Franchising in the Philippines: Is Running a Franchise Right for You?

You may be able to afford a franchise without being able to take on the daily work it requires. Before choosing a brand, assess whether its operations fit your time, skills and management style. Finding the right fit in franchising is not simply about accepting an applicant with sufficient capital: buyers also need to make sure they can fulfil the role expected of them.

1. Find out what the owner actually does

Do not settle for descriptions such as “easy to run” or “systems already in place”. Ask for a clear account of a typical day and week for the owner. Establish which tasks can be delegated and which require personal oversight.

Ask the franchisor:

• When must the owner be present at the outlet?
• Who checks sales, cash, stock and departures from operating standards?
• How often are meetings held and reports submitted?
• Which decisions require the franchisor’s approval?
• What is expected when a member of staff is unexpectedly absent or a customer complains?

If possible, ask for permission to observe operations at an existing outlet. Watch not just the busy periods but also preparation, cleaning, record-keeping and closing procedures. Speak to current franchisees about their actual responsibilities, without asking for confidential information.

Your aim is to see the work behind the brand, not just the polished shopfront.

2. Compare the role’s demands with your skills

Create a table with four columns: required task, evidence of your ability, gaps, and how you will address them. This is more useful than a general belief that you are hardworking and willing to learn.

Assess yourself in the following areas:

• People management: Can you give clear instructions, address poor performance and organise staff rotas?
• Financial understanding: Can you read sales and expense records and ask questions when the figures do not add up?
• Customer service: Can you handle complaints calmly while following policy?
• Following systems: Are you comfortable using prescribed processes even when you would prefer to do things your own way?

Give a concrete example for each answer. Sales experience does not automatically mean you can supervise staff or oversee cash handling.

Ask someone who knows your experience, but has no stake in the purchase, to review your assessment. Ask them to identify weak assumptions rather than simply endorse your preferences.

3. Test your schedule and account for the value of your time

Compare the time required with your existing work, travel and family commitments. Draw up a sample weekly schedule based on the actual operating hours. Include tasks carried out before opening and after closing.

Do not count time already committed to other obligations as free time. If you plan to stay in your current job, establish whether you can meet the requirements for being on site without a conflict.

If your plan depends on hiring a manager, include realistic salary costs and associated employment obligations. Check that the agreement permits this arrangement. Appointing someone to manage the business does not automatically remove your own responsibilities.

Consider the income or opportunities you would give up as well. In your assessment, distinguish payment for your own work from the return on your investment. This helps you judge whether you are buying a business that suits you or simply creating a job you cannot sustain.

4. Separate eligibility from legal obligations

Passing an interview does not mean that all the terms are safe to accept. Treat preliminary screening, final approval and signing the agreement as separate stages. Before paying, find out whether any document you are asked to sign creates obligations.

The Philippines has no single comprehensive law covering every aspect of commercial franchising. However, Executive Order No. 169, series of 2022, sets minimum content and registration requirements for covered franchise agreements involving micro, small and medium-sized enterprises. This does not certify that a brand is suited to your abilities.

The Civil Code also applies to contractual obligations. Have a lawyer review the provisions on personal involvement, appointing a manager and responsibility for operations. Verbal acceptance of your limited availability is not enough if the written obligations say otherwise.

Practical takeaway: Choose a brand you can manage, not just afford. If the work, time requirements and your skills do not align, revise your plan first or postpone the purchase.