Franchise Your Business in the Philippines

What you'll learn in this franchising guide

This guide walks you through the key steps to franchising your own business in the Philippines: checking if your business is ready, protecting your brand, preparing legal documents, completing government registrations, and setting up franchise fees, royalties, and support.

Use it as a practical checklist as you work with your accountant, franchise consultant, or lawyer. This is not a substitute for legal advice, but it should help you ask better questions and budget for the process.

Suggested tools from BusinessMindedPinoy.com

While you plan or roll out your franchise, you may find these tools helpful:

Budget Calculator — estimate your preparation and launch costs for your first few franchise units.
Task Management System (demo) — track franchising tasks, legal deadlines, and franchisee onboarding.
Employee Equity & Incentive Model — explore long-term incentives for key staff helping you expand.

Related BusinessMindedPinoy guides

For more detail on specific registration steps, see also:

Quick overview

To franchise in the Philippines you'll: prepare your franchise system (documents, manuals, and IP), register your business and brand, complete government registrations/permits (including any required DTI-related registration for MSME franchises), and then market, screen, and sign franchisees.

Think of it as formalizing what already works in your business, then building a structure so other people can run it under your brand without destroying quality.

1) Decide your franchise model & confirm readiness

Before you offer franchises, you should already have:

Proven, repeatable business model (profitable pilot store(s) with track record).
Clear operations manual or SOPs for day-to-day running of a unit.
Defined training program and support system for franchisees (onboarding, refreshers, audits).
Supplier list and basic supply chain mapped out (so you can standardize quality and pricing).

Franchisees are really buying a system and support, not just your brand name. If your operations are still very ikaw lang ang nakakaintindi, it's usually too early to franchise.

Cost estimate (readiness and documentation)

Mostly internal costs: your time and your team's time to document SOPs and training. If you hire a franchise consultant to document systems, expect roughly 100,000 – 1,000,000+ depending on scope and brand size.

2) Protect your brand and intellectual property

As a franchisor, you should normally own or control the brand you are licensing. This usually means registering trademarks with IPOPHL for your business name and/or logo, and sometimes for specific products.

File trademark applications with IPOPHL (Intellectual Property Office of the Philippines).
Check that your mark is not confusingly similar to existing registrations.
Align your branding across stores, packaging, and marketing to match the trademark.
Membership in organizations like the Philippine Franchise Association (PFA) often expects trademark filings.

Cost estimate (trademark / brand protection)

Official IPOPHL filing fees typically start around 2,000 – 6,000 per mark (depending on class & details). If you hire an IP lawyer or agent, expect 10,000 – 50,000+ in professional fees per mark.

3) Set up your legal document pack

Work with a lawyer familiar with franchising to prepare a minimum legal pack:

Franchise Agreement — rights, fees, duration, territory, transfer rules, renewal, and termination.
Franchise Disclosure Document / Franchise Offering Circular (FDD/FOC) or equivalent disclosure pack (business background, risk factors, fees, obligations, financial expectations).
Operations Manual — detailed SOPs covering daily operations, branding, reporting, HR basics.
Template store lease heads of terms and sample supplier agreements.
Training schedules, audit checklists, and complaint/incident handling flow.

There is no single nationwide franchise law with a mandatory standard FDD format like in some countries, but Executive Orders and DTI guidance (for example, EO 169 and related issuances) require registration or minimum standards for certain MSME franchise arrangements. A good lawyer will align your contracts and disclosure with these.

Cost estimate (lawyer & documents)

Professional fees vary widely, but for a basic franchise documentation pack and legal advice, expect roughly 50,000 – 300,000+ depending on complexity and the law firm.

4) Corporate & tax registration (must)

Your franchisor entity must be properly registered and tax-compliant. In practice this means:

If you are a corporation or partnership: register with the SEC and keep your General Information Sheet (GIS) and annual filings updated.
If you operate as a sole proprietor for certain micro-franchises, secure DTI Business Name Registration (for both your main entity and franchisee entities as applicable).
Register with the BIR: TIN, BIR Form 2303, books of accounts, receipts/invoices (ATP or online invoicing), and choose correct tax type (non-VAT/VAT).
Secure Barangay Clearance and Mayor's Business Permit for your head office or main branch.

Cost estimate (corporate & local permits)

DTI Business Name: about 230 (barangay) up to around 2,030 (national scope).

SEC Incorporation: depends on capital, but small companies often pay around 2,000+ in filing and documentary fees, plus any professional fees.

Local permits (Barangay + Mayor's Permit): roughly 1,000 – 30,000+ depending on LGU and business size.

5) Franchise registration & DTI-related compliance

For MSME-focused franchises, Executive Orders and DTI rules (for example, EO 169 and follow-on issuances) may require you to register or at least meet minimum terms and disclosure requirements for franchise agreements.

Many franchisors voluntarily coordinate with DTI and submit disclosure/registration packs to reduce regulatory and consumer-protection risk, even where not strictly mandated.

Review current DTI and EO guidance on franchising and MSME protections.
Align your Franchise Agreement and FDD/FOC with required minimum terms and disclosure items.
Prepare any required registration forms and supporting documents for submission.

Cost estimate (DTI-related compliance)

Direct government registration fees are generally modest, but you should budget 20,000 – 200,000+ for consultant and professional time to prepare the documentation and coordinate with DTI, depending on how complex your franchise is.

6) Set franchise fees, royalties & investment range

Your franchise fee and royalty model must be realistic for both you and your franchisees. Typical components:

Initial franchise fee: one-time fee charged when a franchise signs. Small kiosks might start around 150,000, while major restaurant chains can charge 10,000,000+ per store.
Ongoing royalty: commonly 3% – 10% of gross sales, depending on industry and level of support.
Marketing / advertising fund: often an extra 1% – 3% of gross sales to fund brand-wide campaigns.
Estimated total initial investment: fit-out, equipment, opening inventory, working capital. This can range from around 200,000 for very small kiosks to 10M+ for full-service restaurants or large retail.

Be transparent in your disclosure document about what the franchise fee covers (training, site review, initial marketing, etc.) and what is on the franchisee's own budget.

7) Operations: site selection, approvals, training & pilot

For each new franchise unit you generally need to:

Approve the proposed site (foot traffic, competition, visibility, target market).
Help the franchisee secure a lease with acceptable terms and assignability clauses.
Coordinate LGU inspections (fire safety, sanitary, zoning) and occupancy permits, especially for food or high-footfall locations.
Train the franchisee and key staff on your operations manual and brand standards.
Run a pilot period and quality checks before you officially grand open the branch.

Cost estimate (operations & training)

The franchisee usually shoulders build-out and equipment costs. As the franchisor, budget travel, trainers, and materials — commonly around 50,000 – 500,000 per new unit depending on how hands-on your support is.

8) Marketing, franchisee recruitment, and signing

To attract and filter good franchisees, you typically:

Prepare a franchisee application form and basic profile requirements.
Ask for supporting documents such as government IDs, proof of funds (bank certifications), business background, and sometimes a simple business plan.
Use a structured process: initial inquiry → briefing → application → evaluation → approval/decline → contract signing → payment of initial fees.
Ensure your disclosure pack / FDD is provided early enough for the applicant to review.

Many franchisors also maintain a franchise landing page and attend franchise shows or MSME events (for example, PFA or DTI roadshows) to find qualified leads.

9) Ongoing support & compliance

Franchising is a long-term relationship. To keep quality and your brand strong, you should:

Provide regular refresher trainings and new product roll-out guidance.
Maintain a reliable supply chain and approved supplier list.
Schedule audits and mystery shopping to protect brand standards.
Keep your own tax and labor compliance in order (BIR filings, SSS/PhilHealth/Pag-IBIG for staff, and LGU permits for any company-owned units).
Monitor franchisee financial health (late royalties, complaints, poor performance) and enforce the contract fairly but firmly.

Some franchisors also maintain a franchisee council or regular meetings to gather feedback and coordinate marketing.

Typical timeline (rough)

Preparation of documents & systems: around 1 – 6 months (longer if you need to professionalize operations).
Legal drafting, IP filing, and registrations: roughly 2 – 8 weeks, but many tasks can run in parallel.
Recruiting & onboarding the first franchisee: about 1 – 3 months after your materials are ready.

These are only rough estimates. Your timeline depends heavily on how organized your existing business is, how quickly you can gather documents, and how complex your concept is.

Franchising readiness checklist (you can use this now)

Business model: Do you have a proven, repeatable unit and written SOPs? (Yes / No)
Operations Manual: Drafted and tested in at least one or two stores? (Yes / No)
Franchise Agreement: Draft reviewed with a lawyer? (Yes / No)
Trademark: IPOPHL registration filed or at least prepared? (Yes / No)
Entity & tax: SEC/DTI and BIR registrations completed for the franchisor? (Yes / No)
LGU permits: Barangay and Mayor's Permit process mapped for typical franchise outlets? (Yes / No)
Fees model: Initial fee, royalty percentage, and marketing fund defined? (Yes / No)
Franchisee docs: Application form and FDD/FOC or disclosure pack prepared? (Yes / No)

Where to get help

Philippine Franchise Association (PFA): code of ethics, events, and guidance for serious franchisors.
DTI: business name registration and updated guidance on Executive Orders and MSME-focused franchising rules.
Experienced franchise lawyer / consultant: highly recommended for drafting your Franchise Agreement, disclosure materials, and advising on compliance.

Key risks & practical tips

Don't rush. Franchising multiplies both your strengths and your weaknesses. If your systems are weak, those weaknesses will spread to every branch.

Disclosure is your friend. Even if not required in the same way as other countries, a full disclosure pack (FDD/FOC) reduces misunderstandings and potential misrepresentation claims.

Protect your supply chain. Standardized suppliers and quality checks keep franchisees from cutting corners that can damage your brand.

Choose franchisees carefully. It is usually better to grow slower with strong partners than to approve anyone who can pay the fee.