Franchise Registration in Indonesia

Franchise Registration in Indonesia is a hugely popular business practice in recent years. In concept, a franchise business consists of a business deal between the original owner (franchisor) and the license holder (franchisee) that seeks to expand the same business to new locations. With this type of business model, both parties could reap the benefits. 

Criteria of Franchise Registration

According to the Ministry of Trade Regulation No. 71 of 2019, there are several criterias of a franchise business, such as

  • proven record that the franchise is already profitable
  • has a written standard for marketing goods and/or services; 
  • easy to teach and apply
  • there is continuous support
  • registered Intellectual Property Rights (IPR).  

Basic Requirements of Franchise Registration Indonesia

In accordance with Government Rule Number 42 of 2007, there are several basic requirements necessary for a franchise business. First, it must  have a distinct unique selling point, proven track record of generating profit, proper Standard Operating Procedures of the products or services, continuous support from the franchisor, and Intellectual Property Rights documents. 

Pre-Contract Requirements of Franchise Registration in Indonesia

There are several documents you must prepare for the pre-contract stage to do Franchise Registration, such as:

  1. Identity of franchise owners
  2. General legal documents
  3. Business history
  4. Business structure
  5. Balance sheet audit for the past 2 years
  6. Numbers and names of existing franchises

Administrative Requirements to do Franchise Registration

There are several administrative requirements for Franchise Registration, such as:

  1. Registration Form
  2. Copy and original ID Card of the Franchisee
  3. Copy of franchise prospectus
  4. Copy of franchise agreement
  5. Copy of business license
  6. Copy of HAKI Registration
  7. Details of manpower plans
  8. Composition of franchised raw materials
  9. Copy of Article of Association
  10. Copy of individual and company Tax ID Number
  11. Copy of BPJS Health and BPJS Manpower Membership Card
Related Article:  Food and Medicine Registration in BPOM

Technical Requirements of Franchise Registration

There are several technical requirements to register a Franchise, such as:

  1. Recommendation letter from Ministry of Trade
  2. 80% percent of production tools and products themselves must be produced in Indonesia
  3. Franchisees must collaborate with local Micro, Small, and Medium Enterprises.

Procedures of Franchise Registration in Indonesia

To make it easier for business people throughout Indonesia to start a business, since 2018 the government has implemented Online Single Submission (OSS). With this system, business people can take care of various business licenses, intellectual property rights and also manage franchise businesses. The following is a brief procedure for obtaining a franchise business license using the OSS method:

  1. Register via https://oss.go.id/oss/ and fill in the information on the list menu, and validate the account email and user ID and password to log-in.
  2. Get NIB (Business Identification Number)
  3. Issuance of a Franchise Registration Certificate (STPW)
  4. Fulfillment of Commitment Requirements such as fulfilling prospectuses and franchise agreements
  5. Issuance of STPW by the Directorate of Business Development and Distribution Actors of the Ministry of Trade and/or the Investment Service and also by Regency and City PTSP

How can Double M help?

Franchise Registration in Indonesia is an excellent way to expand your business operations in the country. Double M strives to help our clients throughout the whole registration procedure. Should you have any inquiries, please contact us.