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DTI to issue rules on franchising

Guidelines to prevent franchising scams
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The Department of Trade and Industry is set to issue guidelines on the booming franchise industry in the Philippines to protect the aspiring entrepreneurs and the sector itself from scams. [See five signs that a franchise is a scam here]

A report by the Philippine Star said the DTI will be creating a technical working group with franchisors to come up with rules to prevent frauds and schemes in the industry.

The move came following reports received by the Trade Department about the alleged existence of scammers, whose modus operandi will be to pose as franchisors, offering packages of a  certain brand, only to disappear once payment has been made.

“The guidelines for franchisors must be clear in order to protect consumers,” Dimagiba said in the report.

The guidelines to be issued by the DTI will be in the form of a Memorandum of Understanding with the franchise associations in the country and is expected to be signed within the year.

One of the features eyed by the DTI is putting a cap on the number of years that a business firm should be operating before offering franchise options to the public. [Read about the basis of franchise fees here] - Carlo P. Mallo


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