President Duterte has approved the registration of franchise agreements and the creation of a Franchise Registry for micro, small and medium enterprises (MSMEs) as well as the use of digital payment methods to release funds and collect dues in government.
Malacañang yesterday released copies of Executive Orders 169 and 170 that were both signed by the President last May 12, and that strengthen the franchising industry for the protection of MSMEs and allows the adoption of digital payment for government disbursement and collections, respectively.
Under EO 169, franchise agreements of MSMEs and their franchisors shall be registered with the Department of Trade and Industry (DTI) which shall create a Franchise Registry.
The registration shall be within 30 days from the execution of agreement.
The franchise agreements shall be in writing, duly notarized and include the following minimum terms and conditions: name and description of the products or services under the franchise; and the specific rights granted to the MSME franchisee such as, but not limited to, the right to use the mark or any other intellectual property rights duly registered with the Intellectual Property Office of the Philippines.
The agreement should also include the full disclosure of any pre-signing, initial or recurring fees such as, but not limited to, franchise fee, promotion fee, royalty fee or any related type of fee which may be imposed on the MSME franchisee; and the detailed responsibilities of the franchisor which include the enumeration of the types and particulars of assistance and the submission of the franchise agreement to the DTI.
EO 170 requires all government departments, agencies and instrumentalities, including state universities and colleges, government-owned or -controlled corporations and local government units, to adopt digital payments for their respective disbursements and collections.
The EO said the use of digital payments is in line with the government’s development of an inclusive digital finance ecosystem and in accordance with the Digital Payments Transformation Roadmap 2020-2023 and the National Strategy for Financial Inclusion 2022-2028.
It will also make financial services accessible to vulnerable and underserved sectors, expedite the distribution of financial assistance, and provide clear audit policies and guidance on the use of digital collections and payments.
According to the EO, agencies may use facilities of government servicing banks like advice to debit accounts or interoperable electronic fund transfers (EFT) to collect fees for these EFT services.
