Want an Indomaret Franchise? The Next Step is Illegal to Passed!
“Several documents on the legality of minimarket franchise businesses such as Indomaret are very important to be pocketed so that in the future they are safe from the threat of forcible closing stores.”
Who doesn’t know a mini market like Indomaret? Yes, this retail store is indeed a favorite for most Indonesians for a small way of shopping.
Launching tempo.co, the Ministry of Trade revealed in 2019 that people prefer to shop at minimarkets. The main reason is that Indomaret sells fast-moving consumer goods (FMCG) or daily necessities and is considered more practical.
If you are interested in having a minimarket business that has the potential to be immediately loved by consumers, you can start with a franchise in a minimarket that is well known to the public. One of them is Indomaret.
Indomaret is one of the companies that provide the largest franchise partners in Indonesia. In addition, Indomaret has also been included in the list of the Ministry of Trade as a Domestic Franchise.
However, several things are required to be known and prepared before applying for a franchise to Indomaret.
The premises of convenience stores
Please note that minimarkets are included in the convenience store category which is regulated in Government Regulation Number 29 of 2021 concerning the Implementation of the Trade Sector (PP 29/2021).
Furthermore, PP 29/2021 also states that minimarkets sell various kinds of consumer goods in retail, such as food products and other household products, such as building materials, furniture, electronics, and other special products. Therefore, the owner of this business is prohibited from selling goods wholesale/grocery.
Minimarkets are allocated for Cooperatives and Micro, Small, and Medium Enterprises (MSMEs), which are regulated in Presidential Regulation Number 49 of 2021 concerning Amendments to Presidential Regulation Number 10 of 2021 concerning the Investment Business Sector.
The amount of capital from the business category
MSMEs include those allocated for minimarket businesses. Therefore, prospective Indomaret franchisees shall at least prepare capital that is adjusted to the provisions of the MSME category.
The amount of MSME capital is regulated in Government Regulation Number 7 of 2021 concerning (PP 7/2021), including:
- Micro-enterprises shall prepare capital of up to a maximum of IDR 1 billion
- Subtle businesses, should prepare a capital of more than Rp. 1 billion up to a maximum of Rp. 5 billion
- Mediate-sized businesses shall prepare a capital of more than IDR 5 billion up to a maximum of IDR 10 billion
However, the list of capital amounts above does not include land and buildings for business premises (minimarkets).
Meanwhile, on the official Indomaret website, the estimated investment cost for new outlets for prospective franchisees is IDR 394 million. This estimate does not include building rent.
If you look at the estimated cost of the Indomaret provisions, the prospective franchisee business actors are included in the micro business category.
Building area provisions for minimarkets
Based on PP 29/2021, the maximum floor area for minimarket sales is not more than equal to 400 m2 (four hundred square meters).
Then, quoting from the official Indomaret website, the ideal area requirements for the construction of minimarkets that should be prepared by prospective franchisees are 120-200 m2 (one hundred and twenty to two hundred square meters).
Managing risk-based business licensing for minimarkets
Every business shall have legality obtained from a business license. Prospective minimarket franchisees can apply for a business license on the Online Single Submission (OSS System) system owned by the State Minister for Investment/the Capital Investment Coordinating Board.
Therefore, prospective franchisees are required to have an account with the OSS System. Terms of account registration can be seen on the https://oss.go.id page.
After successfully having an account on the OSS System, the prospective franchisee will be directed to take care of the issuance of the Business Identification Number (NIB).
NIB is an identity to carry out business activities that should be owned by every actor. This is regulated in Government Regulation Number 5 of 2021 concerning the Implementation of Risk-Based Approach Business Licensing (PP 5/2021).
During the NIB process, every business actor must also know the correct Standard Indonesian Business Field Classifications (KBLI) according to their business activities.
In the minimarket franchise business, the possible KBLI is indicated by code 47111 entitled “Retail Trade in Various Kinds of Goods, Mainly Food, Beverages, or Tobacco in Minimarkets/Supermarkets/Hypermarkets”.
The Indomaret minimarket franchise business is included in the micro business category. Information on KBLI 47111 shows that the micro business category has a low level of risk.
So, the business license that must be fulfilled by prospective Indomaret franchisees is NIB. This is under PP 5/2021 rules.
However, there are several other types of permits that must be pocketed by prospective Indomaret franchisees.
Meet the primary requirements for a minimarket business license
In addition to the NIB, prospective franchisees must meet the basic requirements for a business license.
The various primary requirements for business licensing to be supposed include (PP 5/2021):
- Suitability of space utilization activities
- Environmental approval
- Building approvals and certificates of building proper function
Basic requirements: suitability of space utilization activities
More detailed provisions regarding the suitability of space utilization activities for minimarkets must refer to the Regulation of the Minister of Trade Number 23 of 2021 concerning Guidelines for the Development, Arrangement, and Guidance of Shopping Centers and Supermarkets (Permendag 23/2021) and its amendments, which include:
- Regency/city spatial plan, or
- District/city spatial planning details
If the detailed district/city spatial planning plan is not yet available, the zoning of the location for the minimarket building will be based on the district/city regional spatial plan with the following considerations (Permendag 23/2021):
- Socio-economic conditions of the local community as well as the existence of people’s markets and MSMEs in the zone/area/local area
- Utilization of space to maintain a balance between the number of people’s markets with shopping centers and supermarkets
- The distance between shopping centers and supermarkets with traditional markets or traditional retail shops
- Technical standards for spatial planning for shopping centers and supermarkets are under the provisions of laws and regulations
Because the Indomaret franchise is included in the micro-enterprise, it is easy to only convey an independent statement of the suitability of space utilization activities in the OSS System.
Primary requirements: environmental approval
Furthermore, the environmental approval document for KBLI 47111 minimarket business activities is the Statement of Environmental Management and Monitoring Capability (SPPL), which could be managed through the OSS System.
Basic requirements: building approval and building function worthy certificate
The last basic requirement that must be bursting with is the building approval (PBG) and a Certificate of Building Proper Function (SLF) which can be managed through the Building Management Information System (SIMBG) which is managed by the Ministry of Public Works and Housing (PUPR).
However, based on the information from the Ministry of Trade module entitled “Supermarket Arrangement Policy”, prospective Indomaret franchisees who are included in the micro-enterprise category only need to take care of PBG. SLF is not required for supermarkets with micro and small business categories.
Manage the issuance of Franchise Approval Letter (STPW)
The definition of STPW is regulated in the Regulation of the Minister of Trade Number 71 of 2019 concerning the Implementation of Franchising (Permendag 71/2019), namely proof of registration of a franchise offer prospectus and proof of registration of a franchise agreement given after fulfilling the specified registration requirements.
So, it could be concluded that there are 2 important elements of STPW, which include:
- Registered franchise offer prospectus (for franchisors and advanced franchisors)
- Registered franchise agreement (for franchisees and continued franchisees)
As a prospective franchisee from Indomaret, the type of STPW that is required to be pocketed is STPW for: Franchise Recipients from Domestic Franchises. This document can be managed through the OSS System.
STPW Requirements for: Franchise Recipients from Domestic Franchise
Based on Permendag 71/2019 and the official website of the OSS System, the requirements that must be bursting with by domestic franchisees (including Indomaret), include:
- Franchise agreement, which at least fulfills the following clauses:
- The names and addresses of the parties
- Types of Intellectual Property Rights (IPR)
- Business activities
- Rights and obligations of the franchisor/continued franchisor and franchisee/continued franchisee
- Development
- Business area
- Period
- How to pay rewards
- Ownership, change of ownership, and rights of the beneficiary
- Dispute resolution
- Procedure for extending and terminating a franchise agreement
- Guarantee
- Number of outlets
- Franchise offer prospectus, which at least contains the following clauses:
- Advanced franchisor or franchisor identity data
- Franchise business legality
- History of business activities
- The organizational structure of the franchisor or advanced franchisor
- Financial statements for the last two years
- Number of places of business
- List of franchisees or advanced franchises
- The rights and obligations of the franchisor or continued franchisor and the franchisee or continued franchisee
- IPR of the franchisor, including IPR registration status
- IPR
- STPW technical data form for: Franchise from Domestic Franchise
Do you want your franchise business to be legal? Please consult us, Prolegal!
Author & Editor: Bidari Aufa Sinarizqi
Translator: Angelie Kartika Putri