The Indonesian government has set new rules to limit the amount of outlets that a franchise holder can own in Indonesia to 250 in total. The government implements this rule to protect the country's small and medium enterprises. This new policy has far-reaching consequences for large fast-food companies such as Pizza Hut, KFC and Dunkin’ Brands Group Inc. They will have five years to adjust their businesses to the new policy.
The new rule applies to all food-mart franchisers and franchisees (including public companies). Franchise holders in Indonesia will only be allowed to operate 250 outlets in total. If it exceeds 250 then it must divest a partial stake in all outlets over 250. If the start-up capital is over IDR 10 billion (US $1 million), it must divest at least 40 percent of its ownership. Outlets requiring less than IDR 10 billion in start-up capital, will be obliged to divest 30 percent of its stake. There is, however, an exception to this new rule. If an outlet is opened in a remote area, such as Papua, it will not need to divest a partial stake.
Fast-food sales in Indonesia increased 15 percent to US $1.54 billion in 2011.