Company Registration & Legal Services
A franchise business model is one of the best business agreement to be done in Indonesia to start up your business because, through franchise relationship, business owners don’t have to worry about things related to the business strategy. The franchise is a business where franchisors will be responsible in terms of planning, the operating system and the business strategy of the franchise, so you only need to carry out the operational system and procedures that have been informed by you when agreeing to the franchise business cooperation.
As easy as it sounds, starting a franchising business in Indonesia will also require you to adhere to Indonesia laws, as mandated through Peraturan Menteri Perdagangan (Ministry of Trade) No. 31/M-DAG/PER/8/2008 regarding the Implementation of Franchising. Both Franchisors and Franchisees must obtain a Franchise License or STPUW in order to set up a franchise business in Indonesia.
STPUW (Surat Tanda Pendaftaran Waralaba) acts as legal evidence that Franchisee has officially registered their names under the franchise agreement.
As a market-leading business consultancy in Indonesia, Lets Move Indonesia helps your franchise business to acquire the STPUW license, ensuring an efficient process and zero hassle when opening a franchise in Indonesia.
Franchising involves a unique business relationship where a franchisor grants a license to a franchisee, allowing them to operate a business using the franchisor’s established brand, products, and systems.
Franchisor:
Franchisee:
In essence, the franchisor creates and maintains the franchise system, while the franchisee operates a specific unit within that system. The franchisor provides the blueprint for success, while the franchisee implements it at the local level.
Yes, but they have to register their company first as an Entity in Indonesia.
Yes, you need to make at least a PT to become a Franchisee.
Your business license can be revoked and government can legally close your business.
Navigating Indonesia’s franchise laws can be complex. Engaging a legal advisor is crucial to ensure your franchise agreement complies with Indonesian regulations, safeguarding both the franchisor and franchisee. They will:
In a franchise arrangement, the franchisee usually does not own the property where they operate. Instead, they have the “right to use” the franchisor’s brand and business model within a specified location. This allows franchisees to benefit from a proven business model and established brand recognition without the need for extensive property investment.
Features | Franchising | Setting Up Your Own Business |
---|---|---|
Brand Recognition | Established brand and reputation, attracting customers more easily. | Building brand recognition and customer loyalty takes time and effort. |
Business Model | Proven business model, reducing the risk of failure | Flexibility to create and adapt your own unique business model. |
Support | Training, marketing, and operational support from the franchisor. | You are responsible for all aspects of business operations and support. |
Costs | Franchise fee, ongoing royalties, and marketing fees can be expensive. | Lower initial costs but may incur higher expenses for marketing and development. |
Control | Limited control over business operations and decision-making, following the franchisor’s rules. | Full control over all aspects of your business. |
Agreement | Franchise agreement may include restrictions on pricing, products, and territories. | No restrictions, but you are solely responsible for legal and regulatory compliance. |
Relationship | Business relationship is established with the franchisor, requiring adherence to their standards. | You are independent and not bound by any franchisor relationship. |
Disclosure | Franchise disclosure documents provide detailed information about the franchise. | You are responsible for researching and understanding all aspects of your business. |
Expansion | Potential for easier expansion with the franchisor’s support. | Expanding your business may be more challenging and require additional resources. |
Innovation | Limited ability to innovate or change the business model. | Freedom to innovate and adapt your business to market trends and customer needs. |
Exit Strategy | License to use the brand may have restrictions on selling or transferring the business. | Greater flexibility in selling or transferring your business. |
The specific terms and conditions of a franchise agreement will vary depending on the franchisor and the industry. It’s essential to thoroughly review the franchise disclosure documents and seek legal advice before entering into any licensing and franchising agreement.
There are certain classifications for Franchisors and Franchisees that require different prerequisite documents to file in order to obtain a Franchise License:
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