Professional Documents
Culture Documents
In order to protect the interest and welfare of a prospective franchisee, the DTI-Bureau of Trade
Regulation and Consumer Protection (BTRCP) has issued the following advisory:
2. Definition of Terms
2.1. Franchise Agreement is a written contract or agreement between two or more parties by which a
Franchisor grants the Franchisee right to engage in the business of offering, selling, or distributing
goods or services under a marketing plan/system/concept, for a certain consideration. Unless
otherwise provided, said right includes the use of a trademark, service mark, trade name/business
name, know-how, logo-type advertising, or other commercial symbols associated with a particular
business.
2.2. Franchisor is a person, individual or a corporation, duly registered with the Department of Trade
and Industry (DTI) or the Securities and Exchange Commission (SEC)
2.3 Franchisee is a person, individual or a corporation, duly registered with the Department of Trade
and Industry (DTI) or the Securities and Exchange Commission (SEC)
2.4 Franchise Disclosure Information refers to a set of information and documents that needs to be
disclosed by the Franchisor to the Franchisee and/or prospective Franchisee
Before a person decides to engage in or acquires a franchise business, due diligence should be
done by the prospective franchisee.
3.1.1 Business address, email address, internet home page/website, fax numbers and other contact
details
3.1.3 Parent companies and affiliates, if any, and their respective roles in the Franchise, and
Franchisors declaration if any affiliate is a supplier and what they will supply.
3.1.4 Names of the Board of Directors and officers with a brief description of their qualifications and
background, ownership of interests and references
3.1.7 Description of the business concept, which includes brand image, brand personality, unique
selling proposition, target market, mission and vision, among others
3.1.9 Certificate that the Franchisor is a member in good standing of any franchisor association and
that the franchisor has no pending administrative, civil or criminal case.
3.1.10 Declaration of the Initial Fee, amount that will be collected and services covering these fees.
3.1.11 Training that will be provided, number of persons, how long and training modules
3.1.12 Number of years company has operated and number of years it has franchised with
corresponding numbers of company owned branches and franchised outlets.
3.1.15 A provision that requires the franchise applicant to seek adequate legal and financial counsel
before signing the Franchise Agreement
4.2 A current certified true copy of Certificate of Good Standing from the SEC
4.3 Updated list of trustees, officers and members of the organization including their addresses and
5. Self-Policing of members
This Advisory aims to promote and encourage the Franchise industry to self-police its own ranks by
setting a Code of Ethics and Standards for grievance or dispute resolution mechanism to redress
complaints against its members, including issues arising from transactions with their franchisees,
prospective or otherwise.
6. Publication
This advisory shall be published in newspapers of general circulation and shall be part of the DTI
Information, Educational and Communication Program