I had the opportunity to speak in a “Would be Franchisor” seminar for business owners organised by the Malaysian Franchise Association, platform for franchise activities in Malaysia.

Interestingly, I received many questions pertaining to franchise registration. With that section 6, 6A, 6B, 7 and 54 Franchise Act 1998 (as amended) comes to mind.

Section 6 provides for the registration of franchisor, section 6A for a franchisee of a foreign franchise and section 6B for all franchisees. Foreign franchise, section 54.

Section 7 provides for the application process which states specifically the documents the applicants must prepare such as a sample of the franchise agreement, disclosure documents, operation manual, staff manual, latest audited financial reports and any other documents the Registrar so request.

Interestingly, the Act or any franchise regulations to-date (as in the time of writing 30.5.2022), nothing mention a requirement of 3 years for an applicant to be a franchisor.

Thus, this bring us to the question of can an applicant register less than 3 years as the Act is silence.

I would proposed to complete the filings. Should there be a rejection by the Registrar, to appeal before the Minister under section 17 or to move in under section 54 as a foreign franchise, as there is no requirement for a foreign franchise.

Situation arises when the applicant shifted from an enterprise into a private limited company. The enterprise may have started over the years and from there it grew and had many licenses. Until when the enterprise is confident, they extent the enterprise into a private limited company and thus apply for registration under section 6.

Ideally, there is always a need to strengthen the franchise system thus the registrar’s requirement of a minimum of 3 years is in the right direction. Nevertheless, nothing in the Act mentioned so.