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VOInews, Jakarta: The Ministry of Trade urges all franchise businesses to have a franchise registration certificate (STPW). Septo Soepriyatno, Director of Business Development for Distribution Actors at the Ministry of Trade, said that a business cannot be called a franchise if it does not have an STPW.

According to Septo, the designation of a company as a franchise is regulated in Government Regulation No. 42/2007 on Franchising and Minister of Trade Regulation No. 71/2019 on Franchising.

"Franchise companies are required to have STWP. If there is no STWP, the company is not a franchise," Septo said through a written statement in Jakarta, Tuesday.

Government Regulation No. 42/2007 Article 10 paragraph (1) states that franchisors must register a franchise offering prospectus before entering into a franchise agreement with the franchisee.

Meanwhile, Minister of Trade Regulation 71/2019 Article 10 states that franchisors, advanced franchisors, franchisees, and advanced franchisees are required to have STPW. MOT 71/2019 Article 3 states that individuals or business entities are prohibited from using franchise terms and/or names for their business names and/or activities, if they do not meet the franchise criteria.

Septo mentioned that the criteria for franchising include, among others, having business characteristics, proven to have provided benefits, having standards for services and goods and/or services offered that are made in writing, easy to teach and apply, continuous support, and registered intellectual property rights (IPR).

If an individual or business entity violates the provisions in Permendag 71/2019 Article 3, he said, administrative sanctions will be imposed in the form of recommendations for revocation of business licenses and/or operational/commercial licenses to the issuing official in accordance with the provisions of laws and regulations. This is regulated in Permendag 71/2019 Article 32.

"For this reason, the mention of a franchise business must fulfill these provisions and cannot be used for companies that do not have an STPW," Septo said.(ANTARA)