(1)
A franchise agreement shall be in writing.
franchise agreement
“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;
A franchise agreement shall contain but is not limited to—
the name and description of the product and business under the franchise;
the territorial rights granted to the franchisee;
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
the obligations of the franchisor;
the obligations of the franchisee;
the franchisee’s rights to use the mark or any other intellectual property, pending the registration or after the registration of the franchise;
the conditions under which the franchisee may assign the rights under the franchise;
a statement on the cooling off period as provided in subsection (4);
a description pertaining to the mark or any other intellectual property owned or related to the franchisor which is used in the franchise;
if the agreement is related to a master franchisee, the franchisor’s identity and the rights obtained by the master franchisee from the franchisor;
the type and particulars of assistance provided by the franchisor;
the term of the franchise, and the terms of renewal and extension of the franchise agreement; and
the effect of termination or expiration of the franchise agreement.
(Deleted by Act A1617).
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.
franchisee
“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;
Upon termination of the franchise agreement under subsection (4), an amount to cover the reasonable expenses
Franchise 23
franchise
“franchise” means a contract or an agreement, either expressed or implied, whether oral or written, between two or more persons by which— Franchise 9 (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). (e) in return for the grant of rights, the franchisee may be required to pay a fee or other form of consideration. (f).
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.
franchisor
“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;
A person who fails to comply with this section commits an offence.
person
“person” includes a natural person, corporation, partnership, association, firm, joint venture or trust;