There are certain things to consider or look at before choosing a Franchisee chooses a franchise business. The offered business franchise should be carefully investigated of its legitimacy.
The following are to be considered:
A. Franchisor owns the trademark
A Franchisor has documents coming from Intellectual Property Office of the Philippines (IP Philippines) that proves that the trademark being used in the franchise business is his own.
B. the Success of the business of the Franchisor
1. A Franchisor has his own branches operating and earning.
2. A franchise business of the Franchisor has been running for more than a year.
3. Aside from own branches, the Franchisor has already Franchisees.
C. Clear system in operating the business
1. How the business operated is stated clearly in the Operations Manual.
2. The same system is being used in all the franchise business.
D. There's a Franchise Agreement
1. The contracts states the responsibilities of the Franchisor and the Franchisee.
2. The Franchisee is being given enough time to read, study and understand the contract.
3. The agreement has term.
4. There's enough time to consult a lawyer regarding the contract. It has passed the lawyer's standard and the content has been explained clearly.
E. The Franchisor is legitimate if the following are present:
1. The company of the Franchisor is registered in:
a. Securities and Exchange Commission (if corporation)
b. Dept. of Trade and Industry (if single proprietorship)
c. Bureau of Internal Revenue for VAT and other taxes
d Social and Security System for the security of employees
e. Local Government Unit with:
Mayor's Permit, Sanitary Permit, Building Permit and other permits enforced by the municipality or city
2. The trademark is registered in the Franchisor's name in IP Philippines
3. There are other distinctive franchise business that needs to register to different branches of government like the following:
a. BFAD for businesses on food, spa, salon, janitorial service, drugstore
b. DOTC for internet cafe, telecoms business
c. DepEd for educational and review centers
d. TESDA for service and repair shops
e. BSP for remittance centers and pawnshops
4. There's a Franchisor's office
a. A franchise business has its own office that can be visited
b. It has its own employees and people who guides and services the Franchisees in running the business.
F. The Franchisor is a member of a known Franchise Association like:
1. Association of Filipino Franchisers, Inc. (AFFI)
2. Filipino International Franchise Association (FIFA)
3. Food Cart Association of the Philippines (FOCAPHIL)
4. Philippine Franchise Association (PFA)