LAW ON RESTRICTION OF FRANCHISE RESTO REGULATE THERIR CAPITAL INVESTMENT

Besides increasing portion of ownership whereby small and medium business could do busi­ness through franchising, it turned out that the rules on restriction of franchise ownership of one brand would soon also regulate the size of capital. Besides, according to the Secretary General of the Ministry of Trade Gunaryo who on Monday (21/1) replaced his predecessor Ardiansyah Parman, there were oth­er stipulations in the restaurant franchise regulation which was supposed to be signed by the Ministry of Trade Gita Wirjawan by end of this month, i.e., on licensing would not be regulated in the Permendag regulation.

“Previously the Ministry of Trade was still hesitant about regulating open restaurants like Padang restaurants, we regard that they are holding license of the original owner, but what we regulate here is only those whose business is in the form of franchise” this was disclosed by Gunaryo who, before holding the position of the Secretary General of the Ministry of Trade was the Director General of Domestic Trading of the Ministry of Trade.

In the regulation which essentially ask “our entrepreneur friends” to involve more UKM in res­taurant franchising we were still negotiating the maximum limit of sole ownership of restaurant that could be owned by one person. Meaning, beyond that threshold franchisors must delegate their business to other parties, who were hopefully be UKM.

“From that point we would allow greater percentage, but the portion would be given more to mas­ter franchisor or franchisee”.

“We are expecting that by this week discus­sions over threshold would be accomplished, and the figure would be announced by the Minister of Trade Gita Wirjawan. In case of some capital or investment to be released, by the time someone decided to join a certain franchise system, it would also be announced by the Ministry of Trade. Because basically this was related to the interest and capability of investors to invest in that line of business.

Because if a certain franchise operator were forced to devastate money to another party it would be difficult to find a franchise with a certain stipulated amount of capital. For example candidate must have paid up capital of Rp 10 billion - certainly many people would think twice before willing to become franchi­see. But if the figure was Rp l billion, many people would be enthusiastic about joining the business” Gunaryo remarked.

The Regulation was expected to be signed by Minister Gita Wirjawan by end of this month, as meeting was to be held first this week, to discuss it with business people. The objective was that by the time the document was finalized and ready to be signed, there would be no rejections by the business circles. That was the reason why although Gunaryo had been appointed Secretary General he would in­tensively safeguard the process of Perrnendag legisla­tion. Meanwhile the Minister of Trade Gita Wirjawan after inaugurating some high officials of the first echelon at the Ministry of Trade stated only in the near future the definition of franchise ownership for restaurants to be owned by one person would be an­nounced.

Business News - January25,2013