Kawan Lama Explains Its Switch from ACE Hardware to AZKO

Kawan Lama Group has explained the considerations behind its decision to end its ACE Hardware franchise agreement and develop its own brand, AZKO. Speaking at The Kasablanka Hall in Jakarta on Wednesday, 14 October 2026, Teresa highlighted the renewal review and new requirements from the brand owner as key factors in the decision.

Renewal requirements influenced the decision

According to a Kompas.com report published on 15 October 2026, Teresa said the decision not to renew the franchise agreement had not been easy. The company had long operated its retail business under a widely recognised brand, so the change affected its established business identity.

She explained that the company had been considering renewing the agreement for a second term. At that stage, the franchisor introduced several new requirements that would have obliged the company to make various changes. Those requirements formed part of its assessment of whether to continue the business relationship.

“The decision not to continue the franchise agreement was not an easy one. At the time, the company was considering renewing the agreement for a second term. However, the franchisor had introduced several new requirements that would have required the company to make various changes,” Teresa said.

Her comments place Kawan Lama’s decision in the context of a contract review and its plans for developing the business. The explanation focuses not simply on a name change, but on the choice the company made after weighing up whether to continue working with the brand owner.

Choosing an independent identity through AZKO

Following that review, Kawan Lama chose to establish its own identity through AZKO. It opted to continue the business under a brand it would build and develop itself, rather than renew the ACE Hardware franchise agreement.

“After considering these factors, the company ultimately decided to develop its own identity through AZKO,” Teresa said.

“This is part of the company’s efforts to continue the business under a brand it has built and developed itself,” she added.

These statements clarify the company’s stated objective: developing an identity of its own. The change marks a significant transition for a business that previously operated under a franchise brand familiar to consumers.

However, choosing to build an independent brand should not in itself be taken as a measure of business success. Teresa’s explanation focuses on the reasoning behind the decision and the direction of the brand, rather than a comparison of business results under ACE Hardware and AZKO. The reasons for the switch therefore need to be distinguished from any assessment of performance since the change.

Lessons from the renewal process

For Indonesia’s franchise community, Kawan Lama’s experience illustrates how renewal can be an important point for reassessment. Even a long-standing relationship needs to be reviewed when new requirements affect how a company will continue operating its business.

In this case, Teresa specifically cited the obligation to make various changes as a factor in the company’s deliberations. This highlights the importance of treating renewal as a business decision in its own right, rather than merely an administrative extension of the previous agreement.

As a precaution, businesses facing a similar situation can map out the differences between their existing terms and the new offer. A review can focus on changes to obligations, readiness to implement them and alignment with long-term plans. These are factors to assess, not grounds for concluding that every contract change should lead to the end of a relationship.

Kawan Lama’s choice does not mean that building an independent brand is always preferable to retaining a franchise. The decision Teresa described arose from that company’s particular considerations. Other businesses need to assess their own agreements, rather than assume that one company’s approach is a model they should follow.

Separating brand decisions from business readiness

The transition from ACE Hardware to AZKO brings together two questions: whether to continue the franchise relationship, and which identity to use to carry the business forward. In Teresa’s account, the company’s answer was to end the franchise arrangement and develop its own identity.

For prospective and existing franchisees, both questions are best considered before renewal falls due. A contract review helps clarify obligations, while an assessment of the business’s direction helps determine whether the relationship still fits the company’s objectives. Neither needs to wait until a decision to change brands is on the table.

The practical takeaway is to use the renewal period to reassess all the terms and the business’s readiness to meet them. Kawan Lama’s experience reminds the franchise community that continuing a relationship should be a considered decision, not one based solely on how long a brand has been used.