Supporting Franchisees Before You Franchise Your Business

A franchisor’s responsibilities do not end when an outlet opens. When equipment fails, sales records become problematic or operational advice is needed, franchisees should know who to turn to. Before franchising your existing business in the Philippines, make sure you can deliver the ongoing support you promise. Reliable support in a franchise network requires dedicated people, time, processes and funding.

1. Define the scope of ongoing support

Distinguish pre-opening assistance from support provided once an outlet is trading. Initial training and shop preparations have a defined end point. Operational advice, system troubleshooting and guidance on product changes may be needed throughout the contract term.

List the services you can realistically provide. For each one, specify:

• Scope: What problems will you help resolve?
• Method: Will support be provided by phone, written message or an on-site visit?
• Availability: On which days and at what times will someone be available?
• Limits: When will a separate technician or another professional be needed?
• Responsibilities: What must the franchisee prepare or do?

For example, support might include investigating discrepancies between sales and stock records, but not keeping daily records for the franchisee. It might include liaising with a repair provider, but parts and labour are not automatically free.

Avoid promising “full support” without defining what that means. Specific services you can deliver are more useful than broad statements that each party may interpret differently.

2. Assess your team’s capacity and budget

If you handle every enquiry yourself, the arrangement may work for your own shop but not for multiple outlets in different locations. Start by recording the actual time spent supporting your current operations.

Count preparation, discussions, travel, document reviews and follow-up after visits—not just meeting time. Also consider when demands may overlap, such as during openings, product changes or disruptions to a system used by the whole network.

Use this simple estimate:

Total support time = routine support across all outlets + scheduled visits + contingency time for unexpected problems.

Compare this with the time your team can genuinely allocate after allowing for their other duties. Appoint a main contact and a deputy so that support continues when someone is away or ill.

Include salaries, travel costs, communication tools and external specialists in the budget. Do not rely solely on fees from future franchisees to fund support for existing ones. If capacity is insufficient, reduce the number of simultaneous openings or strengthen the team before taking on another outlet.

3. Align your promises with the contract and the law

The Philippines has no single comprehensive law covering every aspect of franchising. The Civil Code governs contracts, while the Intellectual Property Code applies to the use of trade marks and related rights. Competition, employment, tax and consumer protection laws may also apply, depending on the issue.

Executive Order No. 169, series of 2022, is also important for franchise agreements involving micro, small and medium-sized enterprises. Its minimum requirements include a clear description of both parties’ rights and responsibilities, along with details of the assistance the franchisor will provide.

It also directs the Department of Trade and Industry (DTI) to create a registry of agreements covered by the order. Seek a lawyer’s review and confirm the applicable procedures and current rules with the DTI before offering a franchise. Do not confuse business registration with compliance with these obligations.

The contract should clarify which support is included in regular fees, when additional charges apply and how extra costs are approved. The contract, franchise marketing materials and the team’s actual capacity should all be consistent.

4. Test the system before committing to expansion

Run support drills using realistic scenarios: broken equipment, inaccessible sales records or the absence of a key manager. Submit requests through the designated channel and check that they reach the right person without anyone having to call the owner directly.

Distinguish the time taken to provide an initial response from the time needed to resolve an issue fully. A problem may be acknowledged quickly but still require investigation or replacement parts before it can be fixed. Set realistic standards for both.

Record recurring problems and use those findings to improve the system, rather than repeatedly offering temporary fixes.

Practical takeaway: Before taking on a new franchisee, make sure every support commitment has a clear scope, a designated person responsible, sufficient funding and a process that has been tested.