INTRODUCTION

Franchising is an important business structure widely used both in Indonesia and worldwide. The rapid growth of new companies franchising their business offers a partnership model that has become a fundamental pulse that boosts the micro-economic performance of a country. In the United States, more than 770,000 franchises existed in 2014, employing 8.5 million Americans and creating USD 840 billion in output, equal to 3.5% of the total US GDP.[1] In 2012 - 2013, Indonesia had 2,020 franchise businesses with an average annual growth rate of 8% for domestic franchises and 14% percent for foreign franchises.[2]

A franchise is well known as a business model that is beneficial to startup business operators. A franchise relieves a start-up business about concerns on how to market their product, branding , finding and establishing proper business management systems, all of which present considerable challenges for every new businesses. Under a franchise agreement, a franchisee is entitled to use the well-known and distinct characteristics of a franchisor, such as trademarks, patents, designs, recipes, business or management systems, operational procedures, or other copyrighted materials. In addition, the franchisor provides continuous guidance and assistance to the franchisee in developing their business.