Franchising in the Philippines

Franchising in the Philippines

Generally, a franchise essentially means the grant of a right. In business format franchising, the right is usually granted by an entrepreneur or private person. The subject matter of a franchise agreement is the business format being franchised. It is the right to use the concept, the franchisor’s manner and system of doing business, his trademarks, trade and industrial secrets such as the recipe to a secret menu, a special ingredient in a formulation, a precise manner of conducting affairs, and other proprietary know-how. Examples of business format franchising are franchises of Jollibee, Master Siomai Foodcart, Fresh salon parlor, etc.

Franchising has gained popularity because it enables a person to do business without the birthing pains of starting from scratch. This is so because the franchisor has already committed all the mistakes in the past, and what he is presenting the franchisee is the tried and tested way of doing business. In fact, a franchisee need not even have good business acumen. All he has to do is to follow the map or “walkthrough” (usually called an Operations Manual) given by the franchisor to succeed. And in most cases, franchisees are successful.

If you are thinking of franchising out your business or becoming a franchisee of a franchise, you need to seek expert legal advice as to the franchise agreement, permits and licenses and other business concerns. Normally, a franchise agreement is voluminous and lengthy as it specifies in detail what the respective duties, obligations, and prohibitions of the parties to the contract are. Despite its length, the parties must be aware of the stipulations and provisions in the franchise agreement. Upon signing the franchise agreement, the franchisee has essentially agreed to the terms of the franchise agreement, including payment of the stipulated franchise fee, royalties, penalties and other assessments due to the franchisor from the franchisee.

To help you navigate through these legal obligations, ask for competent legal assistance. The lawyers and staff of Nicolas & De Vega Law Offices are adept at handling franchising concerns in the Philippines. E-mail us at or visit our website for more details.

The information provided in this website should not be construed as legal advice or opinion. This is for information purposes only and is not intended to solicit or create, and does not create, an attorney-client relationship between NDV Law and any person or entity. Please consult with a lawyer about your concerns.