Module 6 - Franchising in the Philippine Setting

Question 1

Three Types of Franchising in the Philippines:

Answer 1

(1) Business Format Franchise
(2) Product Distribution Franchise
(3) Management Franchise

Question 2

What is Business Format Franchise?

Answer 2

the franchisor gives the rights to trademarks, trade names, business process and the system in order for the franchisee to sell the product, for a fee.

Question 3

What is Product Distribution Franchise?

Answer 3

the franchisor is responsible for providing the product, and the distributor is then able to sell the product on.

this method is used often for larger products, such as vending machines and cars

Question 4

What is Management Franchise?

Answer 4

focus on the franchisee managing the franchise.

a business that you own and operate, but with other people handling the day-to-day operations. As a result, rather than using a franchise name to offer your own skill set, as in job and executive franchises, you are in charge of the organization.

Question 5

How to franchise a business in the Philippines?

Answer 5

(1) Reach out your target franchisor
(2) Prepare and submit franchise requirements
(3) Meet the franchisor
(4) Review the franchise agreement carefully

Question 6

Franchise requirements

Answer 6

(1) Completed franchise application form
(2) Letter of Intent (LOI)
(3) Map of your proposed site
(4) Resume or Curriculum Vitae
(5) Valid Ids

Question 7

Topics to discuss during meeting with the franchisor

Answer 7

(1) Franchise business specifics
(2) Franchisee qualifications
(3) Target location
(4) Next steps

Question 8

Details when reviewing a franchise agreement

Answer 8

(1) Length of effectivity of the agreement
(2) Renewal period, terms, and fees
(3) Total franchise investment costs (e.g franchisee fee, royalty fee, etc.)
(4) Franchise package inclusions
(5) Franchise territory
(6) Franchisor-approved suppliers of products
(7) Grounds for termination of the agreement