Franchise Leaders Jump into Jakarta

An IFA co-sponsored U.S. Franchise Trade Mission capped its tour of Vietnam and Indonesia in bustling Jakarta with a press conference to launch the entry of IFA member Johnny Rockets into one of the fastest-growing economies in the world. Over 45 news organizations including eight TV networks packed the presser and signing ceremony at the Shangri-La Hotel, where Johnny Rockets Senior Vice President Steve Devine joined U.S. and Indonesian officials in announcing the latest U.S. brand to enter Indonesia — with at least four stores planned.

 Franchisee Wiryanti Sukamdani, also President of the Indonesian Tourism Board, announced during the ceremony that her company will open the first Johnny Rockets on the popular tourist island of Bali next year.

 

 “You picked the perfect time to be here in this very vibrant and welcoming economy,” said U.S. Embassy Chargé d’Affaires Ted Osius, who invited the franchise delegation to a holiday-themed reception at his residence near Taman Menteng Park, where President Barack Obama played soccer during his childhood years living in the Indonesian capital. “This mission symbolizes the increasing cooperation between our two countries.” The U.S. and Indonesia recently signed a major new commercial agreement designed to enhance trade.

 

The jump into Jakarta was part of a 10-day Southeast Asia trade mission co-sponsored by IFA, the U.S. Commercial Service and Franchise Times, including 13 companies representing 19 U.S. franchise brands to meet and develop business with prospective partners in Vietnam and Indonesia.

“It was clear when we did our research that Indonesia was one of the hottest, largest markets in Southeast Asia,” said Dan Benton, Director of International Development of Global Franchise Group LLC, representing Great American Cookies, MaggieMoo’s, Marble Slab Creamery, Pretzelmaker and The Athlete’s Foot, among others. Benton, who took part in some of the U.S. Commercial Service’s 50+ matchmaking sessions for franchisors and prospective Indonesian business partners, said he expects to sign deals as a result of the visit.

Later, franchise leaders including Franchise Times editor Nancy Weingartner met with the Indonesian Chamber of Commerce and the Indonesian Young Entrepreneurs Association, along with U.S. Commercial Service Senior Officer David Cossack, where Indonesian franchise leaders encouraged the U.S. brands to find partners.

 

“International brands generate twice the revenue of domestic brands in our $11.6 billion franchising industry,” said Amir Karamoy, Chairman of the Indonesian Chamber’s franchising committee. “So we welcome you. The purpose of this visit is to find a soul mate.”

 Edwards Global Services founder and international franchise guru Bill Edwards added that while some U.S. brands first look closer to home when considering expansion, markets further away can be much more promising with their surging growth rates, demand for U.S. brands, and increasing disposable income.

“I think Canada is a difficult market,” Edwards said. “Mexico has its pluses and minuses with the challenges going on there.”

Meanwhile, major franchise developers in Indonesia are planning aggressive expansion, said Anthony Cottan of franchise development group PT. Mitra Adi Perkasa (MAP). Domino’s, partnered with MAP, has 29 stores in the capital Jakarta and plans to open 15 more this year. Dunkin’ Brands Baskin Robbins plans to reach 1000 units nationwide. Starbucks, a MAP licensor, has 112 in 10 cities and plans to open 30 more units this year alone.

 Challenges in this emerging franchise market include price sensitivity, import regulations, currency volatility and a shortage of high-level management talent. But Indonesia’s swelling disposable income, embrace of U.S. brands as healthy and high-quality, and growing young population make it an attractive opportunity, according to experts like Edwards.

“Indonesia has 240 million people, and they add 3-5 million each year,” said Cottan. “It’s like adding another Singapore every year.”

U.S. Commercial Service Officer Brent Omdahl, who led the trade mission, said the appetite for U.S. franchise brands in Southeast Asia is strong. “Now is the time to get in on the ground floor and seize franchising opportunities before the market gets crowded,” he said.

In addition to Johnny Rockets, the Vietnam-Indonesia trade mission included IFA members Applebee’s, Denny’s, The Melting Pot, Carvel Ice Cream, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s Pretzels, Seattle’s Best Coffee, Great American Cookies, MaggieMoo’s, Marble Slab Creamery, Pretzelmaker, Pollo Tropical, Rita’s Italian Ice, Round Table Pizza, Which Wich and Wing Zone, Crestcom and The Vitamin Shoppe.

Fred LeFranc, founder and CEO of trade mission participant and new IFA member Results Thru Strategy, said trade missions like this one are positive for U.S. brands as well as entrepreneurs across the globe. “America has always been a beacon for the world,” LeFranc said. “Franchising allows people to take part in the American Dream even if they can’t move to the U.S.” 

Posted by Beth Solomon, IFA Vice President of Strategic Initiatives & Industry Relations