I have noticed many businesses, online or not, uses the word franchise whether to market their business or product. The good thing about the franchise concept is that every business is franchisable. So long as their is a business plan and a business concept or in short a business system. Systems are created through time and error. That makes franchise a formidable and independent business method especially so in difficult time such as the Pandemic.

Everybody seems to know (even with little knowledge), believe that franchising is an art of marketing or a tool in growing one’s business. However many do not know that a franchise business must be registered with the Ministry of Domestic Trade and Consumer Affair under the Franchise Registrar. If the said business is not registered with the Registrar it is not a franchise business under the Franchise Act.

It is note worthy to note Section 37A Franchise Act 1998 provides an offence for any person who assumes or uses the word “franchise” in any way whether directly or indirectly. So please don’t use the word franchise simply.

Simply means, If you are not a franchise, you are merely a license business and there will be no protection under the Franchise laws. For the purposes of clarity and information, below is section 37A

37A. A person who assumes or uses in relation to its business, the term “franchise” or any of its derivatives or any other words indicating the carrying on of a franchise business, including the use of the word “franchise” or any abbreviation thereof as part of the name or title in documents, agreements, books, advertisements or publications, without approval of registration by the Registrar under section 8 commits an offence and shall, on conviction, be liable—

(a) if such person is a body corporate, to a fine not exceeding two hundred and fifty thousand ringgit, and for a second or subsequent offence, to a fine not exceeding five hundred thousand ringgit; or

(b) if such person is not a body corporate, to a fine not exceeding one hundred thousand ringgit or to imprisonment for a term not exceeding one year or to both, and for a second or subsequent offence, to a fine not exceeding two hundred and fifty thousand ringgit or to imprisonment for a term not exceeding three years or to both.

Notice that section 37A create an offence which may amount to imprisonment.