MANILA, Philippines — The government is urged to put up an initial Franchise Fund of $1 million, approximately P50 million, and tax incentives to support programs that would support local franchise concepts and penetrate international markets while government has issued warning against bogus franchisors.

Franchising guru Samie Lim, who is also chairman of the World Franchise Council, told reporters at the sidelines of the opening of the Franchise Asia 2011.

“I would initially request for a seed money of $1 million which could be coursed through CITEM, which should work with us,” Lim said.

The Franchise Fund, Lim said, should be used to fund local franchise concepts in terms of funding the development of master franchise systems, participation in chosen international franchise shows, free space rentals, among others.

Lim said that while the Philippines is now considered as the franchising hub in the region, the government has no direct intervention to support the industry’s growth momentum.

The Philippine Franchising Association, he said, is also working with the Export Development Council to recognize franchising as an important export sector because of its huge potential for exports through the sales of local franchise concepts abroad.

Lim has projected of P50 billion investments inflow from the franchising sector in the next three years.

Earlier, DTI secretary Gregory L. Domingo in a speech read by undersecretary Zenaida C. Maglaya to the Franchise Asia 2011, the biggest franchise gathering in the region, warned bogus franchisors and urged franchises to be vigilant in light of the robust growth in this sector.

Maglaya said that Department Order 10-24 has been implemented to promote self-governance in the franchise sector preventing the spread of predatory business practices by unscrupulous entities masquerading as franchise companies.

“The Bureau Order also cautions would be franchisees to be more vigilant when getting a franchise. Our focus therefore is to expand the franchising sector while protecting investments of the industry’s key players,” Maglaya said.

The DTI also said that government has intensified the enforcement of the Magna Carta for Micro Small and Medium Enterprises where banks are required to allot part of their loan portfolio to MSMEs.

At present, the franchising sector has a significant percentarge in most of their loan programs. (BCM)