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Franchise business expected to slow this year
Business wanderers allowed: Visitors check out various booths at the Franchise & License Expo Indonesia 2013 at the Jakarta Convention Center (JCC) in Senayan, Jakarta, on Friday
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Business wanderers allowed: Visitors check out various booths at the Franchise & License Expo Indonesia 2013 at the Jakarta Convention Center (JCC) in Senayan, Jakarta, on Friday. The event, which runs until Sunday, accommodates franchise business players who want to promote their businesses. (JP/R.Berto Wedhatama) (JCC) in Senayan, Jakarta, on Friday. The event, which runs until Sunday, accommodates franchise business players who want to promote their businesses. (JP/R.Berto Wedhatama)
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span class="inline inline-none">Business wanderers allowed: Visitors check out various booths at the Franchise & License Expo Indonesia 2013 at the Jakarta Convention Center (JCC) in Senayan, Jakarta, on Friday. The event, which runs until Sunday, accommodates franchise business players who want to promote their businesses. (JP/R.Berto Wedhatama)
Indonesia's franchising business may slow down this year as many local franchisors had delayed expansion due to growing competition from foreign rivals, the Indonesia Franchising and Licensing Society (WALI) chairwoman, Levita Supit, said on Friday.
'We saw 15 percent growth last year. This year, we might only see 10 percent,' she said at the opening of the annual Franchise and License Expo Indonesia. WALI data shows that in 2012, 1,100 franchises were operating in Indonesia.
Growth in the franchising industry could slow this year as many franchising companies have delayed opening their outlets due to the entry of foreign franchising outlets, she said. According to her, at least 10 foreign franchises from the US, mostly engaged in the food and beverage industry, planned to open outlets in the country.
Levita said that local investors were waiting for the right time to open their franchises in order to avoid head-to-head competition with foreign rivals.
To anticipate the influx of more competition, she advised Indonesian franchisors to increase the quality of their management as well as their staff, while maintaining strict quality control.
She also urged the government to boost its efforts to 'empower' domestic franchise-holders and to help 'export' them to other countries, mainly ASEAN markets as the launch of the ASEAN Economic Community (AEC) was fast-
approaching.
Meanwhile, Amir Karamoy, chairman of the Indonesian Chamber of Commerce and Industry's (Kadin) national committee on franchising and licenses, echoed Levita's concerns, saying that the government should help in any way it could so that 'domestic franchisors are not sidelined in their own home market'.
Amid these concerns, the annual Franchise and License Expo Indonesia opened on Friday. More than 110 established and new franchises, mainly in sectors such as food and beverages, automotive, health and beauty and education, are represented at the event.
Organizers expected to attract at least 15,000 investors this year, and hoped that more international franchises would participate in next year's event, said Michelle Lim, the president director of Reed Panorama Exhibitions.
According to the organizers, 85 percent of the visitors to last year's expo were domestic franchisors and the other 15 percent came from overseas.
Separately, the Trade Ministry's director for small and medium trade and domestic products, Suharto, said he hoped Indonesia would see more transactions in the franchise business this year, despite the current economic climate.
'Even considering the economy, we still hope Indonesia will see an increase in transactions this year,' he said, without setting any targets.
He added that in 2012, transactions reached Rp 240 trillion, a 20 percent increase from 2011. (asw)
