In forceAmendedUpdated to 1 Nov 2023Read it in Bahasa Malaysia

Contents

Act of Parliament · Updated to 1 Nov 2023 · 8 parts

Franchise Act 1998

Feedback & supportRegistering and regulating franchises

Long title

An Act to provide for the registration of, and to regulate, franchises, and for incidental matters.

In force · Updated to 1 Nov 2023

Part I

Preliminary

Official textFrom Laws of Malaysia Online, unchanged

s 1Short title

This Act may be cited as the Franchise Act 1998.

s 2Commencement

This Act comes into operation on a date to be appointed by the

Minister by notification in the Gazette.

s 3Application

(1)

This Act applies throughout Malaysia to the sale and operation of any franchise in Malaysia.

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(2)

The sale and operation of a franchise is deemed to be in

Malaysia where—

(a)

an offer to sell or buy a franchise—

(i)

is made in Malaysia and accepted within or outside Malaysia; or

(ii)

is made outside Malaysia and accepted within or outside Malaysia; and

(b)

the franchised business is operated or will be operating in

Malaysia.

(3)

Nothing in this Act shall affect the provisions of any other written laws, but if there is any conflict between the provisions of this

Act and the provisions of the other written laws, the provisions of this

Act shall prevail.

s 4Interpretation

In this Act, unless the context otherwise requires—

“advertisement” means any publication, circular, notice, or any oral or written communication, whether broadcasted by electronic or any other publishing media, or any form of electronic communications to the public for the purpose of offering the sale of a franchise or promoting the sale of a franchise;

“authorized officer” means an officer authorized in writing by the

Minister under section 42 to exercise the powers of enforcement under this Act;

“disclosure documents” means such disclosure documents as may be prescribed by the Minister;

“franchise” means a contract or an agreement, either expressed or implied, whether oral or written, between two or more persons by which—

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(a)

the franchisor grants to the franchisee the right to operate a business according to the franchise system as determined by the franchisor during a term to be determined by the franchisor;

(b)

the franchisor grants to the franchisee the right to use a mark, or a trade secret, or any confidential information or intellectual property, owned by the franchisor or relating to the franchisor, and includes a situation where the franchisor, who is the registered user of, or is licensed by another person to use, any intellectual property, grants such right that he possesses to permit the franchisee to use the intellectual property;

(c)

the franchisor possesses the right to administer continuous control during the franchise term over the franchisee’s business operations in accordance with the franchise system; and

(d)

(Deleted by Act A1442).

(e)

in return for the grant of rights, the franchisee may be required to pay a fee or other form of consideration.

(f)

(Deleted by Act A1442).

“franchise agreement” means a contract or an agreement made between a franchisor and a franchisee in respect of a franchise in return for any form of consideration but does not include any contract or agreement made for the purpose of direct selling as provided by the

Direct Sales Act 1993 [Act 500];

“franchise broker” means a person doing business as an agent or representative of a franchisor to sell a franchise to any person for a certain consideration but does not include any director, officer or employee of the franchisor or franchisee;

“franchise consultant” means a person who provides advice and consultancy services to another person on the registration of a franchise business and compliance of the related laws;

10 Laws of Malaysia ACT 590

“franchisee” means a person to whom a franchise is granted and includes, unless stated otherwise in this Act—

(a)

a master franchisee with regard to his relationship with a franchisor; and

(b)

a subfranchisee with regard to his relationship with a master franchisee;

“franchisor” means a person who grants a franchise to a franchisee and includes a master franchisee with regard to his relationship with a subfranchisee, unless stated otherwise in this Act;

“mark” includes a trade mark, service mark, symbol, design, brand, heading, label, ticket, name, signature, word and letter or any combination of them;

“master franchisee” means a person who has been granted rights by a franchisor to subfranchise to another person, at his own expense, the franchise of the franchisor;

“Minister” means the Minister for the time being charged with the responsibility for matters relating to franchises;

“person” includes a natural person, corporation, partnership, association, firm, joint venture or trust;

“prescribed” means prescribed by regulations made under this Act;

“Registrar”, “Deputy Registrar” and “Assistant Registrar” mean respectively the Registrar of Franchises, a Deputy Registrar of Franchises and an Assistant Registrar of Franchises appointed under section 5;

“regulations” means regulations made under this Act;

“subfranchise” means a franchise granted by a master franchisee to a subfranchisee for business purposes under this Act;

“subfranchisee” means a subfranchise holder;

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“this Act” includes any regulations made under this Act.

Part II

Read on from Part II

Part III

Read on from Part III

Part IV

Conduct of Parties and Termination of Franchise Agreement

Read on from Part IV

Part V

Franchise Advisory Board

Read on from Part V

Part VI

Offences and Penalties

Read on from Part VI

Part VII

Enforcement

Read on from Part VII

Part VIII

Miscellaneous

Read on from Part VIII