"Franchising in the
Philippines has made good progress. It has helped
improve productivity of small and medium
enterprises through the use of standards, modern
technology and better management systems",
President Macapagal-Arroyo stated in her speech
delivered on the occasion of the 15th
International Franchise Conference held in Manila
this summer.
Franchising is seen as
a potent tool both to overcome traditional
barriers to business and to boost the
country's economy. Most APEC countries now
recognize franchising as a major means to develop
small and medium enterprises (SMES). 99% of all
businesses in the Philippines
are SMES. SMES create about 70% of the jobs in the
country and make up 32% of the GDP of the
Philippines.
In the
Philippines,
there are no specific statutory provisions
regulating franchising. However, as franchise
agreements contain provisions with respect to
licensing of trade marks, licensing of computer
software and the transfer of know-how, the
Intellectual Property Code of the
Philippines
applies. This provides inter alia
that:
-
franchise
agreements must be registered with the
government; and
-
they
must not contain any prohibited clauses, e.g. an
obligation of the franchisee to acquire capital
goods, intermediate products, raw materials, and
other technologies from a specific
source.
The
parties to a franchise agreement must ensure that
the contract complies with the relevant provisions
of the Intellectual Property Code; otherwise the
contract will not be
enforceable.
For more information
please contact Babette
Märzheuser-Wood or Vicky
Reinhardt.