3. • What if Franchising?
• Anglo-French means FRANC means FREEDOM or FREE
– A franchise is the agreement or license between two legally
independent parties which gives:
• a person or group of people (franchisee) the right to market a
product or service using the trademark or trade name of
another business (franchisor)
• the franchisee the right to market a product or service using
the operating methods of the franchisor
• the franchisee the obligation to pay the franchisor fees for these
rights
• the franchisor the obligation to provide rights and support to
franchisees
Source:
http://www.franchise.org//franchiseesecondary.aspx?id=52625
4. Franchising continued...
• Franchisor
– Owns trademark/trade name
– Provide support (advertising, initial set up,
training, personnel, inventory, logistics, and
marketing)
• Franchisee
– Uses the trademark or trade name
– Expands the business with franchisor support
– Pays fees
5. Franchising continued...
A little history
• Middle Ages, landlords would rent their lands for
business. This businesses would follow rules and
regulations.
• Isaac M. Singer 1850s, started the franchising
revolution my licensing his technology to
manufacturers and retailers as a way to expand
his business without exerting too much effort.
• Post WWII and Baby Boom, products and
services were in high demand and franchising
increased the speed of product/services
availability.
6. Franchising continued...
A little history
• Ray Kroc 1902-1984, 1950s this milk shake mixer salesman
discovered McDonald Brother small burger stand. He
recognized the potential of the brothers fast food system
with consistent results. Kroc is McDonald’s licensing agents
and accepted franchisees. He became the Senior
Chairman of McDonald’s after buying it in 1961. He started
the modern franchising.
• International Franchise Association , founded in 1960 as a
membership organization of franchisees. Established code
of ethics and works closely with Federal Trade Commission
and US Congress
http://www.franchoice.com/franchise-information-
guide/what-is-franchise/history-of-franchising
7.
8. Types of Franchises
• Product Distribution
– Simply distributes products
– Supplier-dealer relationship
– Coca Cola, Pepsi, Ford Motor, The Big 3
• Business Format Franchise
– Complete method of conducting business
– Fast food, services, restaurants, retail, lodgin
– maintenance
9. Types of Franchise Arrangements
• Single Unit
– One unit franchise only, may add or purchase another
unit after the first franchise is fully operational
• Multi Unit Franchise
– Area Development Franchise
Can open multiple franchise in a given area on a
specified time with exclusive right to develop his
area.
– Master Franchise
Has right to sell franchise within territory (sub
franchise)
12. Export and Import
• Export means shipping your goods and
services to another country.
• Import means buying goods and services from
another country and selling it locally.
• Customs is the governing or regulatory office
responsible for managing import and exports
• The oldest form of international business
environment.
13. A little history of Import/Export
• Ancient
– 19th century record shows Assyrians have merchant
colonies
– Arabs use camels and the Chinese use horses to travel
and trade in the SILK ROAD
– Egyptians sail on the Red sea to sell goods to Arabia
• Middle
– China (Guangzhou Province) becoming prominent in
international trade
– India is already trading spice to much of Asia and
some parts of southern Europe
14.
15. A little history of Import/Export
• Modern
– The Red sea becomes the new route of spice
trade replacing the Persian gulf
– Portugal sent Pero Da Covilha to scout the trade
– Portugal started travelling across oceans to trade
spices in different countries particularly in India.
– Japan introduced a system of foreign trade
– The Dutch, Spaniards, and the British traders
started their venture as far as the Americas
– Free Trade Agreement between France and
Britain
16. A little history of Import/Export
• Post war
– Bretton Woods System promotes free trade
– In 1942 General Agreement on Tariffs and Trade was
formed to promote trade among nations
– ISO standardized containerization
– In Oct 16, 1973 OPEC was created
– January 1, 1995 WTO was formed to facilitate free
trade between signatories
– January 1, 2002 EU and EURO Zone was established
Source:
http://en.wikipedia.org/wiki/Timeline_of_internationa
l_trade
18. WTO Import Licensing
• Agreement requiring members to keep the
procedures simple, transparent, and
predictable so as not to become an obstacle
for trade.
• Example is publication of import licensing
procedures and informing the WTO when new
procedures are introduced.
19. WTO Import Licensing
• The agreement also covers rules for the
valuation of goods at customs. It aims to make
the valuation of goods fair to every
participating nations and traders.
• There is also a Pre-shipment Inspection. This
agreement aims to protect financial interests
of developing countries (commercial fraud,
capital flight, customs duty evasion, etc.).
20. WTO Import Licensing
• It also covers the Rules of Origin (Made
in____). The agreement requires that a
member’s rule of origin is transparent, that
they do not have restricting, distorting or
disruptive effects on international trade; that
they are administered in a consistent,
uniform, impartial and reasonable manner;
and that they are based on a positive
standard.
21. WTO Import Licensing
• Investment Measures: Reducing trade distortions.
Under the agreement, countries must inform
fellow-members through the WTO of all
investment measures that do not conform with
the agreement. Developed countries had to
eliminate these in two years (by the end of 1996);
developing countries had five years (to the end of
1999); and least-developed countries seven. In
July 2001, the Goods Council agreed to extend
this transition period for a number of requesting
developing countries.
24. Types of Importers and Imports
• Types of Imports
– Industrial and Consumer Goods
– Intermediate Goods and Services
• Types of Importers
– Looking for new products to sell in the domestic
market
– Looking for foreign sourcing to get their products at
the cheapest price
– Using foreign sources as part of their supply chain
• Direct Importers involves a big retailer and a
supplier from abroad
Source: http://en.wikipedia.org/wiki/Import
26. Importing Process in PHL
• 1. What are the import documents required in all shipments to the
Philippines?
• Commercial Invoice
• Bill of Lading or Airway Bill for air shipments
• Certificate of Origin, if requested
• Packing List
• Applicable special certificates required due to the nature of goods being
shipped/requested by importer/bank/letter of credit clause, such as the
Bureau of Food and Drugs (BFAD) license
• Commercial Invoice of Returned Philippine Goods and Supplemental
Declaration on Valuation
• For Letter of Credit (L/C) Transaction, a duly accomplished Letter of Credit
(L/C) including Proforma Invoice and Import Entry Declaration for Advance
Customs Import Duty (ACID)
• For non-L/C Transactions, either Draft Documents against Acceptance
(D/A), Documents Against Payment (D/P), Open Account (OA) or self-
funded, a Proforma Invoice
Source: http://www.dti.gov.ph/dti/index.php?p=196
27. Importing Process in PHL
• What are the legal fees to be collected from importers?
• Annual registration fee of P1,500 and processing fee of P500 for subsequent updates
of the registration
• 3. Who are authorized to make an import entry?
• Importer- being the holder of the Bill of Lading (B/L) or Airway Bill (AWB)
• Customs Broker- acting under the authority from the holder of the B/L or AWB
• A person duly empowered to act as agent or attorney-in-fact for such holder
• 4. What are the requirements upon filing of import entry?
• Import Entry and Internal Revenue Declaration (IEIRD-BOC Form No. 236)
• Supplemental Declaration on Value (SDV)
• B/L or AWB
• Commercial Invoice
• Packing List
• Other additional documents as may be required, such as:
a. ATRIG (VAT- exempt goods)
b. Certificate of Origin (CO)
c. Import Permit for regulated items
d. Health Certificate
Source: http://www.dti.gov.ph/dti/index.php?p=196
30. Ways to Export
• Direct Selling
• Direct Selling Through Distributorship
• Direct Selling through foreign retailers and end
users
• Over the internet
• Indirect selling
Source: http://en.wikipedia.org/wiki/Export
31. Export to the World
• Attend seminars/training courses about
exporting. The Philippine Trade Training
Center (PTTC) offer courses on the basics of
exporting, letters of credit, negotiating with
the foreign buyers, and other similar courses.
• Register your business with DTI, SEC, and
other concerned government agencies
• To be successful your Organization and
Products must be READY.
32. Export to the World
• Export Procedures
• Upon receipt of a purchase order from a foreign buyer, immediately send him a
proforma invoice for confirmation. An order is confirmed when the proforma invoice is
signed and returned to you by the buyer.
• Payment for exports is normally made through the banks. The foreign buyer’s interest
in the Philippines is represented by a local authorized agent bank, which is designated
by the foreign buyer’s bank. The local Authorized Agent Bank (AAB) will assist you in
negotiating the collection of the payment for your exports.
• The AAB will explain to you all the instructions concerning your shipment to ensure its
acceptability for payment. Make sure that you understand all the instructions provided
by the bank. If the instructions are written in a non-English language, ask the bank to
give you an official translation in English or to officially recognize a translation of the
instructions, if the translation was made by someone other than the bank.
• Exporters may be paid through banks by means letters of credit (L/C), documents
against payment (D/P), documents against acceptance (D/A), open account (O/A), cash
against documents (CAD), prepayment/export advance, inter-company open account,
offset arrangement, consignment, or telegraphic transfer.
• You may or may not need outside financing to produce export products ordered by the
buyer. Should you, however, find the need for outside financing. You can either tap the
assistance of government or non-government financial institutions.
• Verbatim: http://www.dti.gov.ph/dti/index.php?p=223
33. Export to the World
• Export Documentation
• When you are ready to ship, fill up an Export Declaration
(ED) form. Sample ED forms are available at BETP, DTI
Provincial offices, BOC Processing Units, OSEDCs and
PHILEXPORT offices.
• Secure an export commodity clearance/export permit
from the proper government commodity office, if your
product is included in the list of regulated products for
exportation or if the buyer requires.
• With the required supporting documents, submit the
accomplished ED form to the BOC Processing Unit for the
approval of the Authority to Load (AL).
• Verbatim: http://www.dti.gov.ph/dti/index.php?p=223
34. Export to the World
Loading in Manila
Cargo to be transported by air are inspected by the Bureau of
Cusotms (BoC) at the Ninoy Aquino International Airport
(NAIA). Conventional cargo, whether containerized or non-
containerized, to be transported by ship are inspected by the
Customs Container Control Division and the Piers and
Inspection division, respectively, after payment of the
wharfage fee and arrastre charges. Wharfage fee and arrastre
services may be paid at South Harbor or MICP.
However, for Board of Investments (BOI) and Philippine
Economic Zone Authority (PEZA)-registered companies,
stamping or exemption from payment of wharfage fee may be
done at the PPA Unit of OSEDC-Manila at Roxas Boulevard.
Loading can either be at the North or South Harbor.
35. Export to the World
Loading in Manila
Cargo to be transported by air are inspected by the Bureau of
Cusotms (BoC) at the Ninoy Aquino International Airport
(NAIA). Conventional cargo, whether containerized or non-
containerized, to be transported by ship are inspected by the
Customs Container Control Division and the Piers and
Inspection division, respectively, after payment of the
wharfage fee and arrastre charges. Wharfage fee and arrastre
services may be paid at South Harbor or MICP.
However, for Board of Investments (BOI) and Philippine
Economic Zone Authority (PEZA)-registered companies,
stamping or exemption from payment of wharfage fee may be
done at the PPA Unit of OSEDC-Manila at Roxas Boulevard.
Loading can either be at the North or South Harbor.
Verbatim: http://www.dti.gov.ph/dti/index.php?p=223
36. Export to the World
• Loading at Provincial Ports
Documentation (steps 1-3) may be done in Manila. After approval of the Authority to Load,
the BoC sends message to BoC staff at the Port of Loading.
You can also process documents and secure Authority to Load from the local OSEDC (now in
Clark, Davao, Baguio, General Santos, Iloilo, Cebu, Cagayan de Oro, and Subic Bay Special
Economic Freeport Zone).
After loading, the BoC issues the following documents upon request:
• Certificate of Origin, Form A for export products covered by the Generalized System of
Preferences (GSP); you can inquire about the GSP from DTI-Bureau of International Trade
Relations (BITR) or BoC.
• General Certificate of Origin for export products not availing of preferences under GSP
• Certificate of Origin, Form D for export products covered by the Association of Southeast
Asian Nations (ASEAN) Common Effective Preferential Tariff Scheme
• Certificate of Shipment
• Furnish the AAB, for record purposes, a copy of the duly accomplished ED form together
with other shipping documents, if export negotiation or payment is coursed through them.
For prepaid shipments, send the original commercial and shipping documents to the buyer.
Verbatim: http://www.dti.gov.ph/dti/index.php?p=223
37. Export to the World
• Loading at Provincial Ports
Documentation (steps 1-3) may be done in Manila. After approval of the Authority to Load,
the BoC sends message to BoC staff at the Port of Loading.
You can also process documents and secure Authority to Load from the local OSEDC (now in
Clark, Davao, Baguio, General Santos, Iloilo, Cebu, Cagayan de Oro, and Subic Bay Special
Economic Freeport Zone).
After loading, the BoC issues the following documents upon request:
• Certificate of Origin, Form A for export products covered by the Generalized System of
Preferences (GSP); you can inquire about the GSP from DTI-Bureau of International Trade
Relations (BITR) or BoC.
• General Certificate of Origin for export products not availing of preferences under GSP
• Certificate of Origin, Form D for export products covered by the Association of Southeast
Asian Nations (ASEAN) Common Effective Preferential Tariff Scheme
• Certificate of Shipment
• Furnish the AAB, for record purposes, a copy of the duly accomplished ED form together
with other shipping documents, if export negotiation or payment is coursed through them.
For prepaid shipments, send the original commercial and shipping documents to the buyer.
Verbatim: http://www.dti.gov.ph/dti/index.php?p=223
40. Philippine International Trade Groups
• Bureau of Export Trade Promotion
– Promotion arm of DTI
– Frontline assistance, consultancy and information for
the public and exporters
It is composed of three functional groups:
1. Trade Information and Assistance Group (TIAG)
2. Market Strategy and Consultancy Group
(MSCG)
3. Product Research and Strategy Group (PRSG)
41. Philippine International Trade Groups
• Center for International Trade Expositions
and Missions (CITEM)
– Promotes the Philippines as a source of reliable
products through trade fairs, in-store promotions,
exhibits, trade missions, and other promotional
activities here and abroad.
42. Philippine International Trade Groups
• Design Center of the Philippines (DCP)
– Mandated to promote industrial design as a tool
for quality improvement and competitiveness of
Philippines products.
– Services the design needs of SMEs
– Services offered: Product design, package design,
product technology demonstration, design and
technical information, library
43. Philippine International Trade Groups
• Philippine Trade Training Center (PTTC)
– Develop training modules on export and import
techniques and procedures. Raise the level of
awareness of Philippine businessmen on export
opportunities and the availability of alternative
sources of import products or diversified markets
for export. Offer specialized courses for specific
industry groups directed at overcoming barriers
to overseas market penetration. Conduct training
programs in international trade practices,
inspection techniques, and exhibition mounting.
44. Philippine International Trade Groups
• Philippine International Trading Corporation
(PITC)
– Aimed to trade with centrally planned economies
– Was designated as key implementing agency by
FPGMA for her 10 Point legacy programs which is
aimed at reducing the cost of medicines by 50%
– PITC Pharma,, Inc. was formed to focus on
delivering the legacy through distribution
channels like Botika ng Bayan
45. Philippine International Trade Groups
• Foreign Trade Service Corps (FTSC)
– Head the operations of Philippine Trade and
Investment Centers abroad
– Promote the Philippines as an investment destination
– Introduce Philippine products and services to foreign
markets
– Gather economic/commercial intelligence and share
to concerned agencies
– Assist in Philippine multilateral, regional, and
bilateral trade negotiations
47. • The buy and sell of goods or use of services over or
with the use of the internet or electronic device
– Ebay, Zalora, KimStore, Amazon.com, BPIExpressonline
• Boom of ecommerce started in the mid 90s and
the increase in popularity has risen so much in the
early 2000s. Today it is very common thing to do-
Online Shopping.
• Available 24 hours and usually with next day
delivery option for shipping. It has also 24/7
customer service and follows almost the trade
regulations, laws, and policies like the Return-
Exchange policy.
48. E-Commerce continued...
• Not as heavily regulated compared to the
usual import/export method of doing business
• Offers variety of products and services with
really competitive pricing. Operation is not
that expensive
• Logistics is playing a big role
• Online security is a very big concern and still
no laws in most countries like PHL that will
curve online crimes
49. E-Commerce continued...
• To improve payment process and security
Payment Card Industry Security Standards
Council (PCI) was formed. Its PHL counterpart is
the E-Commerce Law RA 8792.
• The latest trend in E-commerce are social media
marketing and selling and the fast rising mobile
e-commerce.
• There are so many online e-commerce
organizations that you can join. However
government agencies are lagging behind
(especially in the developing nations)
• Sales went up from $27 billion to $143 billion and
is expected to go up to $600 billion by 2014.
