Buying a Franchise in Indonesia: Check STPW Certificates and Registration Obligations

A brochure claiming that ‘all legal requirements are met’ does not establish whether a franchise offer complies with registration obligations. Before buying, prospective franchisees should check the Franchise Registration Certificate (Surat Tanda Pendaftaran Waralaba, or STPW) held by the party offering the franchise, while also understanding their own obligations. In the franchise sector, these checks help distinguish genuine documentary evidence from marketing promises that cannot yet be verified.

1. Understand what an STPW proves

Government Regulation No. 35 of 2024 on Franchising provides the regulatory framework for franchising in Indonesia, replacing Government Regulation No. 42 of 2007. It requires franchisors, sub-franchisors, franchisees and sub-franchisees to hold an STPW as a business licence supporting their business activities.

This means registration is not solely a matter for the brand’s head office. Prospective buyers who will become franchisees must also prepare for their own registration. Do not accept an explanation that every outlet is automatically covered by the franchisor’s STPW without checking each party’s legal role.

An STPW is different from a Business Identification Number (Nomor Induk Berusaha, or NIB), a trade mark certificate or a specific operating licence. Each serves a separate purpose. An NIB does not replace an STPW, and an STPW does not replace other business requirements applicable to the outlet’s activities.

Nor does an STPW guarantee profitability, a suitable location or recovery of your investment. Use it to check registration compliance, not as a reason to skip commercial due diligence. A brand may meet administrative requirements yet still be unsuitable for your financial resources and management capabilities.

2. Check the documents held by the party making the offer

Ask for a complete, legible copy of the STPW, rather than just an image of a licensing logo in a presentation. Cross-check the information against the disclosure prospectus and draft agreement. The most useful checks cover:

• The name of the individual or business entity holding the STPW.
• Their status as a franchisor or sub-franchisor.
• The document number and the business information shown.
• Whether the holder is the party that will grant you the franchise rights.

If the offer comes from a sub-franchisor, do not stop at checking the main brand owner’s STPW. Ask for a written explanation of the offering party’s role and evidence of its own registration. Documents belonging to another company in the same corporate group do not automatically prove that the contracting party has met its obligations.

Verify the information using the official facilities available through Indonesia’s Online Single Submission (OSS) system, or confirm it with the relevant trade authority. If you cannot check the information independently, ask the franchisor to help you view the electronic documents and their status. Keep a record of the date of your checks and the responses received.

Treat ‘being processed’ as an application status, not proof that a certificate has been issued. Request evidence of submission and an explanation of any outstanding documents. Postpone your purchase decision until discrepancies or unclear statuses have been resolved with verifiable answers.

3. Plan your own registration as a franchisee

Franchisor and franchisee registrations rely on different documents: the offering prospectus for the franchisor and the franchise agreement for the franchisee. Do not therefore assume that a franchisee’s STPW must already be in place before the agreement forming the basis of the application exists.

Before signing, ask for an explanation of the OSS application process appropriate to your role and the rules in force when you apply. Confirm the requirements with the relevant authority, particularly if the arrangement involves an overseas franchisor or sub-franchise rights.

Draw up a simple checklist identifying each document, who must supply it, the deadline for delivery and who is responsible for submitting the application. Separate the documents you must prepare from those the franchisor must provide. This helps prevent all responsibility for delays being placed on the prospective franchisee.

If a consultant or head office helps with the process, make sure you still receive copies of the application, requests for corrections and issued documents. Avoid dependence on an intermediary’s personal account. Control of the business account and licensing records should remain with the party entitled to access them.

4. Set out administrative responsibilities in the contract

A promise to ‘help with all licences’ is too vague. Ask for the contract to specify whether that help includes preparing documents, uploading the application, responding to requests for corrections or merely providing guidance. Assistance with the process does not remove the legal obligations of the party required to hold an STPW.

Also agree who will pay any fees for application-handling services. Distinguish third-party service fees from official charges; any claimed official charge should have a verifiable basis. Do not agree to a bundled amount without a breakdown of the work and supporting evidence of expenditure.

As a contractual safeguard, negotiate an obligation for the franchisor to remedy deficiencies in documents for which it is responsible. Also specify how the parties will proceed if the franchisee’s application cannot move forward because of problems with the franchisor’s documents. Any right to suspend particular contractual obligations or obtain a refund must be expressly set out, rather than assumed to apply automatically.

Once the STPW has been issued, keep it with the agreement and supporting documents. If business details change, check through OSS or the relevant authority whether an update is required.

Practical takeaway: before buying, verify the franchisor’s STPW, map out your own registration process and record the division of responsibilities in writing. Do not confuse a promise of assistance with evidence that the obligations have been met.