Section 31
Termination of franchise agreement
No franchisor or franchisee shall terminate a franchise agreement before the expiration date except for good cause as provided in subsections (2) and (3).
28 Laws of Malaysia ACT 590
(2)
“Good cause” shall include, but is not limited to—
(a)
the failure of a franchisor or a franchisee to comply with any terms of the franchise agreement or any other relevant agreement entered into between the franchisor and franchisee; and
(b)
the failure of a franchisor or the franchisee to remedy the breach committed by him or any of his employees within the period stated in a written notice given by the franchisor, which shall not be less than fourteen days, for the breach to be remedied.
(3)
“Good cause” shall include, but without the requirement of notice and an opportunity to remedy the breach, circumstances in which the franchisor or franchisee—
(a)
makes an assignment of the franchise rights for the benefit of creditors or a similar disposition of the assets of the franchise to any other person;
(aa)
becomes bankrupt or insolvent;
(b)
voluntarily abandons the franchised business;
(c)
is convicted of a criminal offence which substantially impairs the goodwill associated with the franchisor’s mark or other intellectual property; or
(d)
repeatedly fails to comply with the terms of the franchise agreement.