Overview

Prompted by business concerns over the red tape encountered when trying to obtain a franchise licence in Indonesia (Surat Tanda Pendaftaran Waralaba, STPW) -- the Ministry of Trade recently issued Regulation 25 of 2025 regarding Procedures for the Issuance of Franchise Licences by Regional Governments (New Regulation). The New Regulation’s main goal is to significantly cut the red tape required to obtain a franchise licence.

Effective from 30 July 2025, the New Regulation brings about some key changes to make licensing faster, more efficient and clearer – in an effort to make franchising in Indonesia easier.

Among its key measures, the regulation sets out clear steps for regional governments to issue franchise licences and imposes a strict five-business day deadline for licence issuance. If this deadline is missed, the applicant business can download a temporary franchise licence through the Ministry of Investment’s online single submission (OSS) system.

Regional government authority

A regional government’s authority to issue a franchise licence for domestic franchisees, as well as domestic and foreign sub-franchisees, was already recognised under Government Regulation 35 of 2024 on Franchising (GR 35/2024). However, the New Regulation provides further clarity by identifying the parties responsible for issuing franchise licences as follows:

Procedures for franchise licence issuance by regional governments

The New Regulation explains how regional governments will handle franchise licence applications through a two-step verification process.

First, the regional government must check whether all the required application documents are complete and accurate, including the application form, which must provide details about both the franchisor and the franchisee, as well as key information about the franchise business itself.³

After the documents are deemed complete, the application proceeds to the approval stage. At this stage, the regional government double-checks all the submitted documents to make sure everything meets the requirements.

If no issues are identified, the franchise licence must be upon completion of the verification process. The entire process of verification and franchise licence issuance should take no more than five business days in total. If this deadline passes without the licence being issued, businesses can use proof of their application as a temporary licence until the official one is granted.

Important note for existing applicants

Franchisees who had not yet received a franchise licence and whose applications were still under examination before the New Regulation came into effect on 30 July 2025 must download proof of their application from the OSS system, which will serve as a temporary business licence to operate the franchise.⁴ However, they must resubmit their franchise licence application in accordance with the procedures and document requirements outlined in the New Regulation.

This client update should be read in conjunction with our last franchising client update on GR 35/2024, available here. We will continue to monitor the implementation of the New Regulation and provide further updates as significant developments arise.