Franchising in the Philippines: Assessing Training and Support

Buying a franchise means more than acquiring the right to use a name and sell its products. You are also buying the opportunity to learn and use a business system. In franchising, a promise of “full support” needs to be measurable: who will help, what will they do, when will they provide it, and who will pay? Before signing, turn broad promises of training and guidance into clear obligations.

1. Break support down into specific tasks

A statement that “training is included” is not enough. Ask for a detailed programme for the owner, manager and staff. It should reflect the day-to-day work involved in the business you are buying, rather than simply introducing the brand.

Find out whether it covers product preparation, safety, cash handling, stock records, equipment use and handling complaints. Also ask whether there is a test or practical assessment that must be passed before the outlet can open.

Create a checklist with four columns: task, person responsible, deadline and evidence of completion. For example, the manager’s training may need to take place before the opening stock arrives. Without a clear sequence, fitting out the premises and training staff could end up happening at the same time, with too little time for either.

Separate support into three stages:

• Before opening: readiness checks, training and equipment testing.
• At opening: a trainer on site, guidance during actual operations and help resolving immediate problems.
• During ongoing operations: visits, refresher training and assistance when new systems or products are introduced.

Also clarify which support is advisory and which tasks the franchisor will actually carry out.

2. Verify the capacity to provide support

Ask for a sample training timetable, an outline of the manual and details of how to request help. It may be reasonable to restrict access to sensitive material, but you should still receive enough information to assess the programme before committing.

Ask whether training is delivered by the franchisor’s own staff or external trainers. Who will step in if they are unavailable? If your location is remote, is there a clear commitment to in-person visits, or will most guidance be provided over the phone?

With permission, speak to several existing franchisees. Include both newly opened and established operators and, if possible, those with locations similar to yours. Specific questions are more useful than simply asking, “Is the support good?”

Ask: What was the last problem you reported? How quickly did someone respond? When was it actually resolved? Was there an extra charge? A quick acknowledgement of a complaint is not the same as a successful resolution.

Assess your own readiness too. Even with a strong programme, you need to set aside time to learn, manage the business and retain skilled staff. Support from the brand is no substitute for day-to-day management.

3. Budget for the full cost of training

The initial fee may cover instruction without covering all the associated expenses. Ask for a written breakdown of what is included, what is optional and which charges are compulsory.

Establish who will pay for:

• Travel, accommodation and meals for participants or trainers.
• Staff wages during training, before the outlet starts generating revenue.
• Ingredients, stock and other training materials.
• Retraining after a failed assessment or when a replacement employee joins.
• Additional visits and training required by changes to the system.

Check how many participants are included and whether there is a charge for each additional person. If training must take place in another city, factor in the time away from your main job or other business.

Set aside a cash reserve for possible delays as well. Do not assume that the start date for loan repayments or rent will automatically move if training is not complete. When planning, distinguish between training costs and the funds needed while the outlet is not yet open.

4. Put commitments and remedies in the contract

The Philippines has specific rules in this area: Executive Order No. 169, series of 2022, sets out safeguards for franchise agreements involving micro, small and medium-sized enterprises. These include minimum requirements for the contents of agreements, such as the rights and obligations of both parties, and the establishment of a register of agreements at the Department of Trade and Industry, or DTI.

This does not automatically make every brand’s training the same. The contract itself remains important, as do the general provisions of the Civil Code on obligations and contracts. Membership of an association or compliance with its code is no substitute for the law or a clear contract.

Have the agreed programme attached as part of the agreement. Specify its scope, timetable, costs, the process for requesting help and how unresolved issues will be escalated. Ask a lawyer to review which remedies would be appropriate if essential training or support is not provided. Do not assume you can simply stop making payments.

Practical reminder: Before signing, you should be able to point to the clauses in the contract that explain who will provide training, what will be taught, the total cost and what happens if the promise is not fulfilled.