Franchise Agreements and Licensing in Malaysia
Franchise and licensing arrangements allow businesses to expand through third parties in a structured and legally defined way.
Scope of Assistance
- Franchise agreement drafting and review
- Franchise disclosure document preparation and review
- Registration of franchise arrangements under the Franchise Act 1998
- Intellectual property licensing agreements
- Trade mark licensing and royalty arrangements
- Technology and software licensing
- Sub-franchise and master franchise arrangements
- Termination, renewal, and post-termination obligations
Franchise Act 1998 Requirements
The Franchise Act 1998 requires franchisors to register their franchise with the Registrar of Franchises before the franchise can lawfully be offered or sold in Malaysia.
The Act also prescribes minimum disclosure requirements and regulates the content of franchise agreements. Non-compliance carries criminal and civil consequences.
Key Components
A well-structured franchise agreement should address the grant of the franchise and its territorial scope, the franchisor's system and brand standards, fees and royalties, training and support obligations, intellectual property ownership and permitted use, reporting and audit rights, termination and renewal conditions, and post-termination restrictions.
Licensing Arrangements
Where a full franchise structure is not required, licensing of intellectual property, technology, or know-how may be appropriate.
Licensing agreements must clearly define the scope of the licence, exclusivity, permitted use, sublicensing rights, royalty terms, quality controls, and conditions for termination.
Back
Commercial Contracts Home
Next
Non-Disclosure & Confidentiality
Next