MANILA, Philippines - Two franchise organizations are opposing government plans to set guidelines for franchisors.
The Philippine Franchise Association (PFA) and the Association of Filipino Franchisers Inc (AFFI) both said there is no need for guidelines. Earlier, the Department of Trade and Industry (DTI) announced they will be setting guidelines for franchisors in an attempt to curb franchise scams that usually target overseas Filipino workers (OFWs) and retirees.
Trade Director Victorio Dimagiba said that there is a need to form a technical working group with franchisors to help protect the would be franchisees. “There must be guidelines in place in order to avoid fraud,” he noted.
Dimagiba said that this is a security issue that must be addressed because there are reports that unscrupulous traders have been scamming OFWs and retirees.
“The guidelines for franchisors must be clear in order to protect consumers,” Dimagiba noted. He said that the guidelines may come in the form of a memorandum of understanding (MOU) with the franchise association. He said this is expected to be signed before the end of the year.
AFFI Executive Vice President Richard V. Sanz said that although the guidelines will be able to stop the scams, regulations will reduce the vibrance of the industry especially since the Philippines is being positioned as the franchising hub of Asia. “If regulated then the growth will be abated.”
PFA Chairman Emeritus Sammie Lim however said there is no need to regulate the franchisors because they are already regulating themselves. “Through the years I believe we have done a good job of regulating ourselves.”
Dimagiba agreed that members of credible associations like PFA have done a good job of policing themselves. However, he said there have been reports of fraud which usually involve smaller companies. For instance, he said the company Pran.com has targeted OFWs. The company charged 500,000 for a franchise. There is now a warrant of arrest for the incorporators of this company.
Dimagiba said the guidelines will place a cap on the number of years the firm should be operating before a franchise is offered. He said this will highly depend on the profitability of the company but he noted that certain rules must be in place.