standing out above from the competitors can be a challenge. You need to attract clients and customers.

What is franchising?

In simple terms, franchising means getting the right to operate a business from the franchisor for a fixed price, which includes the usage of the trademark and the business model. The interested party is the franchisee and the owner of the business is the franchisor.

What is business format franchise?

In a business format franchise, the franchisor does not only allow the distribution of the products but also gives franchisees the right to the franchisor’s business concept or model. Here, the franchisor gives the franchisee access to its overall business methodology.

What is a trade name franchise?

Also known as the trade name franchise, this type of franchise grants to the franchisor the power to give rights to every franchisee in terms of selling its products and the use of trademarks for a fee.

What is a franchise agreement?

The Franchise Agreement (FA) document is the paper that specifies all the duties of the franchisor and the franchisee, duration, and the provisions.

Why do franchisors collect financial information?

Franchisors continuously collect financial information from their franchisees in order to improve its business model, and to audit the royalty payments ( if there is).

Why is franchising important?

Any aspiring entrepreneurs who want to venture into franchising are possible because it lets them start a business without the risk of debt or the cost of equity.

How to handle a franchise business?

You must choose a business concept that is well-established and tested over time. You cannot handle a business franchise just by downloading necessary manuals; you need thorough hands and minds as your back-up. Therefore, make sure you understand how your team prepared the overall business franchise program.

At a Glance: The 9 Best Franchise Business Opportunities in the Philippines for Post-COVID Era (and Beyond)

According to the PFA, it’s a great opportunity now to invest in a franchising business and ride the wave of the industry’s recovery. They are predicting a franchising golden age by 2025 3, but only for businesses that can adapt to the new normal. Consider the following franchise businesses:

The Ultimate List of Franchise Business Opportunities in the Philippines

Food and beverage carts have a limited menu that serves only their specialties. The same can be said for food and beverage kiosks, which is a slightly larger version of the cart.

Who Should Start a Franchise Business?

Not everyone should go into franchising. If you don’t understand the risks and responsibilities involved, you may just be wasting your time and money. Listed below are the kinds of people who might find success in franchising:

Tips and Warnings

Don’t expect overnight success. Just like most businesses – franchising is a marathon, not a sprint. You have to accept that it might take several months or years to get your money back and start bringing in profits. You need to consistently promote and deliver quality services to achieve this.

Frequently Asked Questions

No. If a franchisor is guaranteeing the success of your franchise, then it’s probably a scam. The success of a franchise, just like any other business, hinges on many different factors that franchisors typically don’t get involved in.

What is a guest speaker?

The guest speakers are successful franchisees who have no reservations in sharing their experiences with their audience. At the end of the presentation, there will be an open forum where you can direct questions to any of the guest speakers. The seminars also provide an avenue to network.

How to get franchising information?

1. Attend Franchising Seminars. This step should always be your starting point. Seminars about franchising are a great way to get valuable information on the business. They present historical data in the franchising industry, including the latest statistics and figures.

What franchises were there in the 1990s?

Most of them were fast food, and Subway, El Polo Loco, Auntie Anne’s Pretzels, and Kenny Rogers Roasters were the popular ones . There were also nonfood franchises, such as Roto-Rooter and Mail Boxes Etc.

What is the Philippine Franchise Association?

PFA is a voluntary self-regulating organization that oversees the franchising industry. The majority, if not all, of the successful franchises in the Philippines are members of PFA.

Does PFA have franchises?

Today, organizations such as the PFA have many franchises in their directory. Even banks that offer small business loans, such as Bank of the Philippine Islands, have franchises in their programs. They can connect you with the franchises to which you are interested. Pages: 1 2 3.