Indonesian franchise business to grow 5 percent in 2019

Indonesian franchise business to grow 5 percent in 2019

Chairperson of the Association of Indonesian Franchise and License (Wali), Levita Ginting Supit. (ANTARA/Ade Irma Junida/sh)

Jakarta (ANTARA) - Indonesia's franchise business is expected to recover and grow by five percent in 2019 after the country completes its presidential election process, the Association of Indonesian Franchise and License (Wali) said.

Wali's Chairperson, Levita Ginting Supit, admitted that the political situation during the 2019 elections brought about significant impact to the business sector, as entrepreneurs have adopted a wait-and-see stance before they expand.

"We admit that due to the political year, all businesses have experienced a downturn. Those who have planned an expansion have to delay it until a new government is elected. Hopefully, this year, (the growth) can reach five percent," she elaborated.

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Supit said the franchise business has seen a three percent growth in 2018, and despite the uncertainty in the early period of 2019, the sector is expected to experience better growth.

"When we are done with politics, the business will grow. Foreign businesses will also enter the country," she continued.

Another factor that boosts the growth of franchise businesses is the development of basic infrastructure in some regions in Indonesia.

The lack of infrastructure has made businessmen reluctant to expand the franchise business in some regions, due to concerns with regard to long delivery and minimum security.

"Now, as the development of infrastructure has reached remote areas, businessmen are eager to open franchises in regions," she remarked.

The number of franchise businesses in Indonesia is predicted to reach 2 thousands, of which 60 percent are local franchises. Some 40 percent of the franchise business in Indonesia is in the food and beverage sector.

In 2018, the franchise business recorded a total turnover of Rp150 trillion (US$10.4 billion). Related news: Indonesia appointed honorary guest of World Franchise Expo