Under the regulation, the franchisor and franchisee are required to involve a third investor with capital participation of 30-40 percent in a new outlet.Jakarta (Antara News) - The government has issued a new regulation on franchise system in foods and beverage sector.
Under the regulation, the franchisor and franchisee are required to involve a third investor with capital participation of 30-40 percent in a new outlet.
The regulation is effective on new outlets to be opened by franchisor and franchisee already having 250 outlets.
In a new outlet worth less that Rp10 billion, the third party is to have at least a 40 percent stake and in a new one worth more than Rp10 billion the participation capital of the new investor is at least 30 percent.
Trade Minister Gita Wirjawan said the new ministerial regulation No. 07/M-DAG/PER/2/2013 is expected to boost small and medium enterprises in foods and beverage sector.
"We want to create a more conducive climate for franchise system in this sector and to encourage new and creative investors to be able to compete globally," Gita said here on Friday.
The regulation has been prompted by relatively fast growth of business in franchise system in the country , while many other people having no access to the business, he said.
Through business under franchise system the government hopes to promote more local products by requiring them to sell good with higher local content, he said.
Business under franchise system needs to be regulated as many franchise outlets sell goods not in line with their license, he said.
He cited a franchise outlet licensed to operate as a small restaurant but in practice it sells sundries.
"We will take firm action against violation of the regulation to create a healthy business condition under franchise system," he said. (*)
Editor: Heru Purwanto
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