Overview

Table 1: Top 5 Foodservice (by value) in 2023-2024, Unit: USD Millions
 

Source: Euromonitor International and company website
 

Table 2: Growth of Local and Foreign Franchises in Indonesia, 2023-2024

Source: Indonesia’s Ministry of Trade and Indonesian Franchise Association

Indonesia’s Franchising Sector 

Indonesia presents robust long-term potential for U.S. franchise businesses. Since the entry of well-known American brands in the early 1990s, franchising has become an increasingly popular model, particularly in the food and beverage (F&B) sector. This growth has been supported by rising disposable incomes, a large urban population, and evolving consumer preferences—especially among younger Indonesians seeking convenience, variety, and social experiences outside the home.

U.S. franchises are especially well-known in Indonesia for their quality, innovation, and brand recognition. Leading American brands such as McDonald’s, KFC, Pizza Hut, Starbucks, Domino’s, Dunkin’, and Subway have built strong footholds in the market. Subway, for example, re-entered the Indonesian market in late 2021 and has since grown to 100 outlets.

The consumer foodservice sector in Indonesia is expected to experience steady growth from 2024 to 2029. The number of outlets is forecast to increase from 231,514 units in 2024 to 254,751 units by 2029, representing a CAGR of 1.9%. Similarly, the number of transactions is projected to rise from 5.34 billion in 2024 to 6.39 billion in 2029 growing at a CAGR of 3.7%.

Leading Sub-sectors

As of early Feb 2025, 311 franchise providers held valid franchise registration certificates (STPW) in Indonesia. Among local franchises, 48.34% operated in the F&B sector, followed by beauty & health, non-formal education services, and retail. Among foreign franchise brands, the sectoral breakdown was similar. In addition to F&B, other growth areas include fitness, laundry, after-school enrichment, vocational training, and wellness services. New U.S. entrants should be aware of the increasing investor interest in well-known and proven concepts, especially those with a track record of regional or global success.

Opportunities

U.S. franchise brands remain highly attractive to Indonesian investors, particularly in urban centers with large middle-class populations. The growing demand for Western dining concepts, premium beverages, and casual lifestyle brands aligns well with U.S. offerings.  Local cultural business dynamics change with the influence of world events.  We encourage U.S. franchise sector stakeholders to contact CS Indonesia for the latest. 

While recent rupiah depreciation has made some investors cautious about launching new foreign concepts, there remains interest in securing master franchise rights. Local adaptation—including halal compliance, pricing strategy, and marketing tailored to Indonesian consumers—is key to success.

Franchisors should consider attending major franchise trade events such the annual International Franchise, License & Business Concept Expo and Conference and Franchise License Expo Indonesia both of which are usually held in Jakarta, Indonesia.
 

Regulatory Environment

On September 2, 2024, the Indonesian government enacted Government Regulation (GR) No. 35 of 2024 on Franchising (GR 35/2024), replacing the earlier Government Regulation No. 42 of 2007 (GR 42 /2007). This new regulation aims to enhance the regulatory framework for franchises in Indonesia as well as promote a more dynamic and compliant franchise industry aligned with global standards. It streamlined processes by eliminating previously required five-year STPW renewal requirement, simplifying long-term franchise maintenance for U.S. franchisors in Indonesia.

Resources

• Euromonitor: https://euromonitor.com
• Ministry of Trade Republic of Indonesia: https://www.kemendag.go.id
• Asosiasi Franchise Indonesia (AFI): https:// https://www.franchiseindonesia.or.id/
• Perhimpunan Waralaba & License Indonesia (WALI): https://perhimpunanwali.com (under construction) / IG: @perhimpunanwali  
   

 Interested parties may contact Commercial Specialist Fidhiza Purisma at Fidhiza.Purisma@trade.gov.