Franchising association lauds cleansing of franchise sector

MANILA, Philippines - The Filipino International Franchise Association (FIFA) lauded the Department of Trade and Industry’s (DTI) implementation of the Bureau Order 10-24, as it is expected to weed out the scams in the franchise industry in the Philippines. 

FIFA president Rudolf Kotik said that the advisory on due diligence to be undertaken by prospective Franchisees, which is now one of the primary requirements of DTI will further protect investors from being victims of fraudulent Franchisors and Franchisees.

“We were looking for to that Bureau Order to week out the scams in the Franchise industry,” said Kotik in a statement furnished to The Freeman yesterday.

Kotik, who is the founder of FIFA, said that the organization will support DTI regulation, so as to promote growth in the franchise industry, minimize the number of pitfalls.

“Franchise Companies need documentation of the Operation, Franchise agreement and side agreements, Franchise Marketing Materials, the Franchise Disclosure Instrument, and a Trade Mark from the Intellectual Property Office among other requirements and have to be member of a Franchise Association” Kotik added.

“Filipino International Franchise Association was the first Franchise Association to register with the DTI based on the Bureau Orders and its Franchise Development partner RK Franchise Consultancy was the first Franchisor Developer as such registering with the DTI under the new rules.

FIFA has more than 250 Franchise Companies as members nationwide and RK Franchise Consultancy developed more than 400 Filipino Enterprises into Franchise Systems in the past 15 years.

FIFA advocates that all Filipino Franchisors shall follow the new DTI Bureau orders

Kotik is one of the active franchise consultants in the Philippines in over 30 years.

Meanwhile, Kotik are encouraging businesses that are interested to open a franchise, and investors looking for franchise business to join the 11th Cebu Franchise Expo to be held this coming March 11 to 13 at the SM Cebu trade hall.

While the franchise system has become the most popular scheme for businesses to grow faster, and for entrepreneurs to have an instant business, it has its own pitfalls that both parties should be careful about.

Kotik reiterated his warning that entrepreneurs who may want to enter in franchise business, must examine carefully the franchisors and its system, as it may not offer sound franchise system that will lead to unachieved return on investments (ROI).

Serious franchisors or those who offered their businesses for franchise must invest very well in the system, like getting professional franchise consultants, rather than formulating their own packages.

Among other problems that have been happening now in the midst of franchise business popularity, is the unguarded “transfer of technology” that left some franchisors off-hand, and other people have already copied their business model.

Transfer of technology is very crucial in offering franchise, Kotik said stressing that serious businesses must get a professional franchise consultant to take care of these pitfalls. — (FREEMAN)