Business Expansion in a Competitive Market Through Franchising

The franchising industry has been recognized by the Department of Trade and Industry (“DTI”) as an effective pillar of the Philippines’ economy as it contributes 7.8% to the Philippines’ Gross Domestic Product which further leads to the generation of two to three million direct and indirect jobs.

Given the actual and potential scale of the said industry, Executive Order No. 169 s. 2022 (“EO 169”) was signed during the Duterte administration which empowered the DTI to create a franchise registry for the purpose of strengthening and further regulating the franchising industry. As it was noted in EO 169 that 99.5% of establishments are MSMEs of which 68% are in the franchising industry, the EO sought to intensify the government’s efforts in helping the franchising business.

Although the DTI has not yet issued and promulgated an implementing guidelines for the creation of the franchise registry, EO 169 nonetheless provides for the minimum standards with regard to franchising agreements between the franchisor and the franchisee.

While duly executed agreements in compliance with the standards of EO 169 remain binding between the parties, the agreed venture may still have to go through several administrative and legal matters, such as secondary licensing, trademark registration, and litigation, among others, to ensure fair and lawful coordination as well as the protection of all parties involved in the enterprise.

Consider Franchising to Expand your Business Venture

As the steps from the creation of the business to its actual operation are voluminous and may prove to be time-consuming, our team of legal experts and consultants are well-equipped in handling and addressing the legal and regulatory matters applicable in the franchising business.