Malaysia legislation
Section 18
Section 18
(2)
A franchise agreement shall contain but is not limited to—
(a)
the name and description of the product and business under the franchise;
(b)
the territorial rights granted to the franchisee;
(c)
the franchise fee, promotion fee, royalty or any related type of payment which may be imposed on the franchisee, if any;
22 Laws of Malaysia ACT 590
(d)
the obligations of the franchisor;
(e)
the obligations of the franchisee;
(f)
the franchisee’s rights to use the mark or any other intellectual property, pending the registration or after the registration of the franchise;
(g)
the conditions under which the franchisee may assign the rights under the franchise;
(h)
a statement on the cooling off period as provided in subsection (4);
(i)
a description pertaining to the mark or any other intellectual property owned or related to the franchisor which is used in the franchise;
(j)
if the agreement is related to a master franchisee, the franchisor’s identity and the rights obtained by the master franchisee from the franchisor;
(k)
the type and particulars of assistance provided by the franchisor;
(l)
the term of the franchise, and the terms of renewal and extension of the franchise agreement; and
(m)
the effect of termination or expiration of the franchise agreement.
(3)
(Deleted by Act A1617).
(4)
A franchise agreement shall have a cooling off period, which shall be determined by both contracting parties but shall not be less than seven working days, during which the franchisee has the option to terminate the agreement.
(5)
Upon termination of the franchise agreement under subsection (4), an amount to cover the reasonable expenses
Franchise 23
incurred by the franchisor to prepare the agreement may be retained by the franchisor from the initial fees paid under section 19; however, all other moneys shall be refunded to the franchisee.
(6)
A person who fails to comply with this section commits an offence.
Payment of franchise fee, etc.