Trade department, PFA join hands to fight unscrupulous franchisers
The Department of Trade and Industry (DTI) is poised to issue an administrative order that it hopes will stop the spread of unscrupulous franchisers.
In the draft Department Administrative Order (DAO), a copy of which was obtained by the BusinessMirror, the DTI wants franchisers to become members of recognized organizations first before they are allowed to offer their businesses to prospective franchisees.
Legitimate or recognized franchising associations or organizations will then be empowered by the DAO to police their own ranks to protect their name and reputation.
The DAO empowers these associations to set up grievance mechanisms to address complaints or settle disputes among its members.
In its administrative order, the DTI noted “numerous complaints from people, particularly overseas Filipino workers, who invested their hard-earned money in such business opportunities offered or presented to them by a franchisor upon the false assumption of a significant return of their investments.” The DTI move was endorsed by the Philippine Franchising Association (PFA).
Elizabeth Pardo-Orbeta, PFA president, said her organization stood as “an active partner” of the DTI in the campaign against “pseudo-franchises.” She acknowledged, however, that catching unscrupulous franchisers would be difficult and recommended that cases be filed against suspects. She also warned against too much government intervention.
“Like any business, the less the government intervenes, the better it is. It’s just that we need to police our own ranks, and the only way we can police our own ranks is if we force people to be a member of the association,” she said.
The DTI Bureau of Trade Regulation and Consumer Protection has already circulated the draft order to industry organizations and other stakeholders for comment. BusinessMirror
