Franchise Partnership Agreement Template for Indonesia

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Key Requirements PROMPT example:

Franchise Partnership Agreement

"I need a Franchise Partnership Agreement under Indonesian law for my international food and beverage brand expanding into Jakarta, with rights for the franchisee to develop 5 outlets by March 2025 and including provisions for local ingredient sourcing requirements."

Document background
The Franchise Partnership Agreement is a crucial document used when establishing a franchise business relationship in Indonesia. It serves as the primary legal framework governing the rights and obligations between a franchisor and franchisee, ensuring compliance with Indonesian franchise regulations, particularly Government Regulation No. 42 of 2007 and Minister of Trade Regulation No. 71 of 2019. The agreement covers essential aspects such as intellectual property licensing, operational standards, territory rights, fees, and support services. It's specifically designed to meet Indonesian legal requirements, including local content provisions, mandatory registration with the Ministry of Trade, and protection of both parties' interests. This document is fundamental for businesses expanding through franchising in Indonesia and must incorporate specific local regulatory requirements while maintaining international franchise standards.
Suggested Sections

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

2. Background: Context of the agreement, description of the franchise business, and brief history of the franchise system

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Grant of Franchise: Specific rights being granted, territory limitations, and exclusivity provisions

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

6. Franchise Fees: Initial franchise fee, ongoing royalties, and other financial obligations

7. Intellectual Property Rights: Use of trademarks, trade secrets, and other intellectual property

8. Training and Support: Franchisor's obligations regarding initial and ongoing training and support

9. Operating Standards: Required operational procedures, quality standards, and compliance requirements

10. Marketing and Advertising: Marketing obligations, advertising fees, and promotional requirements

11. Supply Chain Requirements: Approved suppliers, purchasing obligations, and inventory requirements

12. Records and Reporting: Required financial records, reporting obligations, and audit rights

13. Non-Competition and Confidentiality: Restrictions during and after the agreement term

14. Default and Termination: Events of default, termination rights, and post-termination obligations

15. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law

16. General Provisions: Standard contractual provisions including notices, assignment, and amendments

Optional Sections

1. Sub-Franchising Rights: Include when the franchisee is granted rights to sub-franchise within their territory

2. Development Schedule: Include when the agreement includes multiple unit development rights with specific timelines

3. Local Content Requirements: Include specific section when dealing with mandatory local content requirements under Indonesian regulations

4. E-Commerce Rights: Include when online sales channels are part of the franchise system

5. Force Majeure: Include detailed force majeure provisions for markets with specific risks or concerns

6. Property Requirements: Include when there are specific requirements for premises ownership or leasing

7. Environmental Compliance: Include for businesses with significant environmental impact or requirements

Suggested Schedules

1. Schedule A - Licensed Marks: Detailed list of all trademarks, service marks, and other intellectual property included in the franchise

2. Schedule B - Territory Description: Detailed description of the granted territory, including maps and boundary definitions

3. Schedule C - Initial Franchise Fee and Royalty Structure: Detailed breakdown of all fees, payment schedules, and calculation methods

4. Schedule D - Operations Manual Table of Contents: Overview of the operations manual content (while keeping specific details confidential)

5. Schedule E - Initial Training Program: Details of required initial training, including duration, location, and content

6. Schedule F - Approved Suppliers: List of approved suppliers and specific purchasing requirements

7. Schedule G - Initial Investment and Financial Requirements: Detailed breakdown of required initial investment and ongoing financial obligations

8. Schedule H - Standard Store Layout and Equipment Requirements: Specifications for store design, equipment, and fitout requirements

9. Appendix 1 - Compliance Certificate: Standard form for periodic compliance certification

10. Appendix 2 - Confidentiality Agreement: Standard form of confidentiality agreement for employees and contractors

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Food & Beverage

Retail

Education & Training

Healthcare Services

Hospitality

Personal Services

Automotive Services

Fashion & Apparel

Technology & Electronics

Fitness & Wellness

Professional Services

Home Services

Relevant Teams

Legal

Operations

Compliance

Business Development

Finance

Brand Management

Training & Development

Quality Assurance

Commercial

Intellectual Property

Risk Management

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Franchise Development Director

Business Development Manager

Legal Counsel

Operations Director

Compliance Officer

Commercial Director

Franchise Manager

Training Manager

Quality Assurance Manager

Brand Manager

Finance Director

Regional Development Manager

Intellectual Property Manager

Industries
Government Regulation No. 42 of 2007 on Franchising: The primary regulation governing franchise businesses in Indonesia, covering registration requirements, rights and obligations of franchisors and franchisees, and mandatory provisions in franchise agreements
Minister of Trade Regulation No. 71 of 2019: Specific regulation on franchise implementation, including requirements for franchise registration, STPW (Franchise Registration Certificate), and local content requirements
Law No. 20 of 2008 on Micro, Small and Medium Enterprises: Relevant for partnership provisions and protection of local businesses in franchise relationships
Law No. 24 of 2019 on Creative Economy: Pertains to intellectual property rights and creative business aspects often involved in franchise arrangements
Law No. 40 of 2007 on Limited Liability Companies: Relevant for corporate structure and governance aspects of the franchise business
Law No. 5 of 1999 on Prohibition of Monopolistic Practices: Anti-monopoly and fair competition regulations that affect territorial restrictions and market division in franchise agreements
Law No. 20 of 2016 on Marks and Geographical Indications: Governs trademark protection and licensing, crucial for franchise intellectual property rights
Law No. 25 of 2007 on Investment: Regulates foreign investment aspects in franchise businesses, including ownership restrictions and investment requirements
Indonesian Civil Code (KUHPerdata): Provides basic contract law principles applicable to franchise agreements, including formation, validity, and enforcement of contracts
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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