PHILIPPINES Law and Practice Contributed by: Patricia A O Bunye, Anica Angela G Gomez, Angel Rae N Balbin and Bianca Marie J Angela M Rañola, Cruz Marcelo & Tenefrancia
2.2 Consequences of a Failure to Disclose Since there is no legal obligation to provide Disclo - sure Information, the law does not expressly provide for remedies resulting from the franchisor’s failure to disclose. Nevertheless, if the consent of the fran - chisee in entering the franchise agreement is vitiated by mistake, violence, intimidation, undue influence or fraud, the franchisee may have the franchise con - tract annulled (Article 1390, Civil Code) even if there is a disclaimer in the franchise agreement. However, if the franchisee has been made aware of facts and circumstances that require the conduct of further due diligence, it may be construed as implied acquies - cence or consent. The Competition Act also grants the parties to fran - chising agreements the right to unilaterally terminate the agreement. Additionally, the franchisee may also seek recovery of damages in case there is fraud on the part of the franchisor in carrying out its obliga - tions under the franchise agreement (Article 1170, Civil Code). 2.3 Franchise Disclosure Exemptions There is no franchise disclosure obligation in the Phil - ippines. Thus, the franchisor is essentially exempted from any request for disclosure from the franchisee. 2.4 Franchise Disclosure Language/ Translation Requirements There is no legal requirement in the Philippines for the Disclosure Information to be written in the local lan - guage, but in practice, most commercial documents are in English. However, the document should be writ - ten or translated into English if it is to be submitted as evidence before the local courts (Rule 132, Section 33, Revised Rules of Evidence).
• business address, email address, internet home page/website, fax numbers and other contact details; • copy of DTI or Philippine Securities and Exchange Commission (SEC) registration numbers; • parent companies and affiliates, if any, and their respective roles in the franchise – and the fran - chisor’s declaration if an affiliate is a supplier, including what they will supply; • names of the board of directors and officers, with a brief description of their qualifications and back - ground, ownership of interests and references; • contact number and business location of existing franchisees; • executed promotional/marketing materials; • description of the business concept, which includes the brand image, brand personality, unique selling proposition, target market, mission and vision, among other things; • basic information on training, commercial and/or technical assistance; • certificate showing that the franchisor is a member in good standing of any franchisor association and that the franchisor has no pending administrative, civil or criminal case; • declaration of the initial fee – the amount that will be collected and the services covered by the fee; • training that will be provided – the number of persons, length of the training period and training modules; • number of years that the company has operated, and the number of years it has franchised, with the corresponding numbers of company-owned branches and franchised branches; • draft franchise agreement; • full disclosure of the financial requirements of the franchise business; • a provision that requires the franchise applicant to seek adequate legal and financial counsel before It is important to note that this issuance serves only as a recommendation and does not create any legal obligation for the franchisor to provide such Disclo - sure Information. Moreover, it does not specify any required method or format for disclosing the informa - tion to the interested franchisee. signing the franchise agreement; and • mechanisms for dispute resolution.
3. Franchise Registration 3.1 Mandatory Registration
There is no standalone law governing franchise reg - istration in the Philippines. Nevertheless, franchisors and franchisees that are juridical entities must be duly registered in their country of origin to have the legal capacity to enter into franchise agreements. In the Philippines, domestic corporations must be regis -
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