The Department of Trade and Sector (DTI) on Wednesday welcomed President Duterte’s issuance of Govt Get (EO) 169, which seeks to defend micro, smaller and medium enterprises (MSME) and the franchising sector.
Trade Secretary Ramon M. Lopez explained EO No. 169 titled “Strengthening the Franchising Sector for the Safety of Micro, Small and Medium Enterprises” underscores the want “to guard these MSME traders from opportunists and ripoffs that choose advantage of small business people.”
Signed on May perhaps 12, 2022, the also EO aims to fortify the franchising sector to help organizations, specially MSMEs, by producing a transparent and business enterprise-helpful environment, and promoting reasonable and equitable tactics.
As the company mandated to establish and put into practice guidelines on regulation of trade, market and investments, the DTI specified the conditions and ailments for franchise agreements.
Among these are: title and description of the items or products and services beneath the franchise specific legal rights granted to the MSME franchisee these kinds of as but not limited to the proper to use the mark or any other intellectual house legal rights duly registered with the Intellectual House Place of work of the Philippines.
Further more, the entire disclosure of any pre-signing, initial or recurring fees, this sort of as but not constrained to, franchising charge, promotion payment, royalty rate or any related kind of fee, which may possibly be imposed on the MSME franchisee.
In addition, the thorough duties of the franchisor, which involve the enumeration of the sorts and particulars of assistance and the submission of the franchise agreement to the DTI and the specific obligations of the MSME franchisee and the non-discriminatory provisions.
On major of these, other policies less than the explained regulation are: period of the franchise, and the phrases and situations for renewal effects of and grounds for pre-termination, termination or expiration of the franchise arrangement.
There is also a provision on “cooling off” interval, wherein the MSME is given the selection to terminate the settlement.
Yet another provision is on the system for dispute resolution, which shall include things like a stipulation that get-togethers could seek out voluntary mediation underneath Republic Act No. 9285, or the Alternative Dispute Resolution Act of 2004 and therapies of the functions in situation of any violation of the conditions and ailments of the franchise arrangement.
The trade department clarified that franchisors may refer to the above-stated minimum amount phrases and disorders as best methods that can be integrated into their respective franchise agreements for non-MSMEs franchisees.
Also, the DTI is in charge of building an MSME Registry of Franchise Agreements. According to the EO, the trade division will put together the employing guidelines and polices for the execution of the said get within just 90 days.
“As we implement buyer defense, we also identify the need to have to improve the advertising of good and transparent franchise methods for the advantage and development of our MSMEs,” the DTI main mentioned.
Meanwhile, DTI Consumer Defense Group Undersecretary Ruth B. Castelo, for her element, specified, “strong franchisees and ethical franchisors will support advertise customer self esteem.”