THE Philippine Franchise Association (PFA) said that tax incentives and regulation become more complex the more its companies grow, putting them at a disadvantage to foreign competitors.
“Comparatively, foreign brands are more aggressive because they have backing. First and foremost, they have tax incentives; they have tax holidays when they are scaling up,” according to Sherill R. Quintana, chair of the council of past presidents of PFA, on the sidelines of Franchise Asia Philippines 2024.
“In the Philippines, it’s the other way around. When we’re scaling up, the more you’re taxed, the more you’re regulated … The support is at the startup level, where, in fact, when you graduate from that level, you need more support to be able to sustain your operations,” she added.
She said that the government should help make it easier for franchisors who are looking to go overseas to comply with the various international regulations.
“Why can’t we have our Food and Drug Administration (FDA) here to help our local brands who want to go to Australia, the US, or New Zealand, which have stricter guidelines, prepare them by making sure that they are compliant with their requirements?” she added.
She said because of the stricter rules in some foreign markets, some companies have to hire consultants to help with compliance.
Meanwhile, she said that the government should also support Philippine brands in registering their trademarks in multiple countries.
“In terms of the Madrid Protocol, for example, it’s very expensive for our member brands who want to be part of those programs,” she said.
“I think the government can help, maybe in terms of funding, to make it more accessible for the brands to apply for the Madrid Protocol,” she added.
According to the PFA, there are only 20 Filipino brands that have successfully gone international, while another 20–25 brands have expressed interest in going international.
Meanwhile, there are around 1,800 to 2,000 franchise brands and 200,000 franchise outlets operating in the Philippines. — Justine Irish D. Tabile