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Letter Of Intent For Franchise Application Template for Indonesia

A Letter of Intent for Franchise Application is a preliminary document used in the Indonesian franchise industry that formally expresses a potential franchisee's interest in acquiring franchise rights from a franchisor. This document, governed by Indonesian franchise regulations including Government Regulation No. 42 of 2007 and Ministry of Trade Regulation No. 71 of 2019, serves as an initial step in the franchise acquisition process. While non-binding in nature (except for specific provisions like confidentiality), it outlines key aspects such as the proposed territory, basic business terms, and the applicant's qualifications, forming a foundation for subsequent detailed negotiations and the formal franchise agreement.

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What is a Letter Of Intent For Franchise Application?

A Letter of Intent For Franchise Application is a crucial preliminary document in the Indonesian franchise acquisition process, typically used when a potential franchisee wishes to formally express their interest in obtaining franchise rights from an established franchisor. The document serves as a structured way to initiate the franchise relationship while complying with Indonesian franchise regulations, particularly Government Regulation No. 42 of 2007 and related Ministry of Trade regulations. It includes essential information about the potential franchisee's qualifications, proposed territory, and basic business terms, while maintaining the typically non-binding nature of an LOI except for specific provisions such as confidentiality obligations. This document is particularly important in the Indonesian context as it often serves as a preliminary step before the mandatory franchise registration process with the Ministry of Trade and the preparation of the more detailed Franchise Agreement.

What sections should be included in a Letter Of Intent For Franchise Application?

1. Date and Address Block: Formal letter heading including date and complete address of both the potential franchisor and franchise applicant

2. Subject Line: Clear indication that this is a Letter of Intent for Franchise Application

3. Opening Statement: Formal introduction identifying the parties and expressing interest in the franchise opportunity

4. Business Background: Brief description of the applicant's business experience and qualifications

5. Expression of Intent: Clear statement of intention to apply for and obtain franchise rights

6. Proposed Territory: Specification of the intended geographic area for the franchise operation

7. Financial Capability: General statement about financial capacity to undertake the franchise

8. Confidentiality Statement: Commitment to maintain confidentiality of any information shared during the application process

9. Non-Binding Nature: Clear statement that the LOI is non-binding except for specific provisions like confidentiality

10. Timeline: Proposed timeline for completion of due diligence and franchise application process

11. Closing and Signatures: Formal closing, space for signatures of authorized representatives from both parties

What sections are optional to include in a Letter Of Intent For Franchise Application?

1. Preliminary Financial Terms: Basic outline of expected financial commitments, used when parties want to document initial financial discussions

2. Due Diligence Process: Outline of the proposed due diligence process, included when parties want to establish specific procedures

3. Exclusivity Period: Terms of any exclusivity in negotiations, used when the franchisor agrees to not negotiate with other parties for a specific period

4. Governing Law: Specific mention of applicable law, included when dealing with cross-border situations or when specifically requested

5. Dispute Resolution: Basic framework for handling disputes, included in more detailed LOIs or when specifically requested

What schedules should be included in a Letter Of Intent For Franchise Application?

1. Appendix A - Initial Business Plan Overview: High-level outline of the proposed business plan and implementation timeline

2. Appendix B - Required Documentation List: List of documents required for the full franchise application process

3. Appendix C - Financial Capability Evidence: Summary of financial statements or proof of financial capability (if agreed to be included)

4. Appendix D - Professional Background: Detailed CV or business experience of key personnel involved in the franchise application

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Document Type

Letter of Intent

Cost

Free to use

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