The business are optimistic that franchise business will still be growing. With the improvement of purchasing power of the middle class, franchise business becomes very potential. Thus, the franchise business operators support the ministry of Trade, which seeks to assist and encourage owners of business opportunity to able to implement a franchise system in running their business. Mentoring programs that have been implemented by the Ministry of Trade since 2012 has been proven successful in encouraging the growth of Indonesian local franchise.
Business operators who are members to the Chamber of Commerce and industry (KADIN Indonesia) expect the new government under the leadership of Jokowi-Jusuf Kalla to give attention to the development of local franchises. Amir Karamoy, Chairman of the Standing Committee on Franchising, Licensing and Partnership, of KADIN Indonesia, in Jakarta, on Wednesday (September 17) said that his party hoped that the new government will be able to encourage franchise development in the country and to continue support commitment that has been implemented by the current administration.
Amir said that there are there factors that make a franchise business promote economic activities in the country. First, like two sides of a coin, franchise business will encourage labor absorption and make a number of entrepreneurs to continue growing. Second, franchise business is included in the creative economy sector. This is because every franchise business starts as a business idea based on creativity and requires creativity and intelligence. Third, franchise system will encourage the growth and development of small and medium enterprises at local level.
Even though the development of franchise business in Indonesia is quite rapid, many people are still skeptical about its legal certainty. Currently, legal certainty to run a franchise business has been much better than before 1997. This can be seen from the issuance of a number of laws to protect franchise business operators.
In terms of the business sector, the growth of the franchise business in Indonesia is particularly evident in the food and fast food sectors. This development was mainly supported by the application of a cell or pyramid system. Through this system, business operators as the franchisee is required to development its business through a master franchise it receives by way of searching or appointing other franchise for further expansion. With this kind of mode, the network in the franchise business will continue to expand on an ongoing basis.
Meanwhile, the Indonesian franchise association (AFI) predicted that the number of national business that are able to develop franchise business is still relatively low this year or are less than five business. Chairman of AFI, Anang Sukandar, said that if there are any business that do business with the partnership system, it usually leads to a business opportunity rather than a pure franchise business.
Anang said that business who have obtained a Franchise Registration Certificate (STPW) can not necessarily be classified as a franchise business. The biggest issue, which is difficult to be met, is especially in terms of the uniqueness of the business. The uniqueness is not only based on the business time chat can be opened 24 hours, picking and delivery, or having a special taste. Therefore, it is not uniqueness, but only something which can be done by anyone.
Citing data from the Ministry of Trade in 2013, of 125 companies who have obtained STPW, franchisor in the country is only 2.4% or about 3 businesses, while foreign franchisor controls up to 60%. In terms of types of business, food/beverage business is the largest (49.6%), followed by retail (24%), and education (20.8%). These areas are still largely dominated by foreign branded products. (E)
Business News - September 19, 2014