growing your franchise in Malaysia
Do you know that you can commercializing Your Potentials by ways of Franchising or licensing concepts.
The use of Licensing and franchising as a marketing and brand extension tool has burgeoned over the last 30 years. When well-executed, a strong Licensing relationship brings benefits to all parties of the deal – be it the property owners and their agents; licensees and their affiliates; and retailers and ultimately, consumers. Every of these parties have its own goals and aims which add value to the final product or service.
That is why it is no surprise that Franchising is a favourite ultimatum and more popular way for business owners to expand their businesses. It has been used by many successful businesses as a powerful tool to leverage their businesses and to penetrate the market with lesser capital investment and effort.
As times passes, more foreign franchise brands are also penetrating at those potential countries outside their own home country as a gateway to market their franchise and eyeing to expand into Asia especially country like Malaysia that is actively encouraging the concept of Franchising. Some famous international Franchises include McDonald’s, KFC and Pizza Hut while Marrybrown, Secret Recipe, Smart Reader and Global Art are the examples of the top 10 Malaysian Franchises.
However, It is also very interesting trends to note that in the past where consumers only aware of and ponder to search for those big franchise brands especially originated from overseas such as the USA who used to dominate franchise business but today you may probably see the trends whereby local brands from all corners are gradually developing their own franchise business and venturing into new international markets.
This is due to the fact that the most attractive part for Licensing and franchising is the ability to generate several revenue streams for the licensor such as the collection of royalties, licensing or franchising fees and etc.
How to register a franchise in Malaysia
No registration is required for Licensing. However, under Malaysian Franchise Act 1998, there is a legal requirement that all franchises operating in Malaysia (either local or foreign), have to be registered with the Franchise Registry. Incompliance is an offence.
This include those foreign franchisor who wishes to sell their franchise in to Malaysia or to a Malaysian Citizen must first get approval from the Ministry of Franchise . master franchisee of foreign franchisors must register the franchise before they can operate the franchise businee or make an offer to sell the franchse to any party. Incompliance of this requirement is tantamount to an offence and can be punish with a fine from MYR150,000 to RM250,000 and/or imprisonment for a term between 1 to 3 years depending the it is corporate body or non-body corporates. Therefore, it is very important to those foreign franchisor to take note this legal requirement before offering their franchise to Malaysian market.
To register a franchise with the Franchise Registry., a company should have at least meeting the below requirement and having ready with said documents:-
i) run the business for more than 3 years;
ii) Register as SDN.BHD company at Suruhanjaya Syarikat Malaysia (SSM);
iii) Forms 24 and 49 (Company’s return as to the Board of Directors and the Shareholders)
iv) Having a completed operation manual and training manual;
v) Having a proposed Franchise Agreement’
vi) A Disclosure Document ;
vii) Company’s organizational chart, together with the names and position of key personnel;
viii) Company’s business brochures
How to evaluate the feasibility of your franchise opportunity
FRANCHISING a business is one of the proven course for rapid growth. With the right framework, franchising can be a successful expansion strategy without requiring as much up-front capital.
However, becoming a successful new franchisor requires detailed consideration of the laws that heavily regulate the franchise industry. In this regards, it is necessary for a franchisor or owner of business whom has intention to expand their business into franchising to undergo a franchise readiness training to understand an introduction to the regulatory regime of the franchise industry in Malaysia before embarking this expansion journey. The topic of training are basically covering 10 Golden Pillars of Franchising :-
- Unique Selling Proposition
- Business Concept
- Franchise System
- Finance & Account
- Management Team
- Support Infrastructure
- Relationship Management
The Objectives of the training would allow the business owner to learn the Essentials of Franchising & Licensing and Understand & Applying Franchising / Licensing Business Startup using the 10 Golden Pillars To Strengthen Business Infrastructure and not overlooking the vital rules of the Franchise Act 1998 & Franchise (Amendment) Act 2012. Intellect is an IP consulting firm that has been in the IP industry for the past 20 years, further enhancing our credibility by being one of the 10 Franchise consultant appointed by PNS, a qualified Franchise consultant in the workshop .
Talk to us if you need further consultation to evaluate your franchise potentiality and opportunity .
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