how to start franchising your 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

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.

How to start a franchise business?

Create a shortlist of your franchising options. Start by doing online research and listing down any franchises that fit your criteria. You can go through official websites, review pages, and social media for in-depth information. Next, visit the franchise’s stores themselves. Find out how they are doing and who their customers are.

How to start a business in the Philippines?

The best way to start your business and make it successful is to comply with all the crucial requirements mandated by the government of the Philippines. Before that, it is significant that you identify first the kind of business that you want to venture in terms of ownership and business structure.

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.

What are the franchising requirements in the Philippines?

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.

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 do I get a franchise business permit in the Philippines?

How To Register Your Franchise Business: 4 StepsDecide on Your Business Structure. ... Register Your Business Name. ... Register With the BIR. ... Apply for a Business Permit for Your Office and Store Location. ... For DTI Registration.For SEC Registration. ... For BIR Registration. ... For Business/Mayor's Permit.More items...•

What are the two main types of franchising in the Philippines?

There are two main forms of franchising — product distribution franchising and business format franchising.

Is it better to operate a franchise than start your own business?

Franchises have a higher rate of success than start-up businesses. You may find it easier to secure finance for a franchise. It may cost less to buy a franchise than start your own business of the same type.

What are the legal requirements for a franchise?

Generally, the offer and sale of franchises find legal basis in laws such as:The Indian Contract Act, 1872.The Foreign Exchange Management Act, 1999 (FEMA).The Competition Act, 2002.The Trademarks Act, 1999.The Copyright Act, 1957.The Patents Act, 1970.The Design Act, 2000.The Income Tax Act, 1961.More items...

Is there a franchise law in the Philippines?

Ultimately, regulation must be of such form as to provide adequate legal protection without sacrificing economic freedom. There are no franchise laws in the Philippines.

Do I need mayor's permit for online business?

All businesses, whatever the legal form, are required to secure a mayor's permit or municipal license from the city or municipality where they are located.

How do I get a franchise DTI?

RegistrationLog in at www.bnrs.dti.gov.ph. ... Click the “New Application” which you can find on the left-hand side of the webpage. ... Fill out the application form providing accurate information.Select “Download” for your business name certification and click “Submit”.Your certification will be sent to your email.More items...

How can I legalize my business in the Philippines?

Register your business in the Bureau of Internal Revenue (BIR)Prepare the requirements. ... Fill up the BIR Form 1901. ... Go to your respective Revenue District Office (RDO). ... Pay the Registration Fee. ... Claim your Certificate of Registration (COR). ... Purchase and register your books of account. ... Secure an Authority to Print (ATP).

Can a sole proprietor franchise?

A single franchise owner is a sole proprietor when it comes to the financial responsibilities and tax-filing procedures. Your franchise fees are merely part of the costs of your doing business as a sole proprietor.

What are the legal requirements for a franchise?

Generally, the offer and sale of franchises find legal basis in laws such as:The Indian Contract Act, 1872.The Foreign Exchange Management Act, 1999 (FEMA).The Competition Act, 2002.The Trademarks Act, 1999.The Copyright Act, 1957.The Patents Act, 1970.The Design Act, 2000.The Income Tax Act, 1961.More items...

What are the requirements for a potential franchisee to be part of the franchise system of Dunkin Donuts?

In order to open a Dunkin' Donuts franchise, you must have a net worth of $500,000 and at least $250,000 in liquid assets. Having the necessary capital available is essential for applying to become a Dunkin' Donuts franchise owner.

What factors should you consider when deciding to acquire a franchise?

What Should I Consider Before Buying a Franchise?The type of experience required in the franchised business.The hours and personal commitment necessary to run the business.The track record of the franchisor, and the business experience of its officers and directors.How other franchisees in the same system are doing.More items...

What are the requirements in obtaining business permit in the Philippines related to health care?

Business Permit Requirements in the PhilippinesBarangay Clearance. ... Certificate of Registration. ... Contract of Lease if you are leasing your business' area, however, if you own the place, a copy of the Transfer Certificate of Title (TCT) or Tax Declaration is what you would provide.Certificate of Occupancy.More items...

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

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.

How do I get a franchise?

Once you have decided on the franchise you want, talk to the franchisor directly by contacting them. Their contact details can usually be found in their website. If they don’t have a website, you can go to their nearest office branch and inquire there.

What is business format franchise?

Lastly, a business format franchise not only allows the distribution of the franchised product but also gives the franchisee the right to the franchisor’s business concept or model. In this arrangement, the franchisor gives the franchisee access to its business methodology and could also provide the training, marketing, ...

What are the different types of franchising?

There are three common types of franchising arrangements: product franchising, manufacturing franchise, and business format franchising. In product franchising, the franchisor allows the franchisee to distribute the former’s products and use its trademark and name for a fee. The franchisor could also require the franchisee to purchase ...

What is the most common type of franchise in the Philippines?

Here in the Philippines, the most common type of franchise is the business format franchise. Notable examples are fast food chains such as McDonalds and Jollibee. It is estimated that around 55% of franchises are food-related businesses while 45% are in retail. While there are no laws that specifically cover franchising in the country, franchising agreements are considered contracts and governed by the Civil Code. Franchising arrangements could also be considered as technology transfer arrangements and covered by the pertinent provisions in the Intellectual Property Code.

What is franchising in business?

What is franchising? Franchising is an arrangement wherein a person (the franchisee) is allowed by another (the franchisor) to market the latter’s product or service including its trademark, logo, or name and to utilize its business formula for a fixed fee.

What is the term for a franchise agreement?

This contract is called the Franchise Agreement (FA) and it contains the terms and conditions of the franchise arrangement such as length of effectivity, renewal, grounds for termination and other provisions.

What is the failure rate of a startup?

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. But not everyone wants high risk businesses. If you are one of those people who prefer to start small with sure and steady gains, ...

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.

What is AFFI in business?

(AFFI), one of the country’s most trusted business organizations that aim to promote responsible franchise business ownership for micro, small, and medium enterprises.

What is franchising business model?

A franchising business modelincludes the usual components of a typical business plan, such as: Generally, a franchising business model contains information on what the franchisor will provide a franchisee in terms of rights, trademarks, business processes and operational systems, trainings, and other kinds of support.

How to promote your franchise?

Utilize social networking sites such as Facebook and Instagram, and have marketing collaterals such as flyers and brochures made to let the public know about your franchise business .

What does it mean to start a franchise?

Starting a franchise operation means that you are open to letting others help you grow your business.

Is franchising a business rocket science?

Franchising a business isn’t rocket science. Jorge Wieneke, president of theAssociation of the Filipino Franchisers, Inc. (AFFI), shares important insights to help you assess if you're ready to expand your business into a franchise. You’ve taken the plunge and invested your hard-earned cash into a thriving business.

Should You Start With Franchising

Is Franchising the best business strategy for you? Do you want to begin a business, but you have less preparation? Are you starting a business by yourself?

Franchising Advantages

When you purchase a franchise, you get the privilege to use the franchiser’s brand name and trademark, including their logo, design, and marketing.

Franchising Disadvantages

The high capital that you need to shell out in a franchise is one disadvantage of franchising. The underlying investment is twice as (or significantly higher) than starting a business with no preparation.

Tips in Getting A Franchise

You should have a list of potential franchise businesses you like to get. Look for franchises that have registered and completed all the legal requirements in the Philippines. Check for the franchise registration that applies to their industry.

What to Ask Before Buying a Franchise

When you have thought of a franchise that you plan to buy, get in touch with them, and pose inquiries.

Conclusion

The wide choices for franchises in the Philippines are good and challenging for new business owners. Finding the franchise that suits you best can be exceptionally overwhelming – so will do your diligence to know more about the franchise that you intend to buy and that you have the capital to begin.

Required Documents to Be Submitted to the Franchisor

After the entrepreneur has made up his mind, he has to prepare certain documents to legalize his owning of the franchise business he chose. Below are some of the more common pertinent documents a franchisor needs in order to keep the ball rolling.

Minor Requirements After Site Location Approval

Once there is a go-signal from the company that the proposed business location is approved, there are other legal requirements that a franchisee must comply in order to finalize his transaction and start his business franchise.

Business Documents You Need to File Before Starting Your Franchise Business

In the Philippine business setup, the following are important documents needed to start a franchise business. The steps are as follows: