Standard Franchise Agreement Template for Indonesia

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Key Requirements PROMPT example:

Standard Franchise Agreement

"I need a Standard Franchise Agreement for my Indonesian food and beverage business starting March 2025, with specific provisions for Halal certification requirements and protection of secret recipes, as we plan to expand through franchising across major Indonesian cities."

Document background
The Standard Franchise Agreement serves as the foundational document for establishing franchise operations in Indonesia, subject to specific regulatory requirements under Government Regulation No. 42 of 2007 and Minister of Trade Regulation No. 71/M-DAG/PER/8/2019. This agreement is essential when a business wishes to expand through franchising in Indonesia, requiring careful attention to local content requirements, mandatory provisions, and registration obligations. The document comprehensively covers all aspects of the franchise relationship, including operational standards, intellectual property rights, financial terms, and compliance requirements. It is particularly important as Indonesian franchise law mandates specific provisions and disclosures, making this agreement a crucial tool for ensuring legal compliance while protecting both franchisor and franchisee interests.
Suggested Sections

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

2. Background: Introduction to the franchise system, brief history, and context of the agreement

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

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

5. Term and Renewal: Initial term duration, conditions for renewal, and renewal procedures

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

7. Franchisor Obligations: Training, support, operations manual, ongoing assistance, and other franchisor commitments

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

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

10. Training and Support: Initial and ongoing training requirements, technical support provisions

11. Marketing and Advertising: Marketing requirements, advertising fund contributions, local marketing obligations

12. Quality Control: Quality standards, inspection rights, compliance requirements

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

14. Transfer and Assignment: Conditions for transfer of franchise rights, approval requirements

15. Termination: Termination conditions, notice requirements, and consequences of termination

16. Post-Termination Obligations: Obligations after agreement end, including non-compete and confidentiality

17. Dispute Resolution: Dispute resolution procedures, governing law, jurisdiction

18. General Provisions: Standard boilerplate clauses, notices, entire agreement, amendments

Optional Sections

1. Development Rights: Used when granting rights to develop multiple franchise units or master franchise rights

2. E-commerce Rights: Include when addressing online sales channels and territorial protection in digital space

3. Emergency Management: Include for businesses requiring specific emergency protocols or crisis management procedures

4. Environmental Compliance: Required for franchises with significant environmental impact or specific environmental regulations

5. Halal Certification: Include for food and beverage franchises requiring Halal certification in Indonesia

6. International Operations: Include when franchise may operate across international borders

7. Supply Chain Requirements: Include when franchise requires specific supplier relationships or local sourcing requirements

Suggested Schedules

1. Schedule 1 - Territory Description: Detailed description and/or maps of the granted territory

2. Schedule 2 - Initial Fees and Ongoing Payments: Detailed breakdown of all financial obligations

3. Schedule 3 - Initial Equipment and Inventory Requirements: List of required initial purchases and specifications

4. Schedule 4 - Training Program: Detailed training requirements and programs

5. Schedule 5 - Operations Manual Table of Contents: Overview of operations manual content

6. Schedule 6 - Brand Standards: Detailed brand guidelines and standards

7. Schedule 7 - Approved Suppliers: List of approved suppliers and purchasing requirements

8. Schedule 8 - Local Content Requirements: Specific local content requirements under Indonesian regulations

9. Schedule 9 - Reporting Templates: Standard forms for required periodic reports

10. Schedule 10 - Insurance Requirements: Detailed insurance coverage requirements

11. Appendix A - Trademark Registry: List of registered trademarks and intellectual property

12. Appendix B - Confidentiality Agreement: Detailed confidentiality terms and requirements

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 and Beverage

Retail

Education and Training

Healthcare Services

Hospitality

Automotive Services

Beauty and Wellness

Professional Services

Technology and Electronics

Fashion and Accessories

Entertainment and Recreation

Home Services

Relevant Teams

Legal

Business Development

Operations

Compliance

Finance

Brand Management

Training and Development

Quality Assurance

Commercial

Franchise Relations

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Head of Franchising

Legal Counsel

Franchise Development Manager

Business Development Director

Commercial Director

Operations Director

Compliance Officer

Brand Manager

Finance Director

Training Manager

Quality Assurance Manager

Franchise Relations Manager

Regional Development 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/M-DAG/PER/8/2019: Regulation on franchising implementation, including requirements for franchise registration certificate (STPW), local content requirements, and reporting obligations
Indonesian Civil Code (KUHPerdata): Basic contract law principles governing agreements, including formation, validity, and enforcement of contracts in Indonesia
Law No. 20 of 2016 on Marks and Geographical Indications: Regulates trademark protection, essential for franchise agreements as they typically involve licensing of trademarks and other intellectual property
Law No. 13 of 2003 on Employment: Labor law provisions affecting employment relationships within franchise operations
Law No. 40 of 2007 on Limited Liability Companies: Relevant for corporate structure requirements and business operations of franchise entities
Law No. 7 of 2014 on Trade: General trade law provisions affecting business operations and commercial relationships
Minister of Trade Regulation No. 53/M-DAG/PER/8/2012: Guidelines for franchise business development, including provisions for partnership and business development
Law No. 5 of 1999 on Competition: Anti-monopoly and fair competition regulations affecting franchise territory restrictions and market practices
Law No. 8 of 1999 on Consumer Protection: Consumer protection provisions that affect franchise operations and service delivery standards
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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