The Republic of Indonesia, a country in Southeast Asia, faced serious economic problems in 1966, the total debt was (U.S.) $2.3 billion and exceeded export earnings. The government encourages the private sector to take part in this economic development since the government itself faced a scarcity of fund. The government has tried to attract private investment either domestic or foreign investor by launching the deregulation program. The purpose of this thesis is to make an argument that Indonesian franchises need protection and that it is time now for the legislative body in Indonesia to enact a franchise law. The study also intends to prove that the current laws of Indonesia do not provide the best protection to Indonesia franchisees. Moreover, this thesis studies the franchise laws in the United States as probably the only country which provides the most comprehensive franchise law. The issue is raised as to whether the current franchise laws can be used by Indonesian franchisees to cure the problems that they have in a franchise relationship between an Indonesia franchisee and an American franchisor.