How to choose a legitimate franchising company? One of the simplest ways to get into the world of business is through owning a franchise. But how do you spot a good franchises from the scam companies?

Legitimate Franchising Company

For all you budding entre-Pinoys out there, here are 10 guidelines in spotting good franchises and how not to be fooled by fakes!

1. Complete Legal Papers and Permits from the Government such as:
a. DTI for Sole Proprietor / SEC for Partnership and Corporation.
b. Updated Mayor’s Permit and other local permits (i.e Sanitary, Building, Occupancy, et al)
c. BIR Registered
d. Have secured necessary certification and permit from any Government Agency that governs the business operations of the company (i.e for food BFAD and DOH, for school and training TESDA, DEPED, DSWD and CHED)
e. All trademarks are duly registered to Intellectual Property Office. Make sure that the Registered Trademark is under the name of the franchiser)

* All Legal Papers must be consistent and registered to the Company Name and to its authorized Officer like the Company President, Proprietor or Managing Director.

2. The company operates at least for more than 2 years under the same company name.

3. With available retrievable Public Documents from Securities and Exchange Commission like SEC Registration, Articles of Incorporation, Audited Financial Statements.

4. With 2 or more Owned Outlets and at least 2 Franchise Outlets

5. With employees that work per department of the company.

6. Has a corporate office that is reachable. Make sure that the corporate office is the one registered in the BIR Registration and other Government Permits. Likewise, a Food Franchise must have a commissary center.

7. With Franchise Agreement / Contract that is ready for your review. Franchise agreement must contain imperative details of the Business Operation and your relationship with the franchiser.

8. With Business Operation support like Logistics, Marketing, Management and other possible support that a Franchiser can extend to the Franchisee. Usually a franchiser would give a feasibility study to the location of the business. This is one of the good support services that a Franchiser can provide to his franchisee.

9. Franchise company must have its own accredited list of suppliers of raw materials.

10. Must be a member of the Association of Filipino Franchisers Inc (AFFI) or Philippine Franchising Association (PFA).

Source: Rafael Galang Canare
Executive Director, Association of Filipino Franchisers Inc (AFFI)

from Hanep Buhay,