Franchise Law
IN INDONESIA

Complying with franchise law in Indonesia is essential for both franchisors and franchisees to ensure legal operation, protect rights, and maintain business integrity.

critical aspects of franchise law

    • 1. Intellectual Property: Ensure trademarks and other intellectual property are properly registered and protected in Indonesia to maintain brand integrity and prevent unauthorized use.
    • 2. Compliance with Local Laws: Both franchisors and franchisees must comply with local regulations, including labor laws, tax regulations, and business licensing requirements. Foreign franchisors need to adhere to Indonesia’s foreign investment regulations, which may involve partnership requirements with local entities.
    • 3. Dispute Resolution: Encourage mediation and arbitration as preferred methods for resolving disputes between franchisors and franchisees. The Indonesian Franchise Association (AFI) can also assist in resolving conflicts and promoting best practices within the industry.

Establishing a franchise in Indonesia involves several key steps under the Franchise Law:

Research and Preparation

Conduct thorough market research to assess the feasibility of franchising in Indonesia. Seek legal advice to understand local regulations and requirements.

Registration and Documentation

Register your franchise system with the Ministry of Trade. Prepare a comprehensive disclosure document for potential franchisees, detailing financials, fees, royalties, and the franchise agreement template.

Franchise Agreement

Draft a complaint franchise agreement that clearly defines rights, obligations, and terms for both parties. Include provisions for territory rights, support services, fees, and conditions for renewal or termination.

Compliance and Expansion

Monitor compliance with regulations and franchise agreements. Resolve disputes through mediation or arbitration if necessary. Evaluate performance for renewal and consider expanding the franchise network in Indonesia.

Ensuring compliance with these key aspects of Indonesia’s franchise law helps protect both franchisors and franchisees, promoting a fair and transparent business environment.

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Our dedicated team is ready to assist you and providing the necessary legal support to address your concerns in accordance with Indonesian law.

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