L

ocal food chains are maintaining a positive outlook for their businesses amid the plans of a handful of food franchises from neighboring countries to cash in on the Indonesian market ahead of the ASEAN Economic Community (AEC), which is slated to begin at the end of this year.

Indonesian food chains Kebab Baba Rafi, Es Teler 77 and Amazy are among local food franchisors that are giving positive signals for foreign franchises to enter the country, saying that competition was normal and that the open market would also help them to expand overseas.

The Philippines'€™ restaurant chain Jollibee Foods Corp. (JFC) and Malaysian retail conglomerate Texchem Resources Bhd. are among those confirmed to open restaurants '€” burger and Japanese food '€” in Indonesia.

'€œWe will face the competition fairly as we believe that it will also open more opportunities for us to show that local brands can compete with foreign brands,'€ said Kebab Baba Rafi owner Hendy Setiono.

Kebab Baba Rafi, which offers Indonesian-style Turkish kebabs, has been rapidly growing and it claimed to have an 88 percent kebab market share in the country in 2013.

Baba Rafi outlets had reached 1,200, 70 percent of which were franchises, Hendy told The Jakarta Post.

Hendy said that while the AEC would heighten competition in the country'€™s food industry, he was upbeat that it would also facilitate his firm to strengthen its grip overseas.

The AEC will boost the free movement of people, goods and services among ASEAN member countries.

Kebab Baba Rafi has 33 outlets in Malaysia and 20 outlets in the Philippines. It plans to expand further to Singapore, Brunei Darussalam and the Netherlands this year.

Local chains Es Teler 77 and Amazy also expect that the AEC will ease their expansion plans for a number of ASEAN countries.

Es Teler 77, named after its flagship tropical fruit drink, plans to expand its business to New Delhi, India, and Jeddah, Saudi Arabia.

The brand is aiming to develop its business in its existing markets, Singapore, Malaysia and Australia, as well as Indonesia.

Opening its first outlet in Indonesia in 2007, medium-scale local fried chicken franchise Amazy recently opened an outlet in Malaysia in January this year. It aims to have 100 outlets by 2022 in that country.

'€œWe are also in talks with potential partners in Brunei Darussalam and Malaysia,'€ said Yanti Melianty Isa, the owner of PT Magfood Amazy Internasional '€” franchisor of Amazy.

Amazy hoped the AEC would ease the firm'€™s plan to expand into those countries, she went on.

Yanti added that while she was upbeat that Amazy would survive amid tighter competition in the AEC, she expected that local administrations would cut red tape.

'€œAs a small-medium business, local administrations often give us no certainty on location permits,'€ she said.

Indonesian Food and Beverage Association (Gapmmi) chairman Adhi S. Lukman said the inflow of foreign franchises would likely affect the country'€™s food industry as the companies '€” both local and foreign '€” would grab the same market.

'€œHowever, what'€™s important is how our local companies keep innovating so that their products are still favorites domestically,'€ he said.