A COMPARATIVE ANALYSIS OF PROFIT-SHARING SYSTEMS IN FRANCHISE AGREEMENTS UNDER THE CIVIL CODE AND ISLAMIC LAW

Abstract

This study examines the profit-sharing system in franchise business agreements through a comparative analysis between the Indonesian Civil Code (KUH Perdata) and Islamic law. As the franchising sector expands in Indonesia, the equitable regulation of profit-sharing arrangements between franchisors and franchisees assumes greater significance. This study endeavors to examine the legal structure that governs profit-sharing systems, the application of the principle of freedom of contract, and the legal obstacles encountered in their practical application. The research utilizes a normative juridical methodology, incorporating a comparative approach through the analysis of statutory regulations, legal doctrines, and pertinent DSN-MUI fatwas related to franchising and profit-sharing agreements. The principal findings are as follows: (1) profit-sharing systems within franchise agreements, as governed by the Civil Code (KUH Perdata), are fundamentally reliant on the validity criteria for contracts, as outlined in Article 1320 in conjunction with Article 1338; while the principle of freedom of contract affords considerable autonomy, it does not adequately safeguard substantive justice; (2) Islamic law prioritizes justice, transparency, and the avoidance of uncertainty (gharar) in profit-sharing arrangements; musyarakah is considered more suitable than mudharabah for contemporary franchise models, given the franchisee's capital investment; (3) considerable legal challenges persist, including the lack of specific profit-sharing regulations within franchise law, the potential for information asymmetry, and an unresolved legal gap concerning the enforcement of DSN-MUI fatwas in the context of dispute resolution.