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Franchise License in Indonesia
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Franchising offers a superb business model in Indonesia, allowing entrepreneurs to avoid complexities of business strategy. Franchisees are responsible for planning, the operating system, and business strategy within the franchise, so your role primarily focuses on executing the operational procedures outlined during the agreement. To start a Franchise both Franchisors and Franchisees must obtain a Franchise License or STPUW in order to set up a franchise business in Indonesia.
Franchisor
- Definition: The entity that owns the brand and grants rights to use it.
- Ownership of Brand: Fully owns the trademark and business model.
- Responsibilities: Provides support, training, and operational guidelines.
- Initial Investment: Requires investment in creating and maintaining the brand.
- Licenses Required: Must obtain a Surat Tanda Pendaftaran Waralaba (STPW) from the Ministry of Trade and register franchise proposal documents.
- Regulatory Framework: Governed by Law No. 5 of 1999 and Law No. 40 of 2007 regarding franchises.
- Business Model Control: Retains significant control over how the business is run.
- Support Provided: Offers comprehensive support including marketing and operational assistance.
Franchisee
- Definition: The entity that receives the rights to operate under the brand.
- Ownership of Brand: Does not own the brand; operates under the franchisor's trademark.
- Responsibilities: Operates the business according to franchisor’s standards and guidelines.
- Initial Investment: Pays an initial franchise fee and ongoing royalties.
- Licenses Required: Also needs to obtain a STPW permit and Commitment Registration with similar documentation.
- Regulatory Framework: Governed by the same laws as franchisors; must comply with franchise agreements.
- Business Model Control: Limited control; must adhere to franchisor’s established practices.
- Support Provided: Receives training and ongoing support but has to manage daily operations independently.
Why do you need a legal advisor to register your Franchise License?
Understanding the franchise laws in Indonesia can be challenging. Ensuring compliance with Indonesian regulations in your franchise agreement is vital, and hiring a legal advisor can safeguard the interests of both the franchisor and franchisee. The legal advisor will help you with:
- Ensuring the franchising relationship is transparent, with a clear outline of each party's rights and responsibilities regarding fees, intellectual property, and termination conditions.
- Drafting a Comprehensive Agreement. A well-drafted agreement addresses key areas like territory, training, support, and dispute resolution, preventing future conflicts.
- Preparing the Disclosure Document. This mandatory document outlines the franchise system’s details, helping potential franchisees make informed decisions.
- Advising on Business Control and understand the level of control a franchisor can exercise over the franchisee’s operations while complying with Indonesian law.
- Ensuring the franchise agreement adheres to general contract law principles, making it legally enforceable.
Document Requirements
- Copy of Technical Licence
- Copy of Franchise Offering Prospectus from Franchisor
- Copy of Franchise Agreement
- Copy of Company Registration Certificate (TDP)
- Copy of the Franchisor's STPW
- Copy of the Company's Deed of Establishment and/or Deed of Amendment that has been authorised by the Authorised Agency
- Copy of Proof of IPR Registration
- Copy of ID Card of the Company Owner/Responsible Person
Register an Franchise License in Indonesia with LMI Consultancy
- Consult your inquiry with our professional consultant
- Submit necessary document
- Proceed with the payment
- Application process
- Receive the complete document
Other Popular Legal Licensing Services in Indonesia
Setup a Business in Indonesia with LMI Consultancy
Established in 2016, LMI Consultancy has been supporting countless individuals in understanding the intricacies of visas, business setup, tax & accounting, and property investment in Indonesia, providing a comprehensive and dependable service.
We take pride in being an ethical and innovative company that places a strong emphasis on exceptional customer service and strives to set a new standard in our industry, guaranteeing a smooth and encouraging experience for our clients.
FAQ
Can a company from another country franchise its business in Indonesia?
Yes, however, they need to officially register their company as an entity in Indonesia.
To become a franchisee, is a PT mandatory?
Yes, setting up at least a PT is necessary in order to become a Franchisee.
What is a STPUW?
The STPUW (Surat Tanda Pendaftaran Waralaba) serves as legal proof that the franchisee is officially registered under the franchise agreement.
Disclaimer : Our services in LMI Consultancy provide consulting services focused on ensuring client compliance with applicable immigration and legal regulations in Indonesia. We do not provide or facilitate the production of official government documents, nor do we offer any expedited or preferential access to government services.
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