The Ministry of Trade: SINGLE OWNERSHIP NOT PERMITTED IN FRANCHISE BUSINESS

            The Ministry of Trade denied the prediction of mass expansion of foreign franchise including those from South Korea and America. The Ministry of Trade plead the public and the public and the mass media to differentiate franchise and non franchise restaurants, such as the expansion plan of the Lotteria fastfood from South Korea which had 15 outlets; the Ministry did not seen them as franchise business. “Some of them were not franchise, but the mass media regarded them as franchise. Comprehension is the most important especially ownership, it is not single proprietor” the Director General of Domestic Trading of the Ministry of Trade Gunaryo told Business News (9/3).

         The Directorate of Domestic Trading had mad discussions with the Commission of Business Competition Controlling (KPPU) on foreign franchise wich tend to go octopus lately. KPPU saw that the essential thing was that any business activity must refrain from monopoly. Because such was a violation to Law No. 5/1999. “If the Korean Lotteria were not owned by a single person, (which means they are owned by many) then by all means buy the franchise”.

            All franchise holders were expected to expand not just in Jabodetabek (Jakarta, Bogor, Depok, Tangerang, Bekasi) but also in other regions. Franchise owners were advised to engage regional companies such would help distribution of the logistics system, because one of the factors that accounted for price increase was uneven distribution “We also strive to make sure that retailers of franchise business were not against Law UU (No. 5/1999) or Law of Consumers Protection”.

       The Directorate of Domestic Trading also denied expansion plan of other franchise from America. The Directorate of PDN had not received any application for franchise operation. The Ministry of Trade claimed to be moderate, in the sense that they were not restricting but also not liberating practices of unhealthy competition of monopoly. “We are not being protective, but we manage. The same applies to branding. Indonesian businesspeople may use foreign branding like Gunaryo Fans, no problem”.

        The type of franchise was also adjusted to the characteristics of the location where they operated. For example culinary franchise it turned it turned out to be very suitable for Bali. Some franchise were not only operated by business groups but also individuals. “Customers foreign or local, swarm in continuously, which enliven Bali for 24 hours”.

       Meanwhile the Ministry of Trade Gita Wirjawan stated that the plan to increase oil price would have no negative impact on the people in many regions. Such could be anticipated, especially those relate to the domain of business. Evwn if a situation in a certain area was uncertain it was because of logistic problem, not because of price increase of oil. The Ministry of Trade would monitor stock for logistics for all regions. “except rice because as price of oil increased, prices would be corrected at the transportation sector” Gita Wiryawan disclosed to business News (9/3).

         The Ministry of Trade stated that every function of the Ministry would be empowered, including the Indonesia Trade Promotion Center (ITPC). The Ministry of Trade would evaluate if there was any ITPC which did not function to the maximum. ITPC represented the Ministry of Trade abroad beside other representative offices abroad. The Trade Attache or Ambassador of the World Trade Organization (WTO) had been doing their best. “Still we would take note of any input from the public, including from the media. So far, Trade Representatives abroad had been actually representing the Central Government. The Trade Ambassador whom I met in Hong Kong, was performing well”. 

Business News - March 14, 2012