Franchise Businesses in Indonesia; Taking a Closer Look at the Franchise Model in Indonesia
The franchise model is a popular business model in Indonesia as it holds a number of advantages compared to starting a business from scratch. When walking inside a shopping mall or on the busy streets of Indonesian urban and suburban areas one can see various examples of the franchise model in action.
For example, the popular minimarkets (such as Indomaret and Alfamart) are part of the retail franchising model. Or, popular places to eat and drink (such as Boba Time, Kopi Kenangan and Sabana) are part of food and beverage franchises. And then there are the logistics franchise businesses (such as J&T Express, SiCepat and JNE Express) that have been mushrooming since the rise of the e-commerce industry in Indonesia. One last example is the gas station (like Pertamina) where one buys gasoline for his/ her vehicle. This too is part of a franchise business model.
Obviously, the big international brands are also available in Indonesia through the franchise model. For example, McDonald’s, Pizza Hut, Starbucks, 7-Eleven Inc., Early Learning Center, Domino Pizza, Circle K, Lawson, KFC, and The Body Shop. However, their licenses are typically much more expensive than the domestic brands.
Indonesia, being home to around 273 million people (including an expanding middle class, although the COVID-19 crisis was a serious, yet temporary, hiccup), has a huge consumer force, and therefore is a very attractive market; both for franchisors and franchisees (including foreign franchisors).
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