The Ultimate Guide to Business Franchising in the Philippines
Business franchising in the Philippines is a thriving industry that offers numerous opportunities for entrepreneurs to thrive in the market. With a growing economy and a consumer base that is willing to try new products and services, franchising has become a popular option for many aspiring business owners.
Why Franchise in the Philippines?
Franchising offers a unique opportunity for entrepreneurs to tap into an established brand and business model, while also benefiting from the support and training provided by the franchisor. In the Philippines, the franchising industry has been steadily growing, with an estimated 1,500 franchise brands operating in the country.
Benefits Business Franchising Philippines
There benefits franchising Philippines, including:
- Access established brand customer base
- Training support franchisor
- Proven business model operational support
- Opportunities growth expansion
Franchising Industry Statistics
| Year | Number Franchise Brands | Estimated Market Value (in PHP) |
|---|---|---|
| 2015 | 1,000 | 1.45 trillion |
| 2018 | 1,500 | 2.05 trillion |
| 2021 | 2,000 | 2.75 trillion |
Case Study: Successful Franchise Business Philippines
One of the most successful franchise businesses in the Philippines is Jollibee, a fast-food chain that has expanded globally. With over 1,300 stores in the country and more than 200 international branches, Jollibee has become a household name in the Philippines and beyond.
Legal Requirements Franchising Philippines
When considering franchising in the Philippines, it is important to be aware of the legal requirements and regulations. Philippines own Franchise Code, governs relationship franchisor franchisee. Important parties understand rights obligations law.
Overall, business franchising in the Philippines presents a lucrative opportunity for entrepreneurs who are looking to start their own business. Right brand support, franchising rewarding venture potential growth success.
Franchise Agreement
This Franchise Agreement (“Agreement”) is entered into as of [Date], by and between [Franchisor], a [State of Incorporation] corporation, having its principal place of business at [Address] (the “Franchisor”), and [Franchisee], a [State of Incorporation] corporation, having its principal place of business at [Address] (the “Franchisee”).
Whereas, the Franchisor is engaged in the business of [Description of Franchisor`s business] and desires to grant to the Franchisee a franchise to operate a business using the Franchisor`s proprietary trademarks, service marks, and trade names in the Philippines; and
Whereas, the Franchisee desires to obtain a franchise from the Franchisor to operate a business using the Franchisor`s proprietary trademarks, service marks, and trade names in the Philippines;
1. Grant Franchise
Subject to the terms and conditions of this Agreement, the Franchisor grants to the Franchisee a non-exclusive right to operate a business using the Franchisor`s proprietary trademarks, service marks, and trade names in the Philippines (the “Franchised Business”).
2. Term
The term of this Agreement shall be for a period of [Number of years] years, commencing on the Effective Date, unless earlier terminated as provided in this Agreement.
3. Fees
The Franchisee shall pay to the Franchisor an initial franchise fee of [Amount] upon the execution of this Agreement. In addition, the Franchisee shall pay to the Franchisor a continuing royalty fee of [Percentage] of the gross revenues of the Franchised Business on a monthly basis.
4. Training Support
The Franchisor shall provide the Franchisee with initial training and ongoing support as specified in the Franchisor`s operations manual.
5. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines.
6. Arbitration
Any dispute arising out of or relating to this Agreement shall be settled by arbitration in the Republic of the Philippines in accordance with the rules of the Philippine Dispute Resolution Center, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
7. Entire Agreement
This Agreement constitutes the entire understanding and agreement between the Franchisor and the Franchisee with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral, relating to such subject matter.
8. Execution
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
| Franchisor: | [Franchisor Name] |
|---|---|
| Franchisee: | [Franchisee Name] |
| Date: | [Date] |
Top 10 Legal Questions About Business Franchising in the Philippines
| Question | Answer |
|---|---|
| 1. What are the legal requirements for franchising a business in the Philippines? | Setting up a franchise in the Philippines involves complying with various legal requirements, including registration with the Securities and Exchange Commission (SEC), as well as submission of a disclosure document and payment of fees to the SEC. Additionally, franchisors must comply with the disclosure requirements set forth in the Philippine Franchise Association Code of Ethics. |
| 2. What are the key legal considerations when drafting a franchise agreement? | Franchise agreements in the Philippines must adhere to the requirements of the Philippine Franchise Association Code of Ethics, which governs the rights and obligations of both franchisors and franchisees. Key considerations include territorial rights, fees, intellectual property rights, and termination provisions. |
| 3. How can a franchisor protect their intellectual property rights in the Philippines? | Franchisors can protect their intellectual property rights in the Philippines by registering trademarks and other intellectual property with the Intellectual Property Office. It is also essential to include provisions in the franchise agreement that address the use and protection of the franchisor`s intellectual property. |
| 4. What are the legal remedies available to a franchisor in the event of a franchisee`s breach of contract? | In the event of a franchisee`s breach of contract, a franchisor in the Philippines can seek legal remedies such as termination of the franchise agreement, enforcement of non-compete provisions, and recovery of damages through arbitration or court proceedings. |
| 5. What are the disclosure requirements for franchisors in the Philippines? | Franchisors in the Philippines are required to provide prospective franchisees with a disclosure document containing information about the franchisor`s financial status, litigation history, and other relevant details. Failure to comply with these disclosure requirements may result in penalties imposed by the SEC. |
| 6. How can a franchisee terminate a franchise agreement in the Philippines? | A franchisee in the Philippines can terminate a franchise agreement by following the termination provisions set forth in the agreement, which may include giving notice to the franchisor and complying with any post-termination obligations. It is essential for franchisees to seek legal advice before initiating termination to avoid potential legal consequences. |
| 7. What are the legal implications of transferring a franchise in the Philippines? | Transferring a franchise in the Philippines requires compliance with the transfer provisions in the franchise agreement and obtaining the consent of the franchisor. Franchisees must also ensure that the transferee meets the qualifications set forth by the franchisor and complies with any transfer fees or requirements. |
| 8. How does Philippine competition law impact franchising agreements? | Franchising agreements in the Philippines must align with the provisions of the Philippine Competition Act, which prohibits anti-competitive agreements and abuse of dominant position. Franchisors and franchisees must ensure that their agreements do not violate competition law to avoid legal repercussions. |
| 9. What are the legal obligations of a franchisor in terms of training and support for franchisees? | Franchisors in the Philippines have legal obligations to provide adequate training and support to franchisees as stipulated in the franchise agreement and the Philippine Franchise Association Code of Ethics. Failure to fulfill these obligations may result in legal disputes and liabilities for the franchisor. |
| 10. How can a franchisee protect themselves from potential legal disputes with the franchisor? | Franchisees can protect themselves from potential legal disputes with the franchisor by seeking legal advice before entering into a franchise agreement, conducting due diligence on the franchisor`s background and reputation, and negotiating favorable terms in the agreement that safeguard their rights and interests. |