Indonesian Franchises – New Franchise Regulations for Indonesia / The rapid expansion of Indonesia franchise industry in recent years has motivated the Indonesian government to revise the franchise regulation no.16 of 1997. The explosion of home grown franchises by the end of 2005 whos numbers reached 129 brands, compared to 237 foreign franchises and only 2 years later, home grown franchises outnumbered foreign franchises by 450 to 250. This rapid growth has made the Indonesian government take notice and tighten up regulations and streamline business practices. The purpose of this new regulation is the establishment of franchise business activities in Indonesia and to encourage local businessman particularly for Small to Medium size Enterprises to develop their businesses into high-quality local franchise opportunities with competitive capability, nationally or internationally, particularly for domestic products. The Government needs to know the legality and bona fide business of the franchisors (local or abroad) in order to build business information transparency which can be used optimally in national business to marketing the goods and/or services by using a franchise system. By filing registration, the Government will be able to control and to organize the franchise transactions in order to produce a secure legal environment for any parties involved in a franchise business. In regard to re-registration for the existing franchise, the transitional provision of Government Regulation No. 42 of 2007 clearly states that any franchises agreement made prior to the issuance of this regulation shall be registered at the latest on 23 July 2008 or one year after the enactment date of this government regulation on 23 July 2007 as referred to Art. 11, which means the responsibility to file registration for the Franchise Agreement would be Franchisees responsibility.

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