Comments: Franchising rule to slap limit on KFC, McDonald’s
The Jakarta Post
Feb. 16, p. 1
The Trade Ministry has introduced its latest regulation on restaurant franchising in a move to avert monopolies in the business and endorse greater participation from local players through third-party ownership.
The regulation limits a single master franchisee to owning a maximum of 250 outlets. If the franchisee wants to open more outlets it must invite a third party to join the ownership.
It is excellent step. However, it would be better to allow the original franchise holder no more than 150 outlets. For example, 250 brackets are too much and it doesn’t help proper wealth distribution.
Most of the branded food franchises are controlled by the same individual or group. This is not a fair business practice.
It’s better to fix franchise fees at a realistic level so others can enter and share the wealth on realistic terms.
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