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.

Before franchising

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)

Barangay clearance

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.

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