The Legal Status and Validity of Franchise Agreements in Indonesia: An Analysis Based on Civil Law and Fiqh Muamalah (Islamic Commercial Jurisprudence)
DOI:
https://doi.org/10.67032/ljl.v5i2.210Keywords:
franchise agreement, civil law, innominate contract, fiqh muamalah, standard-form contractAbstract
Franchise agreements have evolved into a form of commercial cooperation that combines the use of intellectual property, business systems, operational standards, and ongoing support. This study examines the legal position and validity of franchise agreements in Indonesia from the perspectives of civil law and fiqh muamalah, with particular attention to standard-form contracts and the balance of the parties’ rights and obligations. It employs normative legal research using statutory and conceptual approaches. Primary legal materials include the Indonesian Civil Code, Law No. 8 of 1999 on Consumer Protection, and Government Regulation No. 35 of 2024 on Franchising, while secondary materials consist of legal scholarship and relevant journal articles. The analysis shows that a franchise agreement is an innominate contract whose validity is assessed under Articles 1320 and 1338 of the Civil Code and the specific requirements of franchise regulation. Government Regulation No. 35 of 2024 strengthens the regulatory framework by establishing franchise criteria, disclosure requirements for offering prospectuses, minimum contractual clauses, registration requirements, and continuing support obligations. From the perspective of fiqh muamalah, the agreement is not automatically classified as a single nominate contract; its legal characterization depends on the substance of the transaction, particularly the licensing of intellectual property, provision of services, and any genuine profit-sharing arrangement. The agreement is permissible insofar as its object and benefits are clear, consent is genuine, and it is free from riba, excessive gharar, fraud, and injustice. The study argues that legal validity should be assessed not only through formal consent but also through regulatory compliance, good faith, transparency, and proportionality in the allocation of risks and benefits
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