A franchise is a type of business model where a franchisor grants the right to use its trademark, products, services, and operating systems to a franchisee in exchange for an initial fee and ongoing royalties. The franchisee operates a business using the franchisor's proven methods, systems, and branding, while also receiving support and training from the franchisor.
The concept of franchising is based on the idea of sharing a successful business model, brand, and proven methods of operation. The franchisor provides the franchisee with the tools, resources, and support needed to start and run a business, while the franchisee is responsible for implementing the franchisor's systems and maintaining the quality of the products and services.
In return for the franchisor's support and resources, the franchisee pays an initial franchise fee and ongoing royalties based on a percentage of their sales. This allows the franchisor to earn revenue from the success of the franchisees, while also expanding their brand and reach.
Overall, franchising is a mutually beneficial relationship that allows both the franchisor and franchisee to achieve their goals and grow their businesses. The franchisor can expand their brand and reach, while the franchisee can benefit from the franchisor's proven methods, systems, and support to start and run a successful business.
Here are the guidelines to create a franchise in the Philippines:
Develop a franchise system: Develop a franchise system that outlines the policies, procedures, and guidelines for operating a franchise. This should include information on how the franchise will be managed, what support and training will be provided to franchisees, and what the franchise fee and royalty structure will be.
Create a franchise disclosure document: In the Philippines, all franchise companies are required to prepare a Franchise Disclosure Document (FDD) that outlines important information about the franchise, such as the investment required, the history of the company, and any legal actions or disputes.
Register the franchise with the Department of Trade and Industry (DTI): In order to franchise a company in the Philippines, you must register the franchise with the DTI. This involves submitting the franchise disclosure document, a franchise agreement, and other required documents to the DTI.
Obtain a franchise permit: After registering the franchise with the DTI, you must apply for a franchise permit. This permit must be renewed annually.
Find franchisees: Once you have obtained a franchise permit, you can start looking for franchisees. This can be done through advertising, networking, and other marketing efforts.
Provide training and support: Provide training and support to your franchisees to help them get started and be successful in operating their franchise. This should include training on how to run the franchise, how to use the company's products or services, and how to manage the business.
Monitor and evaluate franchisees: Regularly monitor and evaluate franchisees to ensure they are following the franchise system and to identify any areas for improvement.
By following these steps, you can franchise a company in the Philippines and grow your business through franchising. However, it's important to keep in mind that franchising can be a complex process, and it's important to seek the advice of legal and financial experts to ensure the process goes smoothly.