FRANCHISE

Franchise Development in Indonesia

Franchise business in Indonesia began to bloom in about the 1970s with the emergence of fast-food restaurant restaurant (fast food) such as Kentucky Fried chiken and Pizza Hut. By 1992 the number of franchise companies in Indonesia reached 35 companies, 6 of whom are local franchise company and the remainder (29) are foreign franchises. The development of foreign waralab. The development of foreign franchises from year to year, growing by 710% from 1992 until 1997, while the local franchise development only increased by 400% (from a number of 6 companies to 30 companies.)

However since the monetary crisis in 1997, the number of foreign franchise companies decreased growth of -9.78% from 1997 to 2001. this is because the decline in the rupiah so that the cost for the franchise fee and royalty fees and costs of raw materials, equipment and supplies in the dollar be rising. They affect the calculation of the selling price of products or services in Indonesia. Instead of local franchises have increased an average growth of 30%. In 2001 the number of foreign franchises to grow again by 8.5% while the local franchise increased 7.69% from 2000.

The advantages of buying a franchise include the following:

1. Be your own boss (at least to a point) as appose to working for an employer. Franchises offer you the chance to go into business yourself even if you are lacking in capital or business experience.
2. Get a head start. Compared to normal start-up companies, franchises provide a head start to the business owner by providing support on an as-needed basis. A common saying in the franchise industry is "You're in business for yourself, but not by yourself.
3. Gain additional training and assistance. Franchises have a vested interest in your Success. As a result, many offer extended training and assistance with business set-up, personnel training, site selection, lease negotiation, collective buying power, and advertising.
4. Profit from name recognition. One of the most difficult things to do when starting a business is to develop a recognisable presence with your customers. This usually only happens over time. Franchises eliminate this hurdle by developing an image in the marketplace. This is important because it saves you both time and money. However, be certain that the image is a favorable one before you invest.
   

Although there are definite advantages to franchises, like everything else, there are also disadvantages. Some of the cons of buying a franchise include the following:

1. You must play by the rules. If you are buying a franchise because you can't stand working for someone else, you may want to think twice. When you buy a franchise, you are not free to do as you please. In many cases, franchisors require you to play by their rules. These rules may pertain to such things as the products you are allowed or must carry, reporting procedures, dress codes, hours, and, overall, how you run your business.
2. Nothing is ever free. In addition to the initial franchise fee you will have to pay, most franchisors require that you pay a percentage of your monthly gross sales back to the parent company. Many also require that you buy your products directly from the parent company (which may prohibit you from getting the best prices).
3. There are no right or wrong choices. Its all about weighing up your options and choosing the one you feel most comfortable with. For some people, giving up just a little control is completely out of the question. Others may like the fact that someone will be lending a helping hand (even if it does cost a little).
   

Franchise Types :

1. Franchise in automobile and motorcycle industry.
2. Franchise that offers the names, images, methods of doing business ie: Mc. Donald, KFC,or Dunkin 'Donuts.
3. Franchise in a service business such as real state, etc.