Franchise Registration Introduction

Franchise arrangements in Malaysia are governed by the Franchise Act 1998. This act applies to the sale of franchises throughout Malaysia. Compliance with the Act and thus the need to register also covers companies previously registered under the Prime Minister’s Department or KPDNKK.

The sale of a franchise is deemed to be in Malaysia where:

  • Is made in Malaysia and accepted within or outside Malaysia
  • Is made outside Malaysia and accepted within Malaysia
  • The franchised business is or will be operating in Malaysia
  • Under the Franchise Act 1998, there are four (4) categories of registration as follows:
Types of Franchises Definition
Section 6

  • Franchisor
A person who grants a franchise to a franchisee and includes a master franchisee and his relationship with a sub-franchisee
Section 6A

  • Master franchisee
A person who has been granted the rights by a franchisor to sub franchise to another person, at his own expense, the franchise of the franchisor
Section 6B

  • Franchisee of Foreign Franchisor
A person who has been granted the rights by a foreign franchisor but does not sub franchise to another person
Section 14

  • Franchise Broker
A person doing business as an agent or representative of a franchisor to sell a franchise to any person for a certain consideration but does not include any director, officer or employee of the franchisor or franchisee

 

Application for Registration of Franchises

By virtue of Section 6 of the Franchise Act 1998, a franchisor or master franchisee is required to make an application to register his franchise with the Registrar of Franchises, Ministry Of Domestic Trade, Co-Operatives and Consumerism (KPDNKK), by submitting an application to the Registrar, together with the following documents and information:-

  • Completed disclosure document with all the necessary particulars filled in. the format of the disclosure document is as prescribed in Form BAF1
  • Completed Form BAF 2 (Applicant’s profile)
  • Proven and complete operation manual (Bahasa Kebangsaan /English)
  • Training manual (Bahasa Kebangsaan /English)
  • Certified true copy of Registered trade mark or intellectual property mark documents with Intellectual Property Corporation of Malaysia (MyIPO)
    *if trademark/intellectual property mark has been assigned to applicant, a certified true copy of the relevant legal instrument/document must be submitted
  • Certified true copy of certificate of incorporation (Form 9 or 13, 24, 44 and 49)
  • Latest audited accounts (3 years) together with financial statements, balance sheet and profit and loss accounts
  • 5 year franchise financial projection
  • Prototype outlet/s photographs
  • Brochures/pamphlets/company annual report and
  • Other additional information or document as may be required by the Registrar for the purpose of evaluating the application

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