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Warning Against Rising Fly-by-Night Franchising Concepts

The Philippine Franchising Association (PFA), the country’s premier franchise association, has raised an alarm over the proliferation of fly-by-night and pseudo franchising concepts victimizing would-be entrepreneurs with their hard-earned money and putting a sour note in this growing industry.

PFA president Robert Trota, who is also president of Max’s Restaurant, said in a speech at yesterday’s opening of the Philippine International Franchise Conference & Expo 2007, that while franchising has been acknowledged as one of the engines of growth of the domestic economy it is also beset with the problem of irresponsible individuals victimizing start-up entrepreneurs.

“While we agree that franchising has brought success to many entrepreneurs, we would like to pay special attention at this point to the sour note brought about by unscrupulous individuals who have deliberately taken advantage of the high level of awareness created by franchising,” Trota told the conference participants.

“I am referring to the fly-by-night and pseudo concepts which present themselves as franchisors, victimizing many would-be entrepreneurs whith their hard-earned money,” Trota stressed.

Trota told entrepreneurs that the selection of partners in franchising is not an easy task because it goes a rigid selection process that require due diligence on both sides.

At PFA, Trota said, its members are covered by a Code of Ethics, more popularly known as the Fair Franchising Standards (FFS).

“The FFS requires our members to observe a uniform set of rules in their negotiation with their would be franchisees,” he said. It is aimed at protecting franchisees by providing them with informed decision before acquiring any franchise.

Trota said that FFS is just one of the programs undertaken by the PFA in promoting franchising in the country.

The franchising leader stressed the importance of policing its own ranks because of the challenge of sustaining the growth achieved thus far by the industry.

“We have to continuously implement programs that aim to make our members competitive as they face the many challenges that lie ahead locally and internationally, and eventually, bring franchising to the next level,” Trota said.

author: Bernie Cahiles-Magkilat, www.mb.com.ph

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