The Franchise Contract serves as the foundational document for establishing and operating a franchise business in Indonesia. It is essential for businesses looking to expand through the franchise model while ensuring compliance with Indonesian regulations, particularly Government Regulation No. 42/2007 and related Ministry of Trade regulations. This document is used when a business owner (franchisor) grants rights to another party (franchisee) to use their business system, intellectual property, and brand in exchange for fees and compliance with operational standards. The agreement must address mandatory provisions required by Indonesian law, including local content requirements, intellectual property rights, technical assistance, and territory restrictions. It's particularly important for international franchisors entering the Indonesian market, as it must balance international franchise standards with local legal requirements and business practices.
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1. Parties: Identification of the franchisor and franchisee with complete legal details
2. Background: Description of the franchise business, brand history, and purpose of the agreement
3. Definitions: Definitions of key terms used throughout the agreement
4. Grant of Franchise: Specific rights granted to the franchisee, including territory and exclusivity provisions
5. Term and Renewal: Duration of the franchise agreement and conditions for renewal
6. Fees and Payments: Initial franchise fee, ongoing royalties, advertising contributions, and payment terms
7. Franchisor Obligations: Support, training, and assistance to be provided by the franchisor
8. Franchisee Obligations: Operating standards, compliance requirements, and performance obligations
9. Intellectual Property: Usage rights and restrictions regarding trademarks, trade secrets, and other IP
10. Training and Support: Initial and ongoing training requirements and support services
11. Quality Control: Standards, inspections, and compliance requirements
12. Marketing and Advertising: Marketing requirements, advertising fund contributions, and promotional activities
13. Records and Reporting: Required financial records, reports, and audit rights
14. Non-Competition and Confidentiality: Restrictions during and after the franchise term
15. Transfer and Assignment: Conditions for transfer of franchise rights
16. Termination: Grounds for termination and post-termination obligations
17. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law
18. General Provisions: Standard boilerplate clauses including notices, amendments, and severability
1. Property Lease Provisions: Required when the franchisor leases property to the franchisee or assists in property acquisition
2. Equipment Purchase: Needed when specific equipment must be purchased through the franchisor
3. Import Provisions: Required when the franchise involves import of products or materials
4. Halal Certification: Mandatory for food and beverage franchises requiring halal certification
5. Digital Operations: Required for franchises with significant online presence or digital operations
6. Multiple Unit Rights: Used when granting rights to develop multiple franchise units
7. Local Adaptation: Specific provisions for adapting the franchise to local conditions and requirements
1. Operations Manual Table of Contents: List of contents of the confidential operations manual
2. Approved Products and Services: Detailed list of authorized products and services
3. Territory Map and Description: Precise definition of the granted territory
4. Initial Fee and Royalty Schedule: Detailed breakdown of all fees and payment schedules
5. Equipment and Inventory Requirements: Specifications for required equipment and inventory levels
6. Training Program: Details of initial and ongoing training requirements
7. Approved Suppliers: List of approved suppliers and purchasing requirements
8. Brand Standards: Detailed specifications for use of trademarks and brand elements
9. Form of Confidentiality Agreement: Standard confidentiality agreement for employees
10. Financial Reporting Templates: Required formats for financial reporting
Relevant legal definitions
Clauses
Relevant Industries
Food and Beverage
Retail
Education and Training
Healthcare Services
Hospitality
Automotive Services
Personal Care and Beauty
Professional Services
Technology and Electronics
Fashion and Apparel
Entertainment and Recreation
Convenience Stores
Fitness and Wellness
Relevant Teams
Legal
Operations
Business Development
Compliance
Finance
Commercial
Brand Management
Training and Development
Quality Assurance
Marketing
Supply Chain
Relevant Roles
Chief Executive Officer
Franchise Development Manager
Legal Counsel
Operations Director
Business Development Manager
Compliance Officer
Brand Manager
Training Manager
Finance Director
Commercial Director
Franchise Operations Manager
Quality Assurance Manager
Territory Manager
Marketing Director
Supply Chain Manager
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