Franchise businesses grow by 15% this year, association says<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
Franchise businesses in the country have grown by 15 percent
\nthis year and are expected to further thrive, considering the
\nfact that Indonesia's economy still mostly relies on domestic
\nconsumption, the Indonesian Franchise Association (AFI) said.<\/p>\n
Data from the association shows that there are now 270 foreign
\ncompanies -- from restaurants, supermarkets and dry cleaners to
\neducational institutions -- which have franchised their
\nbusinesses in Indonesia.<\/p>\n
\"There are also 120 local firms which have the potential for
\nfranchising, though perhaps only some 30 percent would be able to
\ndo so,\" AFI chairman Anang Sukandar said on Monday.<\/p>\n
Last year, there were 239 foreign companies and 49 local firms
\nthat franchised their businesses here.<\/p>\n
Franchising is a business concept in which a company -- the
\nfranchiser -- gives its know-how and license to another -- the
\nfranchisee -- to sell its products or services under a royalty
\nscheme.<\/p>\n
It is considered mutually beneficial as a franchiser can
\nexpand its business without having to raise its own capital,
\nwhile a franchisee can jump-start its own business without the
\nneed to establish a brand name first in the consumers' mind.<\/p>\n
Anang further said that franchise businesses could also play
\nan important role in the government's efforts to boost the
\neconomy and create more jobs for the unemployed.<\/p>\n
Citing data from the International Franchise Association,
\nAnang said that some 1,000 franchise companies in the United
\nStates generate US$1.15 trillion in revenue each year, or 50
\npercent of the total annual revenue of the country's retail
\nsector. They have also created 14 million new jobs.<\/p>\n
Anang was unable to reveal how much revenue Indonesia's
\nfranchise businesses generate, but mentioned that it had created
\nat least 60,000 jobs over the past year.<\/p>\n
\"The franchise businesses have some 3,400 outlets, each
\nemploying at between 20 to 25 people,\" he said.<\/p>\n
Anang however said that the government would need to give more
\nsupport to the franchise businesses, as has been done in
\nMalaysia.<\/p>\n
The Malaysian government, Anang explained, had set up a five-
\nyear program in 2001, allocating a total of 100 million Malaysian
\nringgit (US$27 million) in funds to help boost franchise
\nbusinesses in the country.<\/p>\n
\"Loans of 100,000 ringgit are given to promising franchise
\nbusinesses, which would only have to pay 85 percent of the loans
\nback,\" he said.<\/p>\n
Acknowledging the government's cash-strapped condition, Anang
\nsuggested that it at least assist potential franchise businesses
\nwith management training and in obtaining low-interest credits
\nfrom banks.<\/p>\n
\"It could also help by exempting them from revenue and value-
\nadded taxes for five years, which is the normal time for a
\ncompany to prepare to franchise its business,\" he said.<\/p>\n
Elsewhere, Anang said the association would hold a three-day
\n\"Franchise and Business Opportunity Exhibition\" on Nov. 24 at the
\nJakarta Convention Center.<\/p>\n
The exhibition will showcase 100 companies -- local as well as
\nfrom Singapore, Malaysia, Germany and the U.S. -- offering
\nfranchise opportunities with starting capitals of Rp 50 million
\n($5,555) and higher.<\/p>\n
The exhibition will also present a \"franchise clinic\" where
\nwould-be franchisees can consult international franchise experts.<\/p>\n
\"We hope it will be a perfect event for franchisers and
\nfranchisees to meet and discuss appropriate business
\nopportunities,\" Anang said.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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