Jakarta - Franchise business actors are required to have a Franchise Registration Certificate (STPW). If a business actor does not have an STPW, then the business cannot be called a franchise.
This was conveyed by Director of Business Development for Distribution Actors Septo Soepriyatno in response to the many mentions of company names with the term franchise even though they do not have STPW.
"The mention of a company as a franchise is regulated in Government Regulation Number 42 of 2007 concerning Franchising and Minister of Trade Regulation Number 71 of 2019 concerning the Implementation of Franchising. Franchise companies are required to have STWP. If there is no STWP, then the company is not a franchise," said Septo.
Government Regulation No. 42 of 2007 Article 10 paragraph 1 states, "Franchisors must register the Franchise Offering Prospectus before making a Franchise Agreement with the Franchisee".
Meanwhile, Minister of Trade Regulation No. 71/2019 Article 10 states, "Franchisors, Advanced Franchisors, Franchisees, and Advanced Franchisees are required to have STPW".
Septo also said, Permendag 71/2019 Article 3 states, "Individuals or business entities are prohibited from using the term and/or name of the franchise for their business name and/or activities, if they do not meet the franchise criteria".
The franchise criteria include having business characteristics, proven to have provided benefits, having standards for services and goods and/or services offered that are made in writing, easy to teach and apply, continuous support, and registered Intellectual Property Rights (IPR).
Septo also revealed that if an individual or business entity violates the provisions in MOT 71/2019 Article 3, administrative sanctions will be imposed in the form of recommendations for revocation of business licenses and/or operational/commercial licenses to the issuing official in accordance with the provisions of laws and regulations. This is regulated in MOT 71/2019 Article 32.
"For this reason, the mention of a franchise business must fulfill these provisions and cannot be used for companies that do not have STPW," Septo concluded.