The development of the food franchise business in Indonesia is growing rapidly. Capitalizing on a widely recognized brand name, franchise partners hope to get big profits. Speaking of franchises, as quoted from food.detik.com (23/7/2023), Neynis Food is one of the salad and fruit soup producers claimed to have this partnership pattern. Now lately, Neynis Food has gone viral on social media. This is because its partners sent an open letter containing points of protest against the owner of Neynis Food. one of them is about the behavior of the owner of Neynis Food who denigrates his competitors (Salad Nyoo) on social media. How come? What is the chronology of the case? Is it true that Neynis Food has a partnership pattern with a franchise type? And what exactly is the procedure for owning a franchise business in Indonesia? Check out the full explanation below.
Chronology of the Neynis Food Case
Recently, social media has been stirred up by the debate over the sale of fruit salads. Where a fruit salad and soup brand called Neynis Food went viral after a review case conducted against its business rivals. The owner of Neynis was considered to be undermining Salad Nyoo when reviewing the salad made by his competitor. “I think Rp 39 thousand is not worth it, the contents are melon, watermelon, melon, watermelon, only 3 or 5 apples,” said the sisters who own Neynis Food, Nesya Anastasya and Dwi Annisa through a TikTok video uploaded on Tuesday (18/7/2023). Neynis Food itself is a business that is quite famous for its fruit salads, which is owned by kayaking sisters from Medan named Nesya Anastasya and Dwi Annisa. Now these two sisters have 180 franchises spread from Sumatra to Sulawesi. The snarky video under the guise of a fruit salad review went viral on TikTok, and was even stitched (comment with video). Although giving an assessment of the food eaten is the right of every consumer, netizens are already angry because the review style of the owner of Neynis Food is considered insulting. In fact, they are considered as if they want to bring down their competitor, a fruit salad called Salad Nyoo.
Impact on Neynis Food Partners
The aftermath of the Neynis Food case also affected sales to its franchise partners. Not only that, many of its partners have protested because the suppliers of the main ingredients are said to send rotten and unfit for consumption fruits. A Twitter account with the username @febrysimbolon0, on Saturday (07/22/2023), sent an open letter to Neynis Food. Where there are seven points that are held accountable to the owner of Neynis Food. In point number two, Neynis Food partners feel that there are several things that Neynis Food does not provide properly. Starting from the absence of training, detrimental partner termination provisions, poor quality raw materials, to inappropriate marketing assistance. “We as victims of partners feel very disappointed with all the actions you have taken against us. All your actions harm not only us, but consumers who buy your products,” wrote Febry Simbolon’s account as quoted by detik.com. In another tweet that is still a series of these threads, Febry also showed evidence of the rotten fruit he received. A mango sent from a supplier appointed by Neynis Food was seen giving rotten mangoes. Another tweet also showed a larger number of rotten fruits. This time there was a large bag of dragon fruit, almost all of which was rotten. You can see the texture of the fruit that has been watery and crushed so that it cannot be used by partners to mix their salads. Meanwhile, when they want to provide fruit from other suppliers, franchise owners will be threatened with termination of partners by Neynis Food. It is not only material losses that this partner named Ferdy Simbolon is worried about. But food safety is feared to poison consumers who consume it. Until now, many partners are still trying to contact Neynis Food to get accountability but some have been blocked through their social media.
Definition of Franchise
Franchise regulations in Indonesia are regulated in Regulation of the Minister of Trade Number 71 of 2019 concerning Franchising (Permendag 71/2019). Franchise or franchise is a special right owned by an individual or business entity to a business system with business characteristics in the context of marketing goods and/or services that have proven successful and can be utilized by other parties based on a Franchise Agreement (Article 1 point 1 Permendag 71/2019).
Franchise Criteria
A business can be said to have a franchise pattern if it meets the following criteria, including (Article 2 Permendag 71/2019):
- Have business characteristics;
- It has proven to be profitable;
- Have standards for services and goods and/or services offered that are made in writing;
- Easy to teach and apply;
- Continued support; and
- Registered Intellectual Property Rights (IPR).
It should be further noted that the meaning of “proven to be profitable” is if the franchisor has at least 5 years of experience. In addition, the business has business words to overcome business problems, which in this case is evidenced by the survival and development of the franchisor’s business profitably. Business tips can be in the form of operational guidance (training) and management.
Franchise Legality
There are several legal documents that must be taken care of in developing a business into a franchise, one of which is the Franchise Registration Certificate (STPW). STPW is proof of registration of the prospectus (written and detailed description of the company’s activities) of the offer and franchise agreement provided after fulfilling the specified requirements. In this case, STPW can be processed through the Online Single Submission (OSS) system, which applies as a Business License to Support Business Activities (PB UMKU). In addition, there are also other franchise business needs that are no less important, namely the franchise agreement contract. The franchise agreement is a written agreement between the profit giver (franchisor) and the recipient or buyer of profit (franchisee). This agreement contract becomes strong evidence and can be the basis for doing things that have been agreed upon. Franchise agreements made between parties who have equal legal standing and against them apply Indonesian law. Furthermore, the franchise manager is obliged to register the franchise agreement (Article 6 Permendag 71/2019). However, previously the franchisor is obliged to submit a franchise offering prospectus to the franchisee no later than 2 weeks before the signing of the business agreement.
Conclusion: Neynis Food is Not a Franchise Business
Actually, if you look at the franchise criteria in the first subheading, it can be said that the Neynis Food partnership is not a franchise. Why is that? Because Neynis Food has not been established for 5 years. In addition, the partners claimed that the owner of Neynis Food did not provide management and operational training. In addition, based on information from PDKI Indonesia data, there is no name “neynis”, “neynis food”, or “neynisfood” at all. This means that the Neynis Food brand is not a registered brand, so it does not have a brand certificate for its business. It can be said that the business owner has not registered the trademark at all.
READ ALSO: Let’s Understand and Take Care of Legal Documents for Franchise Business!
In fact, one of the criteria for a franchise is that the franchisor must have registered Intellectual Property Rights (for example, a brand).
KH Contact
This is an explanation of the Neynis Food case and its business partnership. Yes, although it seems simple and easy to run, there are several strategies and conditions that must be met for this franchise business. Evidently, as happened to Neynis Food, due to the non-fulfillment of legality documents such as brand registration, IPR, agreements, and provision of training, the business pattern cannot now be considered a franchise and has led to a number of disputes from its partners who feel aggrieved. Then, what about your business franchise partnership? Has it met the required conditions? Or are you still confused and don’t have time to take care of the legality? Take it easy, KH pals can contact Kontrak Hukum. As a digital legal platform, we can help you to fulfill business legality such as business entity formation, business license processing, to brand and IPR registration. To view service information, please visit the KH Services – Starting a Business page. Not only that, we also provide franchise agreement contract drafting services including STPW. Let’s run the franchise business safely and smoothly by making a contract agreement at KH Services – Franchise Agreement. If you have any other questions, just consult us at Ask KH or via direct message (DM) to Instagram @kontrakhukum.
