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A Franchise Agreement is a binding contract where a business owner (franchisor) grants another party (franchisee) the right to use their brand name, business system, and proprietary knowledge to operate a similar business. In the Philippines, these agreements must comply with the Intellectual Property Code and Department of Trade and Industry regulations.

The agreement spells out crucial details like royalty fees, territory rights, training requirements, and quality standards. It protects both parties by clearly defining their roles and responsibilities, while ensuring the franchisee follows the established business format that made the original brand successful. Local franchisors must register with the Philippine Franchise Association and secure proper documentation before entering these agreements.

Use a Franchise Agreement when expanding your successful business model through partnerships in the Philippines. This legal framework becomes essential once you're ready to let others operate under your brand name, especially in retail, food service, or service-based industries where consistent quality matters across multiple locations.

The timing is right when you have proven systems, documented procedures, and protected intellectual property ready to share. Philippine law requires proper registration with the DTI and PFA before franchising, so start the agreement process early—ideally 3-6 months before your target expansion date. This gives enough time for regulatory compliance, franchisee screening, and thorough documentation of operational standards.

• Franchisor Franchisee Agreement: The standard master agreement outlining basic rights, obligations, and operational terms between both parties
• Area Development Agreement Franchise: Grants rights to develop multiple franchise units within a specific geographic territory
• Franchise Purchase Agreement: Focuses on the initial business acquisition terms and purchase price structure
• Franchise Transfer Agreement: Used when an existing franchisee sells or transfers their franchise to a new owner
• Individual Franchise Agreement: Tailored for single-unit franchises with specific location-based terms

• Franchisors: Business owners who license their brand, systems, and intellectual property to others, typically established companies with proven business models in the Philippines
• Franchisees: Entrepreneurs or businesses who invest in operating under the franchisor's brand and system, following strict operational guidelines
• Corporate Lawyers: Draft and review agreements to ensure compliance with Philippine franchise laws and DTI regulations
• Franchise Consultants: Guide both parties through the franchise process and help structure agreements
• DTI Officials: Review and register franchise agreements, ensuring compliance with local business regulations
• Philippine Franchise Association: Provides oversight and accreditation for franchise operations

• Business Details: Gather complete information about your brand, business system, and intellectual property rights
• Compliance Check: Secure DTI registration and Philippine Franchise Association membership first
• Financial Terms: Calculate franchise fees, royalties, and payment schedules based on market research
• Territory Rights: Define exact geographic boundaries and exclusivity terms for each franchise location
• Operating Standards: Document detailed procedures, quality requirements, and training protocols
• Legal Requirements: Use our platform to generate a compliant agreement that includes all mandatory Philippine franchise provisions
• Review Process: Have all parties carefully review terms before finalizing the agreement

• Party Information: Complete legal names, addresses, and business registration details of franchisor and franchisee
• Grant of Rights: Specific intellectual property and operational rights being licensed
• Territory Definition: Clear geographical boundaries and exclusivity terms
• Financial Terms: Initial fees, royalties, payment schedules, and reporting requirements
• Quality Standards: Detailed operational procedures and compliance requirements
• Term and Renewal: Duration of agreement and conditions for extension
• Termination Clauses: Grounds for ending the agreement and post-termination obligations
• Dispute Resolution: Philippine law jurisdiction and arbitration provisions

A Franchise Agreement differs significantly from a Business Acquisition Agreement in both scope and purpose. While both involve business relationships, their fundamental structures and outcomes are quite different under Philippine law.

• Ownership Structure: Franchise Agreements maintain the franchisor's ownership while licensing rights to operate; Business Acquisition Agreements transfer complete ownership and control
• Ongoing Relationship: Franchising creates a continuous partnership with regular oversight and support; acquisitions typically end the relationship after the sale
• Fee Structure: Franchises involve initial fees plus ongoing royalties; acquisitions usually have a one-time purchase price
• Operational Control: Franchisors maintain strict control over operations and branding; acquired businesses operate independently after purchase
• Legal Requirements: Franchises need DTI registration and PFA membership; business acquisitions focus on asset transfer and corporate documentation