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Indonesia Targeted by Malaysian Franchises

13 Oct 2011 - The Indonesian market is clearly the target of a number of overseas companies. An estimated 100 Malaysian franchise companies has expressed readiness to expand its businesses to Indonesia by the end of the year.

"From Malaysia, 100 brands would like to start business in Indonesia. From Japan, there is the chicken satay. On average, the products in the franchise business are food," said Chairman of the Indonesian Franchise Association (AFI), Anang Sukandar, in Tangerang today.

Most of the Malaysian franchise companies, continued Anang, are in food business such as fried chicken and fast food restaurants.

AFI?s data shows that so far the franchise business in Indonesia has covered 40,000 franchises. Of that figure, as many as 6,000 are overseas franchises.

In fact, according to Anang, of 34,000 local franchises which have been operating in Indonesia, only 15 local companies managed to penetrate the global market.

"Less than 15 Indonesian franchises have expanded internationally, for example, Es Teler 77, Veneta, Minang Sari Bundo restaurant, Martha Tilaar Spa, Spa Muryati Sudibyo, Kebab Turki, Ayam Bakar Wong Solo," he said.

Anang said the sluggish franchise business in the country is because local franchise entrepreneurs still face constraints related to management issues, human resources and lack of government support to the franchise sector.

"Whenever there is a franchise exhibition. For instance, an expo in Malaysia is officiated by the Prime Minister while in Indonesia it is only opened by a director. This is regrettable," said Anang.