Senator Christopher “Bong” Go lauded President Rodrigo Duterte for signing Executive Order No. 169, which seeks to strengthen micro, small and medium enterprises in the franchising industry.

Go highlighted the contributions of MSMEs to the country, noting that they serve as a major engine for the economic recovery amid the pandemic.

“Backbone ng ating ekonomiya ang mga MSMEs. Masisipag at madiskarte sa buhay ang mga Pilipino. Kung mabibigyan lang sila ng tamang tulong at polisiya gaya ng EO na ito, hindi malayo na mas lalago pa ang mga negosyo nila,” said Go.

According to Philippine Statistics Authority data, MSMEs account for 99.5% of all business enterprises in the Philippines, with 68% engaged in franchising.

Signed on Thursday, May 12, EO 169 prescribes minimum terms and conditions of franchise agreements as there is “a need to intensify government efforts to strengthen the franchising industry to help businesses, especially MSMEs, by developing a transparent and business-friendly environment, and promoting fair and equitable practices.”

Under the new directive, all franchise agreements must include the following terms and conditions:

– name and description of the products or services under the franchise;
– specific rights granted to the MSME franchisee;
– full disclosure of any pre-signing, initial or recurring fees;
– detailed responsibilities of the franchisor and the franchisee;
– non-discrimination provisions;
– duration of the franchise and terms and conditions for renewal
– effects of and grounds for pre-termination, termination and expiration of the franchise agreement;
– provision on “cooling off” period where the MSME is given the option to terminate the agreement;
– mechanism for dispute resolution; and
– remedies of the parties in case of any violation of the terms and conditions of the franchise agreement.

The EO further provides that the franchisor may be eligible for incentives or benefits from the national government if the minimum terms and conditions are included in the franchise agreement.

It also directs the Department of Trade and Industry to “formulate and enact measures for the entitlement to incentives of qualified franchisors, subject to existing laws, policies and regulations.”

Meanwhile, franchisors with existing franchise agreements with MSMEs will be required to comply with the new requirements when their agreements with franchisees are renewed.

Franchisors are also mandated to register their franchise agreements to an MSME Registry of Franchise Agreements which will be established by the DTI.

To further support MSMEs, government-owned Land Bank of the Philippines had earlier announced the implementation of a PhP50 billion loan program for businesses affected by natural disasters and other man-made crises such as wars, military conflicts and other disputes.

Go has been advocating for sustained government support for MSMEs, particularly at the height of the pandemic. The senator was successful in pushing the government to implement the Small Business Wage Subsidy program which gave two tranches of cash assistance to eligible workers belonging to the low- to medium-middle class who were unable to work or be paid during the enhanced community quarantine period.

He also successfully appealed for getting economic frontliners included in the priority groups of the national COVID-19 vaccination program. His office was likewise involved in offering aid and support to micro-entrepreneurs across the country through various relief operations during the pandemic.

Go then encouraged the government to work toward a more inclusive economic recovery by ensuring that MSMEs have the resources and assistance they require to recover.

He reiterated that MSMEs play a crucial role in job creation in the country, which is critical in ensuring employment for Filipinos who are struggling to feed their families.

“Malaking parte ng bumubuhay sa ating ekonomiya ay ang mga MSMEs at ang kanilang mga workers. Tulungan natin silang buhayin ang kanilang negosyo at maiahon ang kanilang mga empleyado habang nasa panahon ng krisis ang buong bansa,” Go said.