Company Franchise Agreement Template for Indonesia

The Company Franchise Agreement is a crucial document used when establishing a franchise business relationship in Indonesia, governed by Indonesian law and specifically complying with Government Regulation No. 42 of 2007 on Franchising. This agreement is essential when a business (franchisor) wishes to grant another entity (franchisee) the right to use its business system, intellectual property, and brand in Indonesia. The document must address mandatory provisions required by Indonesian law, including local content requirements, registration with the Ministry of Trade, protection of intellectual property rights, and specific operational standards. It needs to balance international franchise practices with local regulatory requirements, particularly regarding foreign ownership restrictions, mandatory local partnerships, and territorial rights. The agreement typically includes comprehensive details about operational procedures, quality control measures, financial obligations, and dispute resolution mechanisms tailored to the Indonesian legal context.

1. Parties: Identification of the franchisor and franchisee, including complete legal names, registration numbers, and authorized representatives

2. Background: Context of the agreement, brief description of the franchise system, and the parties' intentions

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Grant of Franchise: Explicit grant of franchise rights, territory definition, and exclusivity terms

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Franchise Fees: Initial franchise fee, ongoing royalties, advertising contributions, and payment terms

7. Franchisor's Obligations: Support, training, operations manual, marketing assistance, and ongoing support obligations

8. Franchisee's Obligations: Operational standards, compliance requirements, reporting obligations, and maintenance of standards

9. Intellectual Property: Usage rights and restrictions for trademarks, trade secrets, and other IP

10. Training and Support: Initial and ongoing training requirements, support services, and assistance programs

11. Quality Control: Quality standards, inspection rights, and compliance requirements

12. Marketing and Advertising: Marketing requirements, advertising fund contributions, and promotional guidelines

13. Confidentiality: Protection of confidential information and trade secrets

14. Non-Competition: Competition restrictions during and after the agreement term

15. Reporting and Records: Financial reporting requirements, record-keeping obligations, and audit rights

16. Transfer and Assignment: Conditions for transfer of franchise rights and change of ownership

17. Termination: Grounds for termination, procedures, and consequences

18. Post-Termination Obligations: Obligations and restrictions following agreement termination

19. Dispute Resolution: Procedures for resolving disputes, including mediation and arbitration provisions

20. Governing Law: Application of Indonesian law and jurisdiction