Author
Asst Prof Henny Marlyna
Organisation/Institution
Universitas Indonesia, Faculty of Law
Country
INDONESIA
Panel
Intellectual Property Rights
Title
Autopilot Franchise in Indonesia: A New Type of Franchise or Different Type of Business Model?
Abstract
In Indonesia, the activity of "Autopilot Franchise" has emerged as a new type of franchise. Many businesses offer this kind of franchise for various businesses, like fast food, pharmacies, education, and others. Typically, in a franchise, the franchisor grants the franchisee the right to operate a business using the franchisor’s trademark, trade name, business system, technical know-how, and standardized operational methods, in exchange for fees or royalties. Therefore, the franchisee will operate the business as the replication of a uniform business format owned by the franchisor. On the other hand, the franchisor will provide ongoing supervision and assistance from the franchisor. Since the business has been proven successful and gained profits, it would be easy for the franchisee to run the business. However, in the Autopilot Franchise, the franchisee's role is largely passive since they are only providing capital and receiving profits, while the franchisor does almost all operational and managerial duties. This new business model raises critical legal questions regarding the fundamental business concept of a franchise and its compliance with the fundamental franchise principles as regulated under the Government Regulation No. 35 of 2024 on Franchise. According to Article 4, a franchise should meet certain criteria, one of them is has a business system. The business system itself should be written and offered by the Franchisor to the Franchisee; and be easy to teach and apply. Implicitly, it requires the Franchisee to run the business. This article aims to critically evaluate whether Autopilot Franchise practices in Indonesia can be legally recognized as a new type of franchise based on the franchises business concept and the regulation. The analysis will also highlight potential risks associated with mislabeling such business models as franchise, including issues of franchisee protection and fair competition.
Biography
Henny Marlyna received her undergraduate degree, graduate degree, and doctor degree (in Law) from the Faculty of Law Universitas Indonesia. She also received her Master of Legal Institution (M.L.I.) from the University of Wisconsin Law School in 2004. She participated in the 10th WIPO-WTO Colloquium for Teachers of Intellectual Property in 2013. She has been a tutor for the WIPO-Harvard Course on Patent Law and Global Public Health [“PatentX”] since Batch 1. She is also one of the Scientific Committee for the IP & Innovation Researchers of Asia (IPIRA) Conference. Currently, she is a Senior Lecture at the Faculty of Law Universitas Indonesia, as well as a registered Intellectual Property Consultant and Lawyer in Indonesia. Since 2024 she has been appointed as one of the panelists for Indonesia Domain Name Dispute Settlement established by Indonesia Internet Domain Name Registry (PANDI). Henny has been teaching courses related to Law on Economic and Technology for both undergraduate and graduate programs such as Intellectual Property Law; Trademark and Geographical Indication; Intellectual Property Management and Valuation; Drafting on Intellectual Property Related Agreement; Consumer Protection Law; Cyber Law, and Privacy and Data Protection Law. Currently she is the Head of Intellectual Property Law Program - Master of Law Program as well as the Head of Intellectual Property Law and Consumer Protection Research Group at Faculty of Law Universitas Indonesia.
