Low-Cost Franchise Business in the Philippines: Your Complete Guide for 2025

Franchising is a popular path for first-time entrepreneurs. Starting a business in the Philippines the traditional way, from scratch, requires a lot of capital investment. But franchising provides brand recognition, a proven business model, and direct supply sources from the outset. You’re essentially buying into a system that’s already been tested and refined, which significantly reduces the risk compared to launching something completely new.

But here’s what many aspiring franchisees don’t realise: those advertised low investment opportunities often hide costs that can significantly increase the actual price. A PHP 50,000 franchise fee might sound affordable until you factor in equipment, working capital, permits, renovation costs, and ongoing royalties. Suddenly, that initial investment has tripled or quadrupled.

This guide breaks down the real costs of starting a genuinely low-cost franchise business in the Philippines.

We’ll walk through the application process, highlight popular affordable options across different price ranges, and show you what to expect beyond the advertised franchise fee. We’ll also cover an often-overlooked expense: international payments for franchisees working with foreign brands that require imported supplies.

For those operating international franchise brands, managing cross-border payments efficiently can mean the difference between healthy profit margins and watching your earnings disappear into hidden fees and unfavourable exchange rates. That’s where understanding all your payment options - including modern alternatives like Wise Business - becomes crucial for protecting your bottom line.

Table of contents
What is a franchise? The different types of franchise businesses in the Philippines Understanding the common costs of a franchise Steps for applying for a franchise Popular low-cost food franchise examples Managing international franchise supply requirements

What is a franchise?

A franchise is a business venture where you (the franchisee) operate a business using the brand, trademark, and marketing strategies owned by a franchisor. This relationship gets formalised through a Franchise Agreement (FA), which outlines the terms, conditions, and obligations for both parties.

Think of it as buying into a proven system. Rather than starting from scratch, you’re leveraging an established brand with existing customers and operational know-how. The franchisor provides the blueprint; you provide the execution.

The different types of franchise businesses in the Philippines

Product franchising involves selling or distributing products under the franchisor’s trademarked brand. Think authorised retail stores or car dealerships - you get rights to sell specific products, but operational methods are largely up to you.

Manufacturing franchising allows you to produce goods in addition to distributing them. A classic example is Coca-Cola supplying syrup to bottlers who manufacture, bottle, and sell the finished product.

Business format franchising is the most comprehensive model and most common in the Philippines. You get the entire business system - operations manuals, training, marketing campaigns, quality control, and ongoing support. Examples include Jollibee, McDonald’s, 7-Eleven, and most restaurant and coffee shop franchises.

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Understanding the common costs of a franchise

The franchise fee is just the beginning. Here’s what you’ll actually pay:

Franchise fee (one-time): Covers your right to use the brand and business system, including training. In the Philippines, these range from PHP 50,000 (micro-franchises) to several million for major brands.¹

Royalties (ongoing): Recurring fee typically 5 - 8% of gross sales.² Some Philippine franchises like Siomai King charge no royalty fees.

Marketing fee (ongoing): Usually 2 - 5% of sales plus a fixed monthly rate for the franchisor’s advertising efforts.³

Permits and licensing fee (ongoing): All registration fees, with the DTI or SEC, Barangay Clearance, and Mayor’s Permit. Usually comes to around PHP 5,000 - 15,000.¹

Miscellaneous costs (variable): Location-based costs (leasing, construction), operational expenses (equipment, inventory), and working capital (PHP 20,000 - 50,000 on average).¹

Hidden costs: The advertised franchise fee represents only a small proportion of total startup costs. Watch for audit fees, transfer fees, required upgrades, and equipment costs that often exceed initial estimates. Franchise renewal fees are typically half of the original franchise fee - Potato Corner charges 50%,⁴ while FCG brands charge 40%.⁵

The Philippine government offers financing for franchise businesses through DTI and SB Corp programs. DTI Franchise Funding provides up to 80% of total investment (maximum PHP 20 million) at 0% interest for the first year.⁶

Steps for applying for a franchise

To apply for a franchise, you need the following things:⁷

• Letter of intent
• Completed application form
• Valid government ID (2 required)
• Resume or CV
• Site details and photos
• Site location proposal with map
• Contract of lease (if renting)
• Financial documents (bank certifications, proof of liquid assets, audited financial statements)

The application process typically takes longer the larger the operation. Steps will vary between franchisors, but may include:

• Submitting documents
• Meeting with franchisor representatives
• Site inspection
• Financial verification
• Reviewing and signing the Franchise Agreement
• Paying the franchise fee
• Completing training
• Grand opening with operational support

Business registration requirements (for government compliance):

Before you can legally operate your franchise in the Philippines, you’ll need to register your business with various government agencies and get the right permits. The specific requirements vary depending on your business structure. Many of these forms are covered in our other articles. Take a look at our Guide to Starting a Business for info on business name registration, Mayor’s Permits, and Barangay Clearance.

For sole proprietorships:

• DTI Business Name Registration

For partnerships/corporations:

• SEC Registration
• Articles of Incorporation
• Bylaws
• Capitalisation details

Universal requirements (all business structures):

• BIR Registration for Tax Identification Number (TIN)
• Barangay Clearance
• Mayor’s Business Permit
• Sanitary Permit (for food franchises)
• Fire Safety Inspection Certificate
• Locational Clearance/Zoning Certificate
• FDA License for food franchises

For franchise agreements:

• Under Executive Order 169 of 2022, franchise agreements for MSMEs must be registered with DTI⁸
• If involving trademarks, must be recorded with Bureau of Trademarks (BOT)
• Registration with Intellectual Property Office of the Philippines (IPOPHL)

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Why a food franchise business is a popular choice in the Philippines

Food franchises dominate the Philippine market, representing 60% of all franchises.⁹ Here’s why:

High demand: Filipinos’ love for food makes food carts ubiquitous in malls, train stations, and public areas.

Affordable entry: Start for as low as PHP 16,988 - 50,000 for micro food carts. Many options are available under PHP 1 million.

Proven business model: Standardised recipes, established supply chains, and tested operational systems save time and reduce risk.

Brand recognition: Popular brands break even 30 - 50% faster than unknown concepts.¹⁶

Lower complexity: Food carts have lower overhead than traditional restaurants, reduced staffing needs, and higher profit margins.

Government support: DTI franchise loans offer 0% interest for the first year. SB Corp. provides funding up to PHP 20 million covering 80% of total investment.⁶

Popular low-cost food franchise examples

Let’s look at specific options across different price ranges, from ultra-low cost to higher investments.

Ultra-Low Cost (Under PHP 50,000)

Franchise	Initial investment	Features	Fees
Sip Up Coffee¹⁰	PHP 16,988	Micro-franchise coffee concept	Standard fees apply
Siomai King Online¹¹	PHP 17,888	Lifetime franchise, over 1,000 branches nationwide	No royalty fees, no renewal fees
Brew N' Bites¹⁰	PHP 29,889	Coffee and snacks concept	Standard fees apply

Mid-Range Options (PHP 100,000 - 500,000)

Franchise	Initial investment	Features	Fees
Potato Corner School Cart¹³	PHP 230,000	3-year term franchise	No royalty fees; renewal fee 50% of current franchise fee
Master Siomai SIOGO¹²	PHP 280,000	Includes cart, steamer, juicer, uniforms, marketing materials, starter packs	Standard fees apply
Potato Corner Standard Cart¹³	PHP 385,000	5-year franchise fee, includes cart/equipment/initial supplies	No royalty fees; ROI typically 12-18 months
Potato Corner Customized Store¹³	PHP 265,000	5-year franchise	Construction fees

Higher Investment (PHP 1M+)

Franchise	Initial investment	Features	Fees
Julie’s Bakeshop¹⁴	PHP 1.45 - 1.74 million total (PHP 300,000+ franchise fee)	Largest bakery franchise with 500+ outlets; 50 sqm minimum space	Royalty 5%; marketing fund 1.5%
7-Eleven¹⁵	PHP 3 million	Convenience store franchise	Standard fees apply

*Details accurate as of 30th October 2025

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Managing international franchise supply requirements

Many international franchises require franchisees to purchase ingredients, equipment, or proprietary products from approved overseas suppliers to maintain brand consistency.

Since 60% of foreign franchises in the Philippines are US-based, importing supplies and making overseas payments is common.¹⁷

The franchise agreement will probably tell you which suppliers you must use and the terms for acquiring products and supplies.

• For example, a US-based coffee franchise might require you to purchase proprietary syrups, roasted beans, or brewing equipment directly from approved American suppliers.
• A Japanese ramen franchise may mandate specific noodle types or broth bases that can only be sourced from Japan.

This requirement makes sense from the franchisor’s perspective - they need to ensure every location delivers the same quality and taste. But for franchisees, it creates a recurring financial challenge that many don’t anticipate when calculating their operational costs.

The hidden cost of international payments

Here’s where those “small” fees add up quickly. Traditional banks typically charge foreign transaction fees of 1 - 3% on international payments, plus they add hidden markups to the exchange rate.

When you’re paying a US supplier USD 5,000 monthly for ingredients and supplies, that 2 - 3% in fees means you could be losing PHP 5,000 - 7,500 every single month just in transaction costs.

For franchise owners making regular payments to overseas suppliers, these costs become a permanent drain on profit margins.

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Conclusion

Starting a low-cost franchise business in the Philippines is an attractive, direct path to entrepreneurship. The combination of established brands, government support programmes, and a thriving consumer market creates real opportunities.

The key is understanding the full financial picture. That advertised PHP 50,000 franchise fee might actually require PHP 300,000 - 400,000 when you factor in equipment, working capital, permits, and ongoing fees. For franchisees working with international brands, requiring imported supplies, managing cross-border payments efficiently becomes crucial - a Wise Business account can help avoid hidden exchange rate markups that traditional banks charge whenever you convert currencies to pay overseas suppliers. Cut down on hidden fees with a Wise Business account and simplify your international supply chain payments today.

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Sources:

1 - Franchise Details - Franchises in the Philippines

2 - Franchise Details - Royalty Fees

3 - Metrobank - Cost of Franchise Businesses

4 - Potato Corner - Franchising

5 - Figaro - FCG Brands Franchise Details

6 - SBCorp - MSME Financing Programs

7 - Money Max - Franchise Business Applications

8 - LawPhil - EO2022

9 - Franchise Details - Popular Food Franchises

10 - iFranchise - Food Cart Franchises

11 - Siomai King - Franchising

12 - Franchise Details - Affordable Franchises

13 - Potato Corner - Franchise Packages

14 - Julie's Bakeshop - Franchise Packages

15 - PFA - 7Eleven Franchising

16 - Franchise Details - Strong Brands

17 - Trade.gov - Philippines Franchise Market

Sources checked on 30th October 2025.