Ni Ketut Supasti Dharmawan, Made Sukma Prinjandhini Salain, Benjamin Halliwell

Full Text: PDF

DOI: http://dx.doi.org/10.15742/ilrev.v8n2.491


The existence of traditionally managed Balinese city hotels is increasingly threatened by the presence of chain hotels, which are internationally managed with an excellent standard of hotel hospitality. In a commercial context, franchised hotels benefit the franchisor, franchisee, and consumers in terms of the quality of hotel standardization and reputation. Still, such hotels remain incomparable to the Balinese city hotels managed traditionally by family owners. In the legal context, the emergence of various types of modern franchised city hotels in Bali is influenced by suitable laws and policies, such as the World Trade Organization (WTO) Agreement with one of its ground bases called the “Non-Discrimination Principle” at the international level and at the regional level, the Association of Southeast Asian Nations Economic Community, which also emphasizes that one of the important central pillars of the multilateral trading system is a region fully integrated into the global economy. The emergence of modern chain city hotels has prevented the local city hotels from competing in terms of both the infrastructure and quality management services. To overcome these crucial issues, the model provisions of the local government regulation and self- regulation framework of hotel associations must be constructed to strengthen the local city hotels as chain hotels by implementing traditional values, e. g. , the Tri Hita Karana, the corporate social responsibility as a strategic development, and human rights approaches, that comply with the WTO Agreement and the laws and policies at the regional level.


franchised city hotel; local city hotel; non discrimination system; model provisions of local government regulation; self-regulation framework



Legal documents

Marrakesh Agreement establishing the World Trade Organization, Marrakesh, 15 April 1994, UNTS vol. 1867.

United Nations, Declaration on the Rights of Indigenous Peoples, Res 61/295, 13 September 2007.

United Nations, Human Rights Council, Resolution 17/4 of 16 June 2011 on the Guiding Principles on Business and Human Rights

Indonesia, Ministry of Trade. RegulationNo. 07/M-DAG/PER/2/2013 on the Development of Partnership in Franchising for Food and Drink Service-Typed of Business.

–––. Regulation No. 53/M-DAG/8/2012 on the Implementation of Franchising

Indonesia. Government Regulation No. 42 of 2007 on Franchising

–––. Government Regulation No. 44 of 1997on the Partnership

–––. The Law No. 10 of 2009 concerning Tourism

–––. The Law No. 20 of 2008 concerning Small and Medium Enterprises

–––. The Law No. 25 of 2007 concerning Capital Investment

–––. the Law No. 5 of 1999 towards Agreement that is related with Franchising


McBarnet, Doreen, Aurora Voiculescu and Tom Campbell, eds. The New Corporate Accountability: Corporate Social Responsibility and the Law. Cambridge: Cambridge University Press, 2009.

Peters, Jan Hendrik and WisnuWardana. Tri Hita Karana the Spirit of Bali (Jakarta: Kepustakaan Popular Gramedia, 2013.

Sumarsono, Dicky. DahsyatnyaBisnis Hotel di Indonesia Smart Strategy, High Revenue [The Great Hotel Business in Indonesia Smart Strategy, High Revenue], Jakarta: PT GramediaPustaka Utama, 2014.

V. B. , Andri. JurusSukses Franchise 100% PastiUntung [Successful Tips for Franchise 100% Definitely Profit]. Jakarta: PT GramediaWidiasarana Indonesia, 2013.

van den Bossche, Peter. The Law and Policy of the World Trade Organization: Text, Cases and Materials. Cambridge: Cambridge University Press, 2008.

van den Heuvel, Grat, and Ni KetutSupastiDharmawan. “Corporate Responsibility and Crime Control in Tourism. ” In Michael Gerbert Faure, Ni KetutSupastiDharmawan and I Made Budi Arsika, eds. Sustainable Tourism and Law. The Hague: Eleven International Publishing, 2014.

Wallace, Bill. Becoming Part of the Solution: The Engineer’s Guide to Sustainable Development. Washingtong D. C. : American Council Engineering Companies, 2005.

WIPO. Franchising Guide. Geneva: WIPO, 1994.


Bali Provincial Tourism Office, (2013):3. See also The Central Bureau of statistics of Bali Province (2014)

Nwosu, Belinda. “A review of the hotel industry in Nigeria: size, structure and issues. ” Worldwide Hospitality and Tourism Themes 8, no. 2 (2016): 177-133.

Lam, Carmen, Grace K. S. Ho, and Rob Law. “How can Asian hotel companies remain internationally competitive?’ International Journal of Contemporary Hospitality Management 27, No. 5 (2015): 827-852.

Sashi, C. M. & Devi Prasad Karuppur. “Franchising in Global Markets: Towards a Conceptual Framework. ” International Marketing Review19(2002): 499-524.

Burke, Debra & E. Malcolm Abel II. “Franchising fraud: The continuing need for reform. ”American Business Law Journal40, no. 2 (winter 2003): 355-384.

Arikan, E. , D. Kantur, C. Maden, E. E. Telci. “Investigating the mediating role of Corporate reputation on the relationship between corporate social responsibility and multiple stakeholder outcomes. ” Qual Quant (2016): 129-149.

Ferry Salanto, “Bali Hotel Market Report”, Colliers International Research & Forecast Report, Q3 2015.

Alon, Ilan, Liqiang Ni, Youncheng Wang, “Examining the Determinants of Hotel Chain Expansion Through International Franchising. ”International Journal of Hospitality Management31, no. 2(2012): 379-386.

Jiménez-Burillo, S. , J. J. Jiménez-Moreno. “The Role of the Top Management Team in the Choice of Entry Modes – Theoretical Perspective. ”, Entrepreneurial Business and Economics Review1, no. 2 (2013): 51-58.

Berbel-Pineda. Juan M. and Jose M. Ramirez-Hurtado. “Issues about the Internationalization Strategy of Hotel Industry by Mean of Franchising. ” International Journal of Business and Social Science 3, no. 6 (March, 2012): 284-290.

Singh, Karpal, Dara Singh and Md. Aminul Islam. “Validating an Instrument for Measuring brand equity of CSR driven organizations in Malaysia. ” Management & Marketing Challenges for the Knowledge Society 12, no. 2 (2017): 237-251.

Marković, J. JelicaPetrović D. Marko, “Presence of the Largest Hotel Franchise Companies on the European Market”, Researches Reviews of the Department of Geography, Tourism and Hotel Management 42 (2013): 165-177.

Liu, Matthew Tingchi, et. al. “The Impact of Corporate Social Responsibility (CSR) Performance and Perceived Brand Quality on Customer-based Brand Preference. ” Journal of Service Marketing 28, no. 3 (2014): 181-194.

Michael, S. “Can franchising be an economic development strategy? An empirical investigation. ” Small Business Economics 42, no. 3 (2014): 611-620.

Ni KetutSupastiDharmawan, “Protecting Traditional Balinese Weaving Through Copyrights Law: Is it Appropriate?”Diponegoro Law Review 2, no. 1 (2017): 57-84.

Ni KetutSupastiDharmawan, et. al. “Implementing the Traditional Community Values for the Development of Franchised City Hotel. ” Paper presented at the International Seminar on Traditional Community in a Global World Facing ASEAN Economic Community 2015, Faculty of Law Udayana University – ASEAN Secretariat – Charles Darwin University School of Law, Denpasar, Bali Indonesia, 25 September 2014.

Aissa, Sami Ben and Mohamed Goaied. “Determinants of tourism hotel market efficiency. ” International Journal of Culture, Tourism and Hospitality Research 10, no. 2 (2016): 173-190.

Baresa, Suzana, Zoran Ivanovic, and Sinisa Bogdan. “Franchise Business as a Generator of Development in Central Europe. ” UTMS Journal of Economics 8, no. 3 (2017): 281-293.

Heung, Vincent C. S. , Hanqin Zhang, Chen Jiang, “International Franchising: Opportunities for China’s State-Owned Hotels?”International Journal of Hospitality Management 27 (2008): 368-380.

Zulhamri, A. and Y. A. Aziz, “Institutionalizing corporate social responsibility effects on corporate reputation, culture, and legitimacy in Malaysia”, Social Responsibility Journal 9, no. 3 (2013): 344-361.


Dalem, Anak Agung GdeRaka. “Achievements and Challenges of Implmenetation of ‘Tri HitaKirana’ for Creating Sustainable Tourism in Bali-Indonesia: A Case Study in Hotel Sectors. ” Ritsumeikan University. Accessed on 22 September 2014. http://www. ritsumei. ac. jp/acd/re/k-rsc/hss/book/pdf/vol03_02. pdf.

International Organization for Standardization. “ISO 26000 – Social Responsibility. ” ISO. Accessed on 22 September 2014. https://www. iso. org/iso-26000-social-responsibility. html.

Abell, Mark. “The Regulation of International Franchising. ” Accessed on 19 August 2014. http://whoswholegal. com/news/features/article/28705/the-regulation-international-franchising 2010)

ASEAN Secretariat. “A Blueprint for Growth ASEAN Economic Community 2015: Progress and Key Achievements. ” Accessed 9 August 2016. http://www. asean. org/storage/images/2015/November/aec-page/AEC-2015-Progress-and-Key-Achievements. pdf.

World Trade Organization. ”Understanding the WTO: Settling Disputes A Unique Contribution. ” Accessed on 27 August 2016. https://www. wto. org/english/thewto_e/whatis_e/tif_e/disp1_e. htm.

–––. “Understanding The WTO: The AgreementsOverview: a navigational guide. ” Accessed 9 August 2016. https://www. wto. org/english/thewto_e/whatis_e/tif_e/agrm1_e. htm.

ISSN: 2356-2129