Analyzing the Licensing and Franchising Legislations as Means of Intellectual Property Protection in Indonesia

In Indonesia, franchising has become one of the most prominent business concepts. It greatly fosters economic market diversity in Indonesia. In this regard, it is also asserted that franchising plays a vital role in achieving competitive advantage through business development. Thus, the Indonesian government is encouraging local businesses to become effective franchisers, particularly in the context of indigenous products. Consequently, the primary objective of this study is to examine the licensing and franchising laws in Indonesia as a way of Intellectual Property Protection. This qualitative research focuses on the rising intellectual property rights (IPRs) associated with the franchising industry in Indonesia. The continued success of the franchising system in Indonesia has inspired more business owners to adopt this expansion strategy. This study employed a normative legal procedure. This study revealed that the franchise system's intellectual property rights constitute its core notion. A unique is more effective in achieving competitive advantage. This study emphasized the significance of legal protection for intellectual property rights in franchise agreements. The initial franchise regulatory scheme in Indonesia was introduced in 1997, which helped provide legal assurance and protection for national franchises. The "Indonesian Government Regulation No. 16 of 1997 Concerning Franchise" defined a franchise as a contract between a franchisor and a franchisee. Eventually, this regulatory framework was broadened to include "Undang Undang (UU) No. 42 of 2007," which centered on the legitimacy of the franchise agreement. Hence, it aided in preserving the legal interests of both the franchisor and franchisee, thereby boosting their registration. This report also highlighted other challenges facing the franchising industry in Indonesia, such as excessive licensing fees and disputes between franchisees and franchisors. Thus, it has been suggested that an effective communication plan be devised to address these problems. In addition, this work offers several theoretical, practical, and policy-related consequences.