QFA: Align the offer and contract before granting a franchise

Make sure every promise in the offer, contract and supporting documents is consistent before the first franchisee signs. This is the central message of guidance published by the Quality Franchise Association (QFA) on 4 November 2026 for businesses preparing to expand in the Philippines through a franchise network.

Review more than just the main contract

Under the QFA guidance, the entire set of documents should be reviewed as a single agreement. A clear main contract is not enough if the written offer, fee schedule or description of the package says something different.

Documents to gather include the site plan, training schedule, equipment list and any letters granting special terms. It is also important to identify which documents are drafts, approved versions or superseded copies.

The QFA recommends keeping a register recording each document’s name and date, version identifier, author and approver, and the relevant contract provision. Each document’s subject and current status should also be clear.

One person should oversee the complete package so that an outdated attachment is not accidentally included with a new contract. This review is not simply about checking that the paperwork exists, but ensuring that the versions given to the prospective franchisee are correct and consistent.

Compare obligations, not just wording

The guidance recommends reading the documents side by side and comparing them by topic. For every promise, it should be clear who will fulfil it, what it covers, when it will be completed, who will pay and how fulfilment will be confirmed.

Five areas are highlighted for comparison: package scope, fees, dates, rights and attachments. The scope should identify which products, equipment and services are included or excluded. For fees, the amount or calculation method, payment deadlines and related conditions should match.

Dates include when the agreement takes effect, key preparation milestones and the expected opening date. Rights cover use of the brand, the operating territory and any restrictions. The titles, versions and references to attachments in the main contract must also be correct.

Where there is a conflict, the QFA advises putting signing on hold. It is not enough to say that the prospective franchisee understands the actual arrangement if their copy says something different.

Clarify the relationship between the contract and the manual

The guidance also notes that the Philippines has no single comprehensive law covering every aspect of franchising, although specific rules must be taken into account.

Executive Order No. 169, series of 2022, sets minimum content and Department of Trade and Industry registration requirements for agreements within its scope involving micro, small and medium-sized enterprise franchisees. It covers matters including rights and obligations, fees, duration, renewal, termination, cooling-off periods and dispute resolution.

The Civil Code is also relevant to contracts, while the Intellectual Property Code, or Republic Act No. 8293, applies to the licensing of trademarks and related business know-how.

The QFA recommends asking a lawyer to review which documents expressly form part of the agreement and which take precedence if there is an inconsistency. Simply stating that the contract prevails is not enough if the offer or an attachment remains incorrect.

Day-to-day instructions should also be distinguished from agreed obligations. A manual may set out cleaning procedures, but it should not be assumed that it can change an agreed fee.

Complete the package before signing

Following the review, the final package should be issued with all attachments. No material details should be left blank, and the parties’ names, locations and dates must be consistent.

Any special concession should be recorded in the appropriate document, approved by an authorised person, with a clear reference to the standard term it changes. The prospective franchisee should also have an opportunity to read the entire package and consult their own adviser.

After signing, both parties should hold identical, complete sets of documents. The team responsible for implementation must also be briefed on the obligations they need to fulfil, while sensitive information is protected.

Practical step: Before each signing, compare the offer, contract and all attachments again. Resolve any conflicting promise, however isolated, before it carries through to the franchise’s opening.