The concept of franchise has been known since 200 years BC and still developing. Franchise is a condition involving giving a special right on business with special characteristics which is owned by the franchisor to the franchisee. The development of this concept evolves very quickly in Indonesia. A lot of entrepreneur tries to introduce their business using this concept to the community. The reason behind this is that the cost they need to be able to expand their business is less compare to the other concept. In this thesis, we discuss about the rule of franchising system in Indonesian and the legal impact of Franchise Company’s bankruptcy towards franchisee. The Research on this problem will involve Qualitative analyzing with statutes approach and conceptual approach. Franchise concept in Indonesia has been rapidly developing, for this reason, a few regulations about Franchise have been made. For franchisor that happens to be bankrupt, the contract can still go on if the clause explains about the impact of the bankruptcy towards the other parties. However, if there is no clause about this matter, there is possibility for the franchisor to plea to the authorized curator or judge for the confirmation about the contract based on Law no. 37 Year 2004 Clause (36) subsection 1 and 2.