How to spot a franchise scam

MANILA, Philippines - Ever felt tired of working 8 am to 5 pm for that cruel boss and that company with a salary that can hardly make ends meet? Ever thought of going into business instead but do not know where to start?

The Association of Filipino Franchisers, Inc. (AFFI) can help you with your needs.

In a recent interview, Armando Bartolome, chairman of the Association of Filipino Franchisers Inc., said tapping the help of an expert organization such as AFFI can help spell the difference between success and failure in business.

AFFI, founded in 1997, is an organization committed to promoting responsible micro, small and medium enterprise businesses through franchising. Its members include corporate presidents, CEOs and prominent Filipino businesses who recognize the competitive potential of the local franchising industry in the global market.

Its vision is to promote world class Filipino entrepreneurs through responsible franchising and to promote excellence and growth in responsible franchising while service the interest of members and stakeholders.

Among its notable members are Reyes Barbecue, Figaro Coffee Company and Big Apple Express Spa.

While franchising can be a good business, Bartolome warned prospective franchisees against fly-by-night or unscrupulous traders who only want to get one’s money.

“It is important to conduct due diligence. Go to the stores and check the business. Check the commissary and know the franchisor,” Bartolome said.

Frank Reyes, founder and chief executive officer of Reyes Barbecue and AFFI 2014 board member, warned prospective franchisees against bogus companies.

One sign that the company is not bogus if it is a member of a franchise association. Another sign is that if the company guarantees huge returns on the business.

Here are other warning signs:

• The company gives the interested franchisee instant approval

• The company does not care about location

• The testimonies are too-good-to-true. Celebrity endorses must be verified

• The owner does not meet with prospective franchisees

• The company is not registered with the Intellectual Property Office

• The company refuses to give its list of franchisees

• The organization is flimsy

•They do too much sweet-talking

Interested franchisees would do well to get in touch with AFFI for guidance and support if they want to get into the business, Bartolome said.

Victor Fernando, franchise director of Big Apple Express Spa and incoming AFFI president for 2014 said the organization has lined up several projects for the whole year to help improve franchising in the Philippines.

These include empowerment of members through continuous learning seminars, preparation and information for ASEAN Economic Community and Business Integration 2015, continuous corporate social responsibility programs, promotion of AFFI’s brands and public education about entrepreneurship and franchising.

So you want to get into franchising? AFFI may just be your best bet. The group is just a click away at [email protected].