International Franchise Agreement Template for Indonesia

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Key Requirements PROMPT example:

International Franchise Agreement

"I need an International Franchise Agreement for a US-based fast-food chain expanding into Indonesia, with specific provisions for Halal certification requirements and local sourcing of ingredients, planned to commence operations in March 2025."

Document background
The International Franchise Agreement is essential for foreign businesses seeking to expand their franchise operations into Indonesia. This document is specifically designed to comply with Indonesian franchise regulations, particularly Government Regulation No. 42 of 2007 and Minister of Trade Regulation No. 71 of 2019. It's used when a foreign franchisor wishes to grant franchise rights to an Indonesian entity, requiring careful consideration of local content requirements, mandatory use of the Indonesian language, and specific registration obligations with the Ministry of Trade. The agreement must address both international commercial aspects and unique Indonesian regulatory requirements, including local partnership provisions, territorial restrictions, and intellectual property protection under Indonesian law. It's crucial for establishing clear operational standards while ensuring compliance with Indonesian foreign investment and franchise regulations.
Suggested Sections

1. Parties: Identification of the Franchisor and Franchisee, including complete legal names, registration details, and addresses

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

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including specific Indonesian legal terms

4. Grant of Franchise: Scope of franchise rights, territorial exclusivity, and terms of the grant

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

6. Franchise Fees and Payments: Initial fees, ongoing royalties, marketing contributions, and payment terms including international transfer provisions

7. Franchisor's Obligations: Training, support, operations manual, ongoing assistance, and quality control measures

8. Franchisee's Obligations: Operational standards, compliance requirements, local content requirements, reporting obligations

9. Intellectual Property Rights: Usage of trademarks, trade secrets, and other IP, including local registration requirements

10. Quality Control: Standards maintenance, inspection rights, and compliance with Indonesian regulations

11. Confidentiality: Protection of confidential information and trade secrets

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

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

14. Post-Termination: Obligations and rights after agreement ends

15. Governing Law and Dispute Resolution: Application of Indonesian law and dispute resolution mechanisms

16. General Provisions: Standard clauses including force majeure, notices, and amendments

Optional Sections

1. Local Partnership Requirements: Required if the franchise structure includes mandatory local partnerships under Indonesian regulations

2. E-Commerce Rights: Include if the franchise involves online sales or digital platforms

3. Multi-Unit Development: Include if the franchisee has rights to develop multiple units

4. Halal Certification: Required for food and beverage franchises in Indonesia

5. Currency Risk Management: Include if parties agree on specific currency risk allocation

6. Training Program Details: Can be in main agreement or schedule depending on complexity

7. Local Content Implementation: Detailed section on meeting local content requirements if applicable to the industry

Suggested Schedules

1. Schedule 1 - Licensed Marks: Details of all trademarks, service marks, and other IP being licensed

2. Schedule 2 - Territory Definition: Detailed description of the granted territory including maps if applicable

3. Schedule 3 - Initial Fee and Ongoing Payments: Detailed breakdown of all financial obligations

4. Schedule 4 - Operating Manual Table of Contents: Overview of the operating manual contents (full manual provided separately)

5. Schedule 5 - Initial Training Program: Details of required initial training

6. Schedule 6 - Minimum Performance Requirements: Sales targets and other performance metrics

7. Schedule 7 - Approved Suppliers: List of approved suppliers meeting local content requirements

8. Schedule 8 - Required Insurance: Insurance types and minimum coverage requirements

9. Schedule 9 - Form of Confidentiality Agreement: Template for staff confidentiality agreements

10. Schedule 10 - Local Adaptation Requirements: Specific adaptations required for Indonesian market

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

Hospitality

Personal Services

Fashion & Accessories

Health & Beauty

Automotive Services

Entertainment

Professional Services

Relevant Teams

Legal

International Operations

Business Development

Compliance

Finance

Commercial

Regulatory Affairs

Intellectual Property

Operations

Strategy

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Head of International Operations

Franchise Development Director

Legal Counsel

Commercial Director

Business Development Manager

Operations Director

Compliance Officer

International Expansion Manager

Franchise Relations Manager

Chief Financial Officer

Country Manager

Intellectual Property Manager

Regulatory Affairs Director

Industries
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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