Economic development in Indonesia is one of the most important factors and has been the top priority of the Indonesian government. It is slowly but for certain that Indonesia’s economic condition will get better in time. Increasing the people’s quality of life and standards of living will be the main goal, and the only way to achieve such standard is through doing businesses by implementing entrepreneurial mindset to the people. A successful company requires a solid management team to deliver efficient yet excellent services to further enhance the economic development. Franchise has been one of the most popular choices of business in Indonesia due to its lower risks of failing, and thus has so far proven to be profitable. It is considered to be promising in terms of success rate, as the franchisor will share their key of success to the franchisee. More and more local franchises also sprung up to brighten the franchise business competition. This shows franchise interest by the businessmen in the development of their businesses. Admittedly, the growing popularity of franchise businesses in Indonesia potentially triggers business competition. So the author in his thesis will discuss and review the legal protection arrangements for franchise business actors as regulated in Government Regulation No. 42 of 2007 concerning franchise and implementation of legal protection for parties who are bound by franchise agreement in case of unfair business competition involving franchise businesses in Indonesia.