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What Should Be Included in the Franchising Agreement
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Alburo Law
April 29, 2026
AT A GLANCE
A franchising agreement is governed primarily by the Civil Code of the Philippines. While there is no comprehensive franchising law in the Philippines, Executive Order No. 169 (2022) provides minimum terms for MSME franchise agreements, while the Department of Trade and Industry (DTI) issuances offer additional guidance.
Definition of Terms under Executive Order (E.O.) No. 169 (2022)
While there is no comprehensive franchising statute, E.O. No. 169 (2022) provides for definitions and regulatory standards, particularly for franchising arrangements involving micro, small and medium enterprises (MSMEs).
The Executive Order recognizes that the franchising industry plays a crucial role in sustaining the country’s economy by creating job opportunities, boosting consumption, and promoting tourism.
What should be included in the franchising agreement?
Generally, the contents of a franchising agreement depend on the agreement of the parties pursuant to Article 1306 of the Civil Code of the Philippines which provides:
“Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.”
Thus, the parties are generally free to determine the contents of a franchising agreement, subject to these limitations.
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