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Franchising by LGUs
September 22, 2004

        
Not many people notice it, but the Sangguniang Panlungsod (SP) of Tacloban City is about to pass an ordinance that would require internet cafes to secure a franchise from it (SP) as a condition for their operation.

The expected passage of this local law is very significant, even historic. It appears that this is the first time the SP is requiring a franchise from itself for business establishments in Tacloban City (except those given to cockpits, a power exercised by the SP for many years).

Such an exercise of the power to grant franchises puts the Tacloban SP, the present one and all the others that would follow, in a position to use this power to control and regulate business in the city at any time.

The grant of franchise is supposed to be made in "the public interest" Question is: What business does not have "public interest"?

If there are dangers to society posed by such a technology as the internet - isn't there for all other businesses? Then what could be next? Hotels? Videoke Bars? Night clubs? Lotto betting stations? Restaurants? Gasoline stations? Billiard Halls? Theaters? Schools?

Other questions would be: Is franchising (which would, by the way, require the payment of a franchise tax) the best way to protect the interest of the public? Or are there more creative and effective ways?

The nature of the business being required to secure a franchise will determine the answer. If the requirement will have only a minimal effect then is such a franchise useful in the first place?

The Sangguniang Panlungsod is a legislative body. It is therefore, expected that for every problem that is brought to its attention, its cure will be an ordinance … but is it always the case?

If it will not solve the problem, but will largely have a negative effect then why require the franchise? One wonders.

The exercise of the power to control business will have the effect of discouraging business.

Regulating business in an environment where business is supposed to be made to flourish is certainly difficult to comprehend.