One Step Closer to Franchising: Paperwork and Contracts in Philippines
Applying for a franchise in the Philippines requires several documents so you can make sure your operation is all legal. Here are the important details you need to remember.
Letter of Intent (LOI) - Outlines the various terms and conditions that both the franchisor and franchisee will agree on.
Franchise Application Form - Provided by the franchisor and should be accomplished by the franchisee completely and correctly.
Proposal of Site Location - Contains a sketch, address, and other information of where a franchisee wants to set up a franchise business.
The franchisor sets the criteria of the location and the interested third party will need to search for a site that satisfies the requirements.
The criteria will include:
- Density of population
- Volume of vehicles that pass by
- Building made for and is conducive for business
- Market type around the vicinity, etc.
After the franchise is approved
There are also minor documents that a franchisee must accomplish once they’re given the go signal to start a business.
- Business Name Registration with the Department of Trade and Industry
- Copy of Lease or Written lease agreement/contract of the franchise site if you are renting
- Copy of the Land Title and Tax Declaration if the property is owned by the franchisee
- Latest bank statements
- Proof of billing under a franchisee’s name
- Taxpayer’s Identification Number (TIN)
A barangay clearance from where the business will be started is also required, especially because it is a prerequisite to obtaining a Business or Mayor’s Permit.
To apply for one, a Business Name Registration and the Copy of Lease/Copy of Land Title and Tax Declaration are required.
Business or mayor’s permit
Every company that legally operates in the Philippines must obtain a license from the LGU (Local Government Unit) before it can start operating.
- Basic requirements for a Mayor’s Permit
- Barangay Clearance
- Certificate of Business Name
- Tax Declaration/Land Title or Lease of Contract
- CEDULA or Community Tax Certificate
- SSS Certification
With these documents on hand, a franchisee can then proceed to the local Business Permit and Licensing Section and work from there to obtain a license.