JURIDICAL REVIEW OF THE VALIDITY OF NON-COMPETITION CLAUSE IN FRANCHISE BUSINESS AGREEMENTS

Abstract

Based on Law Number 13 of 2003 concerning Employment, it provides equal rights and opportunities for workers to choose, get or change jobs and earn decent income both at home and abroad. However, in the franchise contract, there are several clauses, one of which is a non-competition clause, which means that to protect the franchisor's trade secrets, the franchisee is prohibited directly or indirectly from opening another business that is the same or similar to the franchise business. During and even up to several years after the termination of the agreement. Through a franchise agreement, the franchisor grants the franchisee the right as a business partner to run a business in the same field by using a trademark or trade name and other intellectual property rights by maintaining the quality standards and reputation of the franchisor in relation to the use of the brand of the goods and/or services agreed upon. Furthermore, this raises a question about whether or not this clause can be used as a basis for companies to claim achievements. However, in reality there were some workers who did not fulfill this clause on the grounds that they needed work to fulfill their needs. So the "clause" (cause) of the agreement is what the parties want to achieve with the agreement, namely the purpose of the agreement. It must be seen about the purpose of the company that includes a non-competition clause in the work agreement. As long as the purpose is reasonable and it can be proven that the interest must be protected, and does not limit rights excessively, the conditions for this permissible cause are fulfilled.