The Franchise Act 1998
With the introduction of the Franchise Act, franchises operating in Malaysia would need to review and restructure their franchise arrangements substantially. It affects both locally developed franchises and imported or foreign franchises operating in Malaysia (whether on a Master Franchise, sub-franchise or license basis). Punishing penalties are imposed if franchises do not comply with the Act, which is scheduled to be gazetted soon (according to recent press releases), including the declaration of null and void of any franchise agreement.
The Act has 61 sections with serious implications to all in franchising (franchisors, master franchisors and even franchisees). The Act not only requires you to amend your franchise agreement but implies necessary use of strategic development, restructuring of your management policies and procedures, creation of documentation and other concerns.
- a director, manager or secretary or a company can be held liable for any offence under the Act -
- a second offence can be punishable by a jail term -
Find out more about the Franchise Act by visiting our FAQ (Frequently Asked Questions).
To make sure you are within the law and to protect your interest, we have a program to review your system and documentation then, advise you accordingly. Franchise Compliance Review
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