2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

Personal (https://www.securitybank.com/) Business (https://www.securitybank.com/business/)



(https://www.securitybank.com/)
 24/7 Customer Service (tel:0288879188)

 Login (https://securitybankonline.securitybank.com/login/_ga/2.50161263.818153058.1495781939-
1000766540.1490777807)
 Search

Branches & ATMs (/map/) Online Forms (/online-forms/)

Personal Home (https://www.securitybank.com/) Business Home (https://www.securitybank.com/business/)

 Login (https://securitybankonline.securitybank.com/login/_ga/2.50161263.818153058.1495781939-
1000766540.1490777807)
Contact us (https://www.securitybank.com/contact-us/)

Branches and ATM Maps (https://www.securitybank.com/map/)

Online Forms (https://www.securitybank.com/?page_id=189441)

Personal (https://www.securitybank.com/) Business (https://www.securitybank.com/business/)

Accounts (https://www.securitybank.com/personal/accounts/) 

Cards (https://www.securitybank.com/personal/credit-cards/) 

Loans (https://www.securitybank.com/personal/loans/) 

Investments (https://www.securitybank.com/personal/investments/) 

Gold (https://www.securitybank.com/personal/gold/)

Blog (https://www.securitybank.com/blog/)

FINANCIAL BLOG
https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 1/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

FEATURED GUIDES QUIZZES UPDATES VIDEOS Back to main site >

HOME  

GUIDES 

The What, Why, and How of

Franchising in the Philippines
BY: SECURITY BANK TEAM

MARCH 7, 2019

GUIDES (HTTPS://WWW.SECURITYBANK.COM/BLOG/GUIDES/)

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 2/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

For a lot of Filipinos, having their own business is the ultimate dream, but often an unrealized one.
This is not surprising, as starting a business is extremely risky—it will cost one’s hard-earned money,
effort, and time. And it won’t always be a guaranteed success.

Franchising could be the answer.

It’s a way for people to go into business without starting from scratch (and arguably with higher
success rates). If you’re interested in starting a franchise business but have no idea where to start,
here’s our basic guide on what it is, its pros and cons, and how to start one.

What is Franchising?

F hi i i “ h df di b i
https://www.securitybank.com/blog/what-why-how-franchising-philippines/ d di ib i d d i h h 3/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines
Franchising is a “method for expanding a business and distributing goods and services through a
licensing relationship,” as stated by the International Franchise Association. Simply put, franchising
is when a person or company (the franchisee) pays another person or company (the franchisor) a set
of fees and royalties for the right to do business using their trademarks, products, services, and even
business model and operating systems.

(/business/loans/sme-

business-express/)

Types of Franchises

There are two main forms of franchising — product distribution franchising and business format
franchising. In product distribution franchising, the relationship between the franchisees and
franchisors is very much like a standard dealer-supplier relationship. Franchisees are allowed to use
the franchisors’ trademarks and distribute their products, but in return, they must pay fees and
purchase a minimum amount of products. In business format franchising, the relationship between the
two parties is much more complex where there is also an emphasis on sharing business
methodologies, operating systems, and support. Depending on the agreement, franchisees not only
get the license to sell the trademark products or services, but could also get access to the business’s
operating systems and a wide range of support on things like site selection, training, quality control,
and marketing.

Pros and Cons of Franchising

G i f hi h l d
https://www.securitybank.com/blog/what-why-how-franchising-philippines/ di i ll i b i f h b i 4/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines
Getting a franchise has several advantages over traditionally starting a business from scratch, but it
would be wrong to say that it’s totally risk-free. Below is a list of some of the franchise business
model’s pros and cons to help you decide if it’s for you.

Pros of Franchising
• Established Brand and Faster Return of Investment

Franchising lets you enjoy a pre-existing customer base, which usually takes months if not years
to build. This could potentially help with earning your investment back faster.

• Ready-Made Operating Systems

One could say that franchising is simply replicating existing businesses with already existing
procedures, systems, and practices—you just need to follow them!

• Franchisor Support

Depending on the agreement, franchisors could provide the franchisees a wide range of pre-
opening and ongoing support on things like site-selection, crew training, and marketing. Being
backed by a reputable franchisor also helps with loan approvals and negotiation with vendors.

Cons of Franchising
• Expensive Fees and Royalties

In franchising, there are fees you must pay for such as processing fees and franchise fees. These
could range from several thousands up to multiple millions in total. In a way, you could think of
these fees as the price to pay for the convenience that franchising offers.

• Limited Control

Remember that you’re buying the rights to sell the franchised products or services, not the
business itself. Franchisees are obliged to follow procedures and restrictions set by the
franchisors which could include manufacturing guidelines, quality control, and pricing.

• System-wide Effect of Brand Reputation

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 5/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

While you might enjoy instant brand recognition through franchising, it also means that a major
blow to the brand could just as easily spread to the franchisees and negatively affect their
business results.

How to Start Franchising?

Okay, so you’ve weighed the pros and cons of franchising and have decided to pursue it. Now, what?

1. Choose a franchise
Whether you’re aiming for a small food cart business or a restaurant chain, it’s important that you
take into account certain factors and do proper research first when selecting a franchise business.

• Budget

Establish the amount that you’re willing to invest, so you can narrow down your options. If you
find yourself being short on capital, you could consider getting a franchise business loan
(https://www.securitybank.com/business/loans/sme-business-express/franchise/).

• Company Reputation and Legitimacy

Nobody wants to unknowingly invest in an illegitimate and unreliable business, but it doesn’t
mean it’s impossible to find success with lesser known franchise brands. Find out if the person
or company is properly licensed and registered in appropriate government offices like DTI and
SEC. It also helps to check if they’re a part of reputable franchise groups like AFFI (Association
of Filipino Franchisers, Inc.) (http://affi.com.ph/membership/our-members/), PFA (Philippine
Franchise Association) (http://www.pfa.org.ph/members-database/), and FIFA (Filipino
International Franchise Association) (http://verbandmanagement.net/fifa/members/).

• Market, Location, and Competition

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 6/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

Brand power alone isn’t always enough to make a franchise business successful. Make sure that
whatever franchise you choose would fit in your preferred site location and the nearby market.
For instance, it might not be the best idea to set up a high-end restaurant franchise near an
elementary school where the primary market are kids.

To give you an idea on what franchise businesses you can consider, here’s a short list of popular
franchise brands here in the Philippines.

• Potato Corner
• Master Siomai
• Siomai House
• 7 Eleven
• Dunkin’ Donuts
• Chooks To Go
• Jollibee
• Mang Inasal

2. Apply for your chosen franchise

Once you’ve trimmed down your franchise options to one, you can finally proceed with applying!
Application procedures and requirements differ from franchisor to franchisor, but in general, you can
expect to do the following:

• Submission of Documents

Below are the usual documents that many franchisors require. It’s a good idea to prepare these
even if you haven’t fully decided on what franchise you want. But if you already have a
particular franchise business in mind, you can check their website or get in contact with them
for other requirements they might have.

• Letter of Intent
• Application Form (completely filled-out)
• Valid Government-Issued IDs
• Resume
• Target Site Location Details

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 7/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

• Meetings, Site Inspection, and Evaluation

After submitting your documents, the franchisor will reach out to you to schedule a meeting
and/or site inspection. In these meetings, expect to be interviewed and oriented on the details
of the franchise. You can also take this chance to ask them any important questions that you
might have.

• Contract Signing

Finally, you’ll be contacted again if you’re deemed qualified to be a franchisee. Review the
contract thoroughly, and sign it if you’re okay with the terms and conditions.

3. Manage your franchise business well

Even with existing guidelines, always strive to continuously improve the business and how you
manage it in ways that you can. Enhance your marketing skills. Improve the quality and speed of your
service. Keep track of any market or industry trends. Reach out to the franchisor or fellow
franchisees for tips and advice. Remember, getting approved for a franchise is just the beginning!
Don’t let the journey end so soon by mismanaging your franchise business.

(https://www.securitybank.com/business/loans/sme-business-express/franchise/)

 Twitter  Facebook  LinkedIn

(http://twitter
why
text=The%20What%2C%20Wh
philippines%2F)
how franchising
com/share? philippines%2F&t=The%20Wh
(http://www
u=https%3A%2F%2Fwww
why how franchising
facebook com/sh
secu mini=true&url=https%3A%2F%
philippines%2F&title=The%20
(http://www
why how franchising
linkedin com/sha

FEATURED ARTICLES

Our Business Mortgage Loan Online Application Form is now live! (https://www.securitybank.com/blog/our-business-
mortgage-loan-online-application-form-is-now-live/)

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 8/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

Chatbot Upgrade! You Can Now Update Contact Info and Check Application Status (Plus Other Cool Features)
(https://www.securitybank.com/blog/chatbot-upgrade-cool-new-features/)

Understanding How Auctions Work (https://www.securitybank.com/blog/understanding-how-auctions-work/)

LATEST ARTICLES

Our Business Mortgage Loan Online Application Form is now live! (https://www.securitybank.com/blog/our-business-
mortgage-loan-online-application-form-is-now-live/)

Complete Cashback Mastercard: UPGRADED (https://www.securitybank.com/blog/complete-cashback-mastercard-

upgraded/)

Chatbot Upgrade! You Can Now Update Contact Info and Check Application Status (Plus Other Cool Features)
(https://www.securitybank.com/blog/chatbot-upgrade-cool-new-features/)

SUBSCRIBE

Enter email address

Subscribe to our newsletter

We're here to help.

Have any questions?

Visit our Help Center (https://help.securitybank.com/)

Get in touch with us

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 9/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

Send us a message (https://www.securitybank.com/talk-to-us/)

Stay in Touch
This is the best way to get the latest and greatest of BetterBanking. Get updates on our products, promos, events and more!

Enter email address

Subscribe to our newsletter

Follow us on

    
(https://www.facebook.com/SecurityBank)
(https://www.linkedin.com/company/security-
(https://www.instagram.com/securitybank)
(https://www.twitter.com/securitybankPH)
(https://www.youtube.com/securitybank)
bank-
corporation)
For inquiries and comments, please call our Customer Service hotline at +632 8887-9188 (tel:0288879188), 1-800-1-888-1250
(tel:180018881250) (Toll-free for PLDT landline) or email us at customercare@securitybank.com.ph
(mailto:customercare@securitybank.com.ph).

Specific to credit card inquiries, please email us at customercontact@securitybank.com.ph

(customercontact@securitybank.com.ph).

Security Bank Corporation is regulated by the Bangko Sentral ng Pilipinas (+632 8708-7087 (tel:0287087087) loc.2584
(tel:2584) | consumeraffairs@bsp.gov.ph (mailto:consumeraffairs@bsp.gov.ph) | https://www.bsp.gov.ph (https://www.bsp.gov.ph)).

Chat with BSP Online Buddy at (BSP Webchat:http://www.bsp.gov.ph/ (http://www.bsp.gov.ph/) | SMS: 021582277
(tel:021582277) | FB: Bangko Sentral ng Pilipinas) (http://www.bsp.gov.ph/)

Accounts

Cards

Loans

For Sale

For Lease

Investment

SB Capital

Wealth

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 10/11
2/16/22, 12:51 AM The What, Why, and How of Franchising in the Philippines | Security Bank Philippines

Transfer

Others

Security Bank Corporation is a proud member of BancNet

Security Information (/security-information/) | Terms and Conditions (/terms-and-conditions/)

Member: PDIC. Maximum Deposit Insurance for Each Depositor is P500,000.

Security Bank Corporation is a proud member of BancNet

Security Information (/security-information/) | Terms and Conditions (/terms-and-conditions/)

Copyright © 2020 Security Bank Corporation. All rights reserved.

6776 Ayala Avenue, Makati City | 8887-9188 (tel:0288879188)

https://www.securitybank.com/blog/what-why-how-franchising-philippines/ 11/11