Royalty Fee Arrangement in Franchise Business and its Legal Implication in Indonesia
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Abstract
Royalty fee arrangement in the franchise business in Indonesia provide a clear legal basis to protect the rights of franchisors and franchisees. While the existing arrangements are sufficient to support the creation of legal certainty, challenges in the implementation of oversight and legal enforcement are still the main obstacles in realizing a fair balance between the two parties. This research aims to analyze the extent to which royalty fee arrangements can provide maximum protection for franchisees and prevent them from potential exploitation. Through a literature study approach and normative juridical analysis, this research finds that despite the existence of clear arrangements, oversight of the implementation of royalty fees in the field has not been optimal. Increased oversight and stricter enforcement of sanctions are needed so that the weaker party in the franchise agreement receives appropriate legal protection. These findings have important implications for strengthening the franchise regulatory system in Indonesia to make it fairer and more sustainable.
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