Aligning Your Documents Before Granting a Franchise

Each of your franchise documents may look sound on its own yet conflict with the others when read together. For example, delivery may be included in the written offer but charged separately in an attachment to the contract. Before franchising your existing business in the Philippines, review the entire package as a single agreement. In franchising, trust is easier to build when what you promise, what both parties sign and what you actually deliver all match.

1. Gather every document that affects the agreement

Do not limit the review to the main contract. Include the written offer, fee schedule, package description, site plan, training schedule, equipment list and any letters granting special terms.

Also include messages that could be understood as promises: free additional training, help with opening or a temporary payment deferral. Not every conversation automatically becomes part of the contract, but it can still lead to a dispute over what was agreed.

Create a register containing:

• The name and date of each document.
• Its version number or identifier.
• Who prepared and approved it.
• Its subject and the related contract provision.
• Its status: draft, approved or superseded.

Put one person in charge of the complete package. They should ensure that an old attachment is not accidentally sent with a new contract. The system need not be complicated; what matters is a clear record and a single source for approved documents.

2. Compare obligations, not just wording

Read the documents side by side, topic by topic. For every promise, ask: who will carry it out, what does it cover, when must it be completed, who will pay and how will fulfilment be confirmed?

For example, the offer and contract may both use the word “training” but mean different things. Does it cover the whole team or only the owner? Does the franchisor pay for the trainer but not travel and accommodation? The actual responsibilities must align, not just the terminology.

Create a simple cross-check table covering:

• Package scope: products, equipment and services included or excluded.
• Fees: amounts or calculation methods, payment deadlines and related conditions.
• Dates: when the agreement takes effect, preparation milestones and the expected opening date.
• Rights: use of the brand, operating territory and any restrictions.
• Attachments: correct titles, versions and references in the main contract.

If you find a conflict, pause the signing process. Do not rely on the explanation that “the applicant already knows” if their copy says something different.

3. Have the relationship between the contract, attachments and manual reviewed

The Philippines has no single comprehensive law covering every aspect of franchising. There are, however, specific rules. Executive Order No. 169, series of 2022, sets minimum content and Department of Trade and Industry (DTI) registration requirements for agreements within its scope involving franchisees that are micro, small and medium-sized enterprises.

The topics covered include 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, is relevant to the licensing of trade marks and associated know-how.

Ask a lawyer to review which documents will expressly form part of the agreement and which will take precedence if there is an inconsistency. Simply stating that “the contract prevails” is not enough if the offer or attachments remain incorrect.

Keep day-to-day operational details separate from contractual obligations. A manual may describe cleaning procedures, but you should not assume it can change agreed fees. The order of precedence among documents does not permit you to override the law or change the agreement at will.

4. Finalise the complete package before signing

Once the review is complete, issue a final package with all attachments included. Make sure no essential details are left blank and that the parties’ names, locations and dates are consistent throughout.

If a special concession has been granted, record it in the appropriate document approved by an authorised person. Clearly identify which standard term it changes. Give the applicant an opportunity to read the entire package and consult their own adviser.

Record any changes made after the first draft was sent. After signing, ensure both parties hold the same complete set of documents. Also brief the implementation team on the obligations they must fulfil, while taking appropriate care with sensitive information.

Practical step: Before every signing, make one final comparison of the offer, contract and attachments. Resolve even a single conflicting promise rather than carrying it through to the opening of a new franchise.