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Jakarta Post

16 US chains plan to lock into RI growth

Amid the recent economic problems in the US and Europe, 16 US franchises, including Johnny Rockets, are looking for domestic partners to open and expand their businesses here and to tap into the growing Indonesian middle-class market

Esther Samboh (The Jakarta Post)
Jakarta
Sat, December 10, 2011 Published on Dec. 10, 2011 Published on 2011-12-10T13:19:09+07:00

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mid the recent economic problems in the US and Europe, 16 US franchises, including Johnny Rockets, are looking for domestic partners to open and expand their businesses here and to tap into the growing Indonesian middle-class market.

Most of the franchises (14 of them) are in the restaurant business — including Pretzelmaker, Great American Cookies, Cinnabon and Applebee’s, the US Embassy in Jakarta says in a statement released Friday.

The other two are nutritional supplements retailer The Vitamin Shoppe and leadership training services provider Crestcom.

“US restaurant franchise Johnny Rockets will sign a memorandum of understanding (MoU) with Sahid Group to bring the famous US restaurant brand to Indonesia, with the first location being in Bali,” the statement reads, without providing details on the terms of the franchise.

The MoU signing is part of the US Commercial Service Trade Mission’s two-day visit to Indonesia starting on Monday, with the 16 franchisors set to meet Indonesian business players to discuss potential deals.

To obtain a franchise license from Johnny Rockets — a US-based restaurant chain promoting an all-American menu, including traditional fast foods such as hamburgers, shakes and fries — would-be franchisees must have at least two years experience as restaurant owners or operators, a combined net worth of US$5 million, available liquid capital of at least $1.5 million, and must live in the area of the market to be developed, the company’s website says.

“The franchise fee is $49,000 per restaurant location [...] for the initial license to use the Johnny Rockets name and trademark, training, site assistance, and other pre-opening services to assist in starting,” it says, adding that an additional investment of between $587,500 and $826,000 must be paid for opening expenses, ranging from the building and furniture to smallwares and inventory items.

Sahid Group, a conglomerate with the hotel industry as its core business, was founded in 1953 by business tycoon Sukamdani Sahid Gitosardjono, with interests in media, textile, property and education.

In the third quarter of this year, the publicly listed PT Hotel Sahid Jaya International Tbk posted net profits of Rp 3.97 billion ($436,700), supported mainly by its food and beverages business.

Hotel Sahid corporate secretary Yana Aditya was not available for comment when contacted by The Jakarta Post on Friday.

Amir Karamoy, the chairman of the Indonesian committee for franchises and licenses (WALI), said he expected that the 16 US franchisors would not limit their partnerships to big businesses, but would also be interested in small local enterprises.

“After a master franchisee obtains its license from the franchisor, the franchisee should further provide sub-franchises to local investors. This way, the costs will be much lower for sub-franchisees,” he said over the phone.

“This also prevents big companies from monopolizing the market.”

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