Restaurant Franchise Agreement Template for Indonesia

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Key Requirements PROMPT example:

Restaurant Franchise Agreement

"I need a Restaurant Franchise Agreement for expanding my Japanese ramen chain into Indonesia, specifically focusing on halal certification requirements and protection of our proprietary recipes, with plans to open our first location in Jakarta by March 2025."

Document background
The Restaurant Franchise Agreement serves as the foundational document for establishing a franchised restaurant operation in Indonesia. It is used when a restaurant brand owner (franchisor) grants rights to a local business operator (franchisee) to use their brand, system, and intellectual property in operating a restaurant location. The agreement must comply with Indonesian franchise regulations, particularly Government Regulation No. 42 of 2007 and Minister of Trade Regulation No. 71 of 2019, which require specific provisions and registrations. This document covers all essential aspects of the franchise relationship, including operational standards, training requirements, quality control, financial obligations, and territory rights, while incorporating local regulatory requirements such as local content provisions and halal certification where applicable. It's particularly crucial in the Indonesian market where franchise businesses must navigate both international brand standards and local regulatory requirements.
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 system, and franchisor's ownership of the system

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

4. Grant of Franchise: Scope of franchise rights, territory, and exclusivity provisions

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

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

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

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

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

10. Marketing and Advertising: Marketing obligations, advertising standards, and use of marketing funds

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

12. Confidentiality: Protection of confidential information and trade secrets

13. Non-Competition: Restrictions during and after the franchise relationship

14. Transfer and Assignment: Conditions for transfer of the franchise rights

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

16. Post-Termination Obligations: Obligations of parties after termination or expiration

17. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

18. General Provisions: Standard contractual provisions including notices, amendments, and severability

Optional Sections

1. Halal Compliance: Required if the restaurant serves halal food, detailing halal certification and compliance requirements

2. Multiple Unit Development: Include if the franchisee has rights to develop multiple units

3. E-Commerce Rights: Include if online ordering or delivery services are part of the franchise

4. Import Requirements: Include if proprietary ingredients or equipment must be imported

5. Local Content Requirements: Include specific section if required by Indonesian regulations for local sourcing

6. Social Media Policy: Include if social media management is a significant part of the business

7. Force Majeure: Detailed force majeure provisions (particularly relevant post-COVID)

8. Environmental Compliance: Include if there are specific environmental requirements or certifications

Suggested Schedules

1. Operations Manual Table of Contents: List of contents of the confidential operations manual

2. Approved Location and Territory: Detailed description of the approved location and territorial rights

3. Initial Fee and Royalty Schedule: Detailed breakdown of all fees, royalties, and payment terms

4. Required Equipment and Specifications: List of required equipment, furniture, and fixtures with specifications

5. Approved Suppliers: List of approved suppliers and purchasing requirements

6. Menu Items and Recipes: Approved menu items and standardized recipes

7. Training Program: Detailed training requirements and programs

8. Brand Standards: Detailed specifications for use of trademarks and brand elements

9. Initial Investment Estimate: Detailed breakdown of estimated initial investment

10. Form of Confidentiality Agreement: Template for employee confidentiality agreements

11. Insurance Requirements: Detailed insurance coverage requirements

12. 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

Hospitality

Retail

Franchising

Restaurant Operations

Food Service

Quick Service Restaurants

Casual Dining

Fine Dining

Food Manufacturing

Retail Property

Business Services

Relevant Teams

Legal

Operations

Finance

Business Development

Compliance

Property

Training

Quality Assurance

Brand Management

Food Safety

Commercial

Relevant Roles

Franchise Development Manager

Legal Counsel

Operations Director

Chief Executive Officer

Managing Director

Business Development Manager

Franchise Operations Manager

Commercial Director

Chief Financial Officer

Restaurant Manager

Quality Assurance Manager

Training Manager

Property Manager

Compliance Officer

Brand Manager

Food Safety 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 for franchise agreements
Minister of Trade Regulation No. 71 of 2019: Specific regulations on franchise implementation, including requirements for franchise registration (STPW), local content requirements, and reporting obligations
Law No. 8 of 1999 on Consumer Protection: Regulations ensuring consumer rights and safety, particularly relevant for food service businesses
Government Regulation No. 28 of 2004 on Food Safety: Regulations regarding food safety, quality, and hygiene standards that must be maintained in restaurant operations
Law No. 13 of 2003 on Manpower: Employment regulations governing worker rights, wages, working hours, and other employment-related matters
Law No. 20 of 2016 on Marks and Geographical Indications: Protection of trademarks and intellectual property rights essential for franchise operations
Indonesian Civil Code (KUHPerdata): Basic contract law principles governing agreements, including formation, performance, and termination of contracts
Law No. 40 of 2007 on Limited Liability Companies: Corporate law requirements if the franchisee establishes a company to operate the franchise
Regional Government Regulations on Business Licenses: Local licensing requirements and permits needed for restaurant operations in specific regions
Law No. 33 of 2014 on Halal Product Assurance: Regulations regarding halal certification and compliance, which is important for food service businesses in Indonesia
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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