Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Legislation and Associations Around the World 387
is responsible for mandating rules and codes of conduct for franchise operations
and promoting franchise development. 157
3. Indonesia
On 18 June 1997, the Indonesian Government issued Government Regulation
No. 16/1997, which relates specifically to franchising. This Regulation requires
disclosure and the registration of both the franchise agreement and the disclosed
information within the Ministry of Industry and Trade. The Decree of the
Minister of Industry and Trade No. 259/MPP/Kep/7/1997, implementing
franchise regulations, was adopted in July that same year. 158
Under Articles 2(1) and (2) of the Decree, Franchise Agreements must be
in writing and in Indonesian. In addition, franchisors and franchisees must give
priority to the use of local products or raw materials and the franchisor must
provide guidance and training to the franchisee. The Decree also establishes the
procedure for the franchisee’s registration of the franchise agreement and the
issuing on the past of the Government of a trade license under Articles 11 to
16. 159 The franchisee must file, within thirty business days after the execution of
the Franchise Agreement, the disclosure document with the Indonesian Ministry
of Industry and Trade in the Indonesian province where the franchised business
will be operated, along with the translated Franchise Agreement and certain
other application materials, to obtain the franchised business registration
certificate. 160
The disclosure document must include: information about the franchisor,
including (i) the name and place of business, and the franchisor’s financial
condition; (ii) information about intellectual property rights and special
characteristics of the franchised business; (iii) terms and conditions to be fulfilled
by the franchisee; (iv) assistance or facility offered by the franchisor to the
franchisee; (v) rights and obligations of the franchisor and the franchisee; and
(vi) conditions for the expiration, termination, and extension of the Franchise
Agreement and other matters necessary for the performance of the Franchise
Agreement. 161
157
Franchisebusiness.com (The Official Directory of the Franchise Council of Australia), “China –
The New Franchise Frontier,” online: .
158
UNIDROIT, “Legislation and Regulations Relevant to Franchising - Indonesia,” online:
.
159
Ibid.
160
Frank Zaid and Kendal Tyre, supra note 29 at A-7
161
Ibid.