Philippine franchise sector expected to grow by 8–10% in 2026

The Philippine franchise sector is expected to grow by 8–10% in 2026, according to Steve Benitez, president of the Philippine Franchise Association (PFA). In a SunStar report published on 24 September, he said demand for franchise businesses remained strong despite rising oil prices and economic uncertainty.

More affordable franchises attract interest

According to Benitez, interest is particularly strong in franchises requiring an investment of less than ₱1 million (one million Philippine pesos). His forecast highlights a clear trend: as the sector continues to expand, prospective investors are looking for opportunities with lower start-up capital requirements.

However, the report referred to interest, not the number of new agreements signed or outlets opened. It provided no breakdown by brand, business type or location for franchises below that investment threshold. Nor did it specify how much of the expected growth would come from these businesses.

That distinction matters when interpreting the news. Strong interest does not yet amount to actual investment, and a low start-up cost is not, in itself, evidence of future profitability. For prospective franchisees, the report is a starting point for assessing offers, not a substitute for examining the business itself.

Growth continues, but at a slower pace

The expected growth of 8–10% this year is close to last year's forecast, according to the report. However, it is below the recorded expansion of 10–12% in 2024 and 15% in 2023.

The comparison shows that the PFA remains positive, but expects a more measured pace of expansion. The forecast is not for a contraction in 2026, but for continued growth at a lower rate than in the two earlier years for which actual results were cited.

The forecast must also be distinguished from the final outcome. The 8–10% range is an expectation for the full year, not a confirmed result. The source report did not give an actual growth rate for 2025, so the earlier forecast should not be treated as that year's result.

Sector could reach ₱1.3 trillion within five years

Benitez also said the franchise sector could reach ₱1.3 trillion within the next five years. He linked this outlook to continued demand for franchise businesses, despite challenging conditions in the wider business environment.

This is a projection, not a figure the sector has already reached. The source report did not state the starting value or provide a detailed calculation behind the ₱1.3 trillion estimate. There is therefore insufficient information to construct a separate year-by-year growth path towards that figure.

The challenges cited include higher oil prices, economic volatility and the potential impact of conflict in the Middle East. Despite these risks, Benitez's outlook for 2026 remains positive. The key message is that opportunities for expansion coexist with risks in the business environment.

What to assess before investing

For those considering the Philippine franchise market, the report provides broader context for investment decisions: growth is expected, and there is clear interest in more affordable options. However, it does not identify which brand, location or offer would suit an individual investor.

As a practical step, ask for a written explanation of what the quoted investment covers. Assess the franchise fee, premises fit-out costs and working capital separately. Also review the obligations and support set out in the agreement before making a decision.

Practical reminder: Use the PFA forecast as a guide to the sector's general direction, not as a guarantee of returns. Prioritise clear costs, adequate working capital and thorough due diligence on your chosen franchise.