How to Register a Franchise in Indonesia – Franchising allows us to start a business by growing and branching out by giving entrepreneurs and small business owners the opportunity to try their hand at running their own business with organized help and support from a systematic center and with proven success.

Franchising is a way to find business success for entrepreneurs easily. However, it is important to understand what is involved before taking advantage of this less risky but still rewarding option for starting a business.

Below is information about How to register a franchise in Indonesia.

Definition of franchise in Indonesia

Based on the Minister of Trade Regulation No. 71 of 2019, franchise is a special right owned by an individual or business entity for a business system with business characteristics in order to market goods and/or services that have proven successful and can be utilized and/or used by other parties based on a Franchise Agreement.

Type of business franchise

1. Automotive, such as auto accessory, car wash franchise, and car dealer franchise.
2. Education, such as courses and playgroups.
3. Entertainment, such as family recreation and movie rentals.
4. Fast food and bakeries, such as places to eat pizza, burgers and cakes.
5. Health center, such as drugstores, body care, and salons.
6. Hotel.
7. Laundry.
8. Property and real estate, such as real estate developers and property and real estate brokers.
9. Cafes and restaurants.
10. Tour and travel, such as travel agents.
11. Retail, outlets and minimarts, such as supermarkets and minimarkets.

An example of a franchise in Indonesia

Based on the origin, the franchise is divided into:

1. Franchises from abroad, for example Kentucky Fried Chicken (KFC) or other restaurants from abroad.
2. Franchises from within the country, for example Alfamart.

How to Open a franchise business

1. Have SOP
2. Registering Your Brand
3. Have Interesting Characteristics
4. Clear Financial Records
5. Provide Full Support
6. Proven Profitable
7. Fulfilling Documents
8. Create a Franchise Registration Letter

Terms of Establishing a Franchise

Pre-contract terms

1. The identity of the franchise business owner;
2. Legal documents;
3. Organizational structure;
4. business history;
5. Balance audit for the last 2 years;
6. Number of franchise businesses; And
7. Franchise list

Administrative requirements

1. Franchise Registration Letter Application Form (accompanied by company stamp, director’s signature, and stamp duty)
2. Photocopy of the owner’s identity such as a KTP with the original KTP
3. Copy of franchise agreement
4. Photocopy of business license
5. Copy of franchise offer prospectus
6. Details of labor usage
7. Photocopy of proof of IPR registration
8. Photocopy of deed of establishment for legal entities
9. Photocopy of personal NPWP and company NPWP
10. Composition of goods/raw materials that are franchised
11. Proof of BPJS Employment and Health BPJS membership
12. Stamped power of attorney (if handled by a third party)
13. Management Power of Attorney (if passed by an intermediary)

Technical requirements

1. Attach a letter of recommendation from the local Trade Office;
2. About 80% of the equipment and merchandise in a franchise business must be produced domestically; And
3. Franchise owners must cooperate with small and medium-sized companies to fulfill franchise ownership requirements.

Advantages in running a franchise business

1. It can be faster to start a business
2. Have a Professional Partner
3. No Product Branding Required
4. Get Full Support from the Franchisor
5. Get Free Promotional Media
6. Easy Financial Management
7. High Success Rate

Weaknesses in running a franchise business

1. All Control is exercised in Full by the Franchisor
2. Sole Supplier of Product Raw Materials
3. Business reputation is easily affected
4. Franchisor Fees
5. Profit sharing

Closing

Thus the information above that you need to know how to set up a franchise.

If you have difficulty setting up a franchise business and want to consult further about legal services regarding how to set up a franchise in Indonesia.

You can contact Indoservice.

Indoservice, a secretarial and licensing consulting company firm that can assist you in setting up a company in Indonesia and related to business licensing. Trusted and experienced in Indonesia, committed to providing the best and fast service to meet your needs.

We and the team will assist you in the process of establishing a PT and obtaining permits related to your business in Indonesia. Call us now for more info at Tel. +62877-1449-8500 or email admin@indoservice.co.id.