WARALABA BUSINESS

1. FRANCHISE AND BRAND LICENSE
Eddy Purnomo
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2. UNDERSTANDING
Meaning of the word
The term Franchise comes from the French Francer which
means free from slavery, while in English it means to Free or
free. But now the word has another meaning.
Franchise is buying someone else's business package, where
we will get an outlet to sell, a complete package of business
equipment, raw materials for the first month, procedures in
the guidebook, consulting rights, to the franchise seller, and
license to use the business trademark (Eka Darma Pranoto,
2010)
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3. DEFINITION OF FRANCHISE
Definition
An engagement where one party is given the right to utilize
Intellectual Property Rights (IPR) or meetings of the
characteristics of the business owned by the other party in
exchange based on the conditions set by the other party in
the context of providing and or selling goods and services
(Sony Sumarsono, 2009)
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4. DEFINITION OF FRANCHISE
 Franchising is organized based on a written agreement
between the franchisor and the franchisee, which is made in
Indonesian and applicable Indonesian law
 Franchise is an engagement born from an agreement
between the franchisor and the franchisee;

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5. LEGAL BASIS OF
FRANCHISING
 PP No. 42 tahun 2007 tentang Waralaba
 Kepmen Perindustrian dan Perdagangan RI
No.259/MPP/KEP/7/1997 tanggal 30 Juli 1997
 Undang Undang no 14 tahun 2001tentang Hak Paten
 Undang Undang no. 15
 tahun 2001 tentang Merek
 Undang Undang no 30
 tahun 2000 tentang Rahasia Dagang
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6. FRANCHISE
CHARACTERISTICS
1. Frenchisor allows the frenchisee to use the trademark,
system, form of management of the franchisor based
on exsclusive rights
2. The permission to use is granted for a certain period of
time
3. This franchise agreement is only for certain regions
4. For granting permission for the 3 things above, the
frenchisee must pay to the franchisor a number of fees
and / or royalties
5. All costs for the performance of this agreement shall
be borne by Frenchisee.
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7. CRETERIA
FRANCHISE
• Franchise = Marketing concept and expansion
strategy that develops into a superior business
concept. Must meet the following criteria:
• have business characteristics;
• proven to be profitable;
• have standards for services and goods and / or
services offered that are made in writing;
• easy to teach and apply;
• the presence of ongoing support; and
• Registered Intellectual Property Rights.
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8. FORM OF FRANCHISE
Franchise forms:
Product and Trade Franchise: The franchisor licenses
franchisees to sell the franchisor's products, such as
car dealerships and gas stations;
Business Franchise Format: The franchisor provides the
entire business concept which includes marketing
strategies, guidelines and standards for operating
technical assistance, training to franchisees, for
example, fast food restaurants.
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9. TYPES OF FRANCHISES
 Overseas franchises, tend to be preferred
because the system is clearer, the brand
has been accepted in various countries,
and is felt to be more prestigious
 Domestic franchises, investment options
for people who want to quickly become
entrepreneurs but do not have the
knowledge, are enough to start and
continue this business provided by the
franchisor
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10. TYPES OF FRANCHISES
 Franchise with a business format, the
franchisor gives the right (license) to the
franchisee to sell products / services using
the brand, the identity of the system
owned by the franchisor
 Product and trademark franchise, granting
management rights and permits from the
franchisor to franchisees to sell products
using trademarks in the form of agencies,
distributors, or sales licenses
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11. BUSINESS FORMAT
FRANCHISING
 Granting the right to sell products / services using
the brand, the identity of the system owned by the
franchisor
 The franchisor trains franchisees in marketing,
sales, stock management, accounting, personnel,
maintenance, business development and all
aspects related to the management of the
business
 Also provided support for business continuity in
the form of business consulting, internal audits,
centralized purchases to get the best price,
product development and advertising.
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12. ADVANTAGES OF
FRANCHISING
Low failure rate
Have business assistance
Have 'power'
Provides benefits
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13. DEFICIENCY OF FRANCHISING
 Existence of rules and guidelines
 There are ongoing costs
 Discontinuing ongoing support
 Need to prepare a large enough capital
 Has risks
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14. FRANCHISING IS NOT A
PARTNERSHIP
• Partnerships share mutual advantages and disadvantages in
the same business.
• Franchising = The Franchisor and Franchisee own their
respective businesses where both profits and losses of the
business are borne by each.
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15. UNDERSTANDING LICENCI
 Granting permission to produce certain products or
services that have previously been patented by their
creators.
 Another definition of license is the granting of permission
to utilize intellectual property rights (IPR) that can be
granted by the licensor to the permit recipient.
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16. PURPOSE OF LICENCI
The purpose of the License is so that the licensee can conduct
business or business using IPR that has been licensed.
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17. LEGAL BASIS OF LICENCE
 PP No. 36 tahun 2018 tentang Pencatatan Perjanjian Lisensi
Kekayaan Intelektual
 Pasal 1 angka 4 Undang-Undang Nomor 28 Tahun 2014 tentang
Hak Cipta (“UU Hak Cipta”)
 Pasal 1 angka 2 Undang-Undang Nomor 28 Tahun 2014 tentang
Hak Cipta (“UU Hak Cipta”)
 Pasal 1 angka 1 Undang-Undang Nomor 28 Tahun 2014 tentang
Hak Cipta (“UU Hak Cipta”)
 Pasal 16 ayat (2) UU Hak Cipta
 Pasal 1 angka 20 UU Hak Cipta
 (Pasal 80 ayat (2) UU Hak Cipta)
 (Pasal 80 ayat (3) UU Hak Cipta).
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18. CHARACTERISTIC
LICENCE
There are two important terms that are often heard in
licensing:
Licensor is the party that owns the copyright and gives
permission to the licensee.
Licensee is the party that receives the license granted by
Licensor.
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19. LICENCE CHARACTERISTICS
1.A creator (lisencor) is one or several people who
individually or jointly produce a creation that is
distinctive and personal.
2.Creation is any work of creation in the fields of science,
art, and literature produced by inspiration, ability,
thought, imagination, dexterity, skill, or expertise
expressed in tangible form.
3.The copyright holder (Lisencee) is the creator as the
copyright owner, the party who legally receives the right
from the creator, or another party who further receives
the rights from the party who legally receives the right.
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20. ADVANTAGES OF
LICENCE
 Licensor holds ownership rights to a brand, product or service
legally.
 The existence of a license will increase the Licensor's sense of
responsibility.
 Licensor receives royalty payments for the use of the marks by the
License.
 Legal use of the mark will prevent the License from lawsuits
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21. DEFICIENCY OF
LICENCE
 Licensor gives away its brand, meaning they will relinquish control
of the brand to the licensee.
 Licensor is obliged to enforce the rights to the brand name
 The license does not have free and varied production rights when
entering into a business license agreement with Licensor.
 Licenses may be burdened to maintain Licensor's brand
reputation.
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22. FRANCHISE AND LICENSE
DIFFERENCES
• The difference between a franchise and a license is the principle
of each concept. According to Utomo Njoto, Franchising expert,
there are 6 (six) things to be able to distinguish the two
• From the aspect of the franchise brand, it uses the franchisor's
brand and the license uses the licensor's brand.
• In terms of focus.
• Marketing communication
• Related IPR documents
• Related to regulations.
• Sanctions issues
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23. FRANCHISE AND LICENSE
DIFFERENCES
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Basis Licensing Franchising
Business Model Deals with products and goods. Deals with providing services.
Ownership
Ownership of the outcome is with the licensee. He only buys the
right to use the licensor’s certain patented / original product for a
royalty.
Ownership of the business is with the franchisee. They purchase the right to
run the same company on behalf of the franchisor for fees.
Legal Regulations
The standard agreement is governed by contract law between the
parties.
Stricter compliance requirements are governed by companies and other
federal laws of international business (if dealing with a party outside the
country).
Advantages
Licensor gets vertical integration without heavy capital investment
and enhances its brand value. Licensee receives access to the
market by relying on a strong brand and eliminating competition.
Franchisor gets access to the geographically diversified marketplace without
compromising on brand value. In addition, the franchisee gets continual
support from the franchisor to extend an already successful business.
Disadvantages
The licensor does not control the ultimate use of its intellectual
property rights.
The heavy initial investment by the franchisee to meet the franchisor’s quality
standards. In addition, the degree of autonomy is very less for the franchisee
in the operational matters of the business.

24. WHICH IS BETTER
Which form is best usually depends on the nature of the
product/service in question, the risk appetite of the
licensee/franchisee, the presence of competition in the market, and
the potential to enter and retain the market by new players, the
amount of investment involved, etc.
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25. COMPANIES
FRANCHISE AND LICENSE
• McDonald’s
• McDonald's started its fast food restaurants in California in 1955.
McDonald's itself entered Indonesia for the first time in 1991, namely
in Sarinah, Thamrin. Now, McDonald's has thousands of restaurants
in more than 100 countries including Indonesia. The flagship product
of McDonald's itself isBigmac.
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26. COMPANIES
FRANCHISE AND LICENSE
• Domino's
• Domino's is known for handtossed products that are made manually
by hand, rather than from machines. On August 22, 2008, Domino's
Pizza opened its first store in Pondok Indah and now has more than
120 stores in 8 cities spread across Indonesia.
•
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27. COMPANIES
FRANCHISE AND LICENSE
• Ace Hardware
• The Company was established in 1955 focusing on household and
lifestyle appliances.
• PT Kawan Lama Sejahtera already has a subsidiary, PT ACE Hardware
Indonesia Tbk, which is the licensee or master franchise of the ACE
Hardware brand in Indonesia appointed by ACE Hardware
Corporation.
•
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28. CONCLUSION
Overall, both forms are quite safe and legitimate modes of business
as they are built on a strong foundation of brand value attached to
the product. In addition, it can be used as a launching pad by any
potential new entrant to access an already saturated market.
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29. DAFTAR PUSTAKA
• https://www.jurnal.id/id/blog/keuntungan-dan-kekurangan-bisnis-
waralaba/#Keuntungan_Menjalankan_Bisnis_Waralaba
• https://tugashukumku.blogspot.com/2018/10/perbedaan-lisensi-
dan-waralaba.html
• https://www.dosenpendidikan.co.id/lisensi/
• https://legistra.id/berita/perbedaan-lisensi-dan-franchise
• https://www.mbizmarket.co.id/news/mengenal-lisensi-dan-
perjanjian-lisensi-untuk-merek-dagang/
• https://www.wallstreetmojo.com/licensing-vs-franchising/
• https://entrepreneur.bisnis.com/read/20211108/263/1463378/top-
10-franchise-global-didominasi-industri-makanan-dari-
mcdonalds-hingga-pizza-hut
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